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Highlights

  • BP reported a decent recovery in RC profit in Q3FY24, rising to USD 1,112 million
  • The company expects lower upstream production, with gas realisations benefiting by USD 0.1 - 0.2 billion
  • Weak oil trading and refining margins impact the company’s Q4FY24 outlook, along with foreign exchange losses

BP PLC (LSE:BP.) is a global oil and gas company with a diverse energy business spanning across North and South America, Europe, Africa, Asia, and Australasia.

In the third quarter of financial year 2024 (Q3FY24), the company reported a significant recovery in RC profit, rising to USD 1,112 million from a loss of USD 16 million in Q2FY24. It was driven by higher refining margins and solid oil trading performance.

In contrast, Q2FY24 had weaker margins and lower trading results. Adjusted EBITDA for Q3FY24 was USD 9,654 million, a slight increase of 0.2% compared to USD 9,639 million in Q2FY24, primarily due to higher gas realizations, improved customer business performance, better retail fuel margins, Castrol growth, lower exploration write-offs, and cost efficiencies.

Recent Business Update

In its Q4FY24 trading statement released on14 January 2025, BP PLC outlined several key updates.

  • The company expects lower upstream production, with gas realisations providing a positive impact of USD 0.1 - 0.2 billion, while oil realisations are anticipated to face a USD 0.2 - 0.4 billion hit due to price lags in the Gulf of Mexico and UAE.
  • In the Customers & Products segment, results will be affected by seasonal lower volumes, weaker refining margins (USD 0.1 - 0.3 billion), foreign exchange losses, and a one-time inventory price adjustment.
  • BP anticipates a reduction in net debt, supported by USD 2.8 billion in divestments, USD 2.5 billion in hybrid bond issuance, and USD 3.0 billion in acquired debt from BP Bunge Bioenergia and Lightsource BP.

Company Outlook

BP has revised its FY24 guidance. It is now expecting the underlying effective tax rate to be approximately 42%, up from the previous estimate of 40%, driven by changes in its geographical profit mix. Additionally, the estimated underlying annual charge for other businesses and corporate has risen to USD 0.6 billion, from the earlier range of USD 0.3 - 0.4 billion, due to foreign exchange losses.

Top 10 Shareholders

The top 10 shareholders of BP together account for around 21.18% of the company’s total shares. The largest shareholder is The Vanguard Group, Inc., owning approximately 4.85% of the shares, closely followed by Norges Bank Investment Management (NBIM), which holds about 3.86% of the total shareholding.

Price Performance

Over the past three months, the stock has risen by approximately 9.63%, but it has seen a decline of around 1.97% over the last six months. Its 52-week range is from a low of GBX 365.20 to a high of GBX 542.40, with the current trading price below the average of this range. As of 04 February 2025, the stock closed at GBX 422.20.

 Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference data for all price data, currency, technical indicators, support, and resistance levels is 04 February 2025. The reference data in this report has been partly sourced from EODHD/Others.