BP Q4 Results: Lower Revenue, Rising Debt, CEO Pledges Fundamental Strategy Shift And More

BP PLC BP shares are trading lower after the company reported fourth-quarter results.

Sales and other operating revenues came in at $45.752 billion, missing the consensus of $47.511 billion.

Hydrocarbon production was 850 mboe/d (-5.4% Y/Y), with underlying production declining 2.7% Y/Y mainly due to base decline in Egypt.

The Renewables pipeline stood at 60.6GW (bp net), including a 38.7GW bp net share from Lightsource bp’s (LSbp’s) pipeline in the quarter.

Adjusted EBITDA declined to $8.41 billion from $10.57 billion a year ago. Underlying RC profit per American Depositary Share (ADS) came in at $0.44, missing the consensus of $0.47.

Operating cash flow was $7.43 billion, compared to $9.38 billion in the prior-year quarter.

Capital expenditure was $3.73 billion versus $4.71 billion a year ago. Net debt rose to $23.0 billion from $20.9 billion a year ago.

Chief executive officer Murray Auchincloss said, “We have been reshaping our portfolio – sanctioning new major projects, and focusing our low-carbon investment – and we have made strong progress in reducing costs. Building on the actions taken in the last 12 months, we now plan to fundamentally reset our strategy and drive further improvements in performance, all in service of growing cash flow and returns.”

Kate Thomson, Chief Financial Officer, stated, “During the year, we introduced our target to deliver at least $2 billion of savings(a) by the end of 2026 relative to 2023 and are making strong progress, achieving $0.8 billion of structural cost reduction. We raised the dividend per ordinary share by 10% and delivered $7 billion of share buybacks.”

Dividend: BP disclosed an interim dividend of 8.000 cents per ordinary share, payable on March 28, 2025. Holders of ADSs are expected to receive $0.48 per ADS.

Repurchase: The company completed previously announced $1.75 billion in share buybacks during the quarter.

Furthermore, BP plans to conduct a $1.75 billion share buyback before its first-quarter earnings release.

Elliott Management, a U.S.-based activist hedge fund managing approximately $70 billion in assets, reportedly acquired a stake in BP. The fund advocates for substantial changes at the British oil company to boost its performance.

First-Quarter FY25 Outlook: BP anticipates upstream production to be lower than the fourth quarter of 2024.

In its customer business, BP projects seasonally lower volumes sequentially, with fuel margins likely remaining sensitive to supply cost fluctuations.

In the products segment, BP expects refining margins to stay low in the first quarter and expects a lower level of refinery turnaround activity compared to the fourth quarter of 2024.

FY25 Guidance: BP expects reported upstream production to be lower and underlying upstream production to be slightly lower than the prior year.

It anticipates divestments and other proceeds to be around $3 billion for the year, with weighted towards the second half.

BP anticipates approximately $3 billion in divestment and other proceeds in 2025, primarily in the second half.

With $22 billion realized since the second quarter of 2020, the company remains on track to achieve its $25 billion target for the 2020-2025 period.

The company sees Gulf of America settlement payments for the year to be about $1.2 billion pre-tax, including $1.1 billion pre-tax to be paid during the second quarter.

Yesterday, BP inked a contract with Oil and Natural Gas Corporation Limited (ONGC), as per which bp will serve as the Technical Services Provider (TSP) for the Mumbai High field, India’s largest and most prolific offshore oil field.

Investors can gain exposure to the stock via Texas Capital Texas Oil Index ETF OILT and Abacus FCF Real Assets Leaders ETF ABLD.

Price Action: BP shares are trading lower by 0.67% at $34.19 premarket at the last check Tuesday.

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