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BP turns in a quarterly profit despite drop in oil trading results

By Alexander Bueso

Date: Tuesday 27 Oct 2020

BP turns in a quarterly profit despite drop in oil trading results

(Sharecast News) - BP managed to turn in a profit of $0.1bn on a replacement cost basis, despite a "significantly" lower result in its oil trading arm, following the prior quarter's $6.7bn loss.

The oil major credited the absence of big write-offs together with a recovery in oil and gas prices, and demand, for the improvement in its bottom line, although it posted a significantly lower oil trading result

On a reported basis, the oil major posted -$0.5bn of red ink for the quarter, which nevertheless compared favourably with the $16.8bn in losses that it turned in during the preceding quarter.

Proceeds from asset sales rose to $0.6bn during the quarter with management adding that it had already completed or agreed disposals worth close to half its $25bn target for over 2025.

The company also made further progress on its goal of achieving $2.5bn in annual cash cost savings by end-2021 versus 2019 levels.

Organic capital expenditures year-to-date were running at $9.1bn, in-line with its full-year target for about $12bn.

Operating cashflows meanwhile proved resilient, coming in at $5.3bn when payments linked to the Gulf of Mexico oil spill are excluded.

On a post-tax basis, those payments amounted to approximately $100m.

Net debt at quarter end stood at $40.4bn, which was down $0.5bn on the prior quarter and was expected to further reduce in the final three months of 2020 as the firm received the proceeds from its divestments.

A dividend of 5.25 cents was declared for the quarter just finished.

Michael Hewson, chief market analyst at CMC Markets UK, hailed the company's ability to turn in a quarterly profit, but said that BP's ability to dodge the first back-to-back quarterly losses in over a decade "can't disguise the challenges facing the industry".

-- More to follow --


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