Energy giant BP posted record revenue for 2022 after a sharp increase in gas prices
British Petroleum reported better-than-expected fourth quarter financial results, with net profit at $10.8 billion compared with $2.3 billion in the same period of 2021.
Moreover, underlying replacement cost of profit (a proxy for net profit) for the whole year was $27.7 billion, more than double compared to 2021, but the fourth quarter came at $4.8 billion, compared with $8.2 billion for the previous quarter.
However, the company ended with a net loss for the full year, ($2.5) billion compared with a profit of $7.6 billion in the same period of 2021.
Compared to the third quarter, the result was impacted by a below average gas marketing and trading result after the exceptional result in the third quarter, lower oil and gas realizations, a higher level of refinery turnaround and maintenance activity, and lower marketing margins and seasonally lower volumes.
Operating cash flow for the fourth quarter and full year 2022 was $13.6 billion and $40.9 billion respectively, compared with $6.1 billion and $23.6 billion for the same periods in 2021 primarily as an outcome of higher underlying profits and working capital movements.
Capital expenditure in the fourth quarter and full year 2022 was $7.4 billion and $16.3 billion respectively, compared with $3.6 billion and $12.8 billion in the same periods of 2021, higher as a result of acquisitions completed during the fourth quarter 2022.
During the fourth quarter, BP completed share buybacks of $3.2 billion. The $2.5 billion share buyback programme announced with the third quarter results was completed on 3 February 2023.
In the fourth quarter, BP generated surplus cash flow of $5.1 billion and intends to execute a $2.75 billion share buyback from surplus cash flow prior to announcing its first-quarter-2023 results. Net debt fell for the eleventh successive quarter to reach $21.4 billion at the end of the fourth quarter.
For the fourth quarter, bp has announced a dividend per ordinary share of 6.610 cents an increase of around 10%.
„During 2022 bp delivered four quarters of robust underlying financial performance. We have raised our dividend by 21% since 4Q 2021, reduced net debt by $9.2 billion, invested with discipline and announced $11.25 billion of share buybacks. As we look to 2023, we remain
focused on the disciplined delivery of our financial frame, with its five priorities, underpinned by a $40/bbl balance point, unchanged,” said Murray Auchincloss, BP CFO.
Outlook and guidance
• In the first quarter, bp expects oil prices to remain supported by recovering Chinese demand, ongoing uncertainty around the level of Russian exports and low inventory levels.
• bp expects the outlook for global gas prices during the first quarter to remain dependent on weather in the Northern Hemisphere and the pace of Chinese demand recovery.
• bp expects industry refining margins to remain elevated in the first quarter due to sanctioning of Russian crude and product.
• Looking ahead, the company expects first-quarter 2023 reported upstream production to be broadly flat compared to fourth quarter 2022.
• Seasonally lower volumes and in Castrol base oil prices to remain high, although lower than the fourth quarter 2022. In refining, margins will remain elevated and a lower level of turnaround activity