BP have followed in Shell’s footsteps in releasing bumper 2022 full year results buoyed by higher oil prices during the period subsequent to the Russian invasion of Ukraine.
BP’s Underlying Replacement Cost Profit for 2022 more than doubled to $27.6bn, up from $12.8bn in 2021. Surplus cash flow rocketed to $19bn and provided plenty excess cash to increase the dividend and expand the buyback programme.
A total loss attributable to shareholders of $2.5bn was recorded in 2022 due to a $24bn charge related to the writing down of their Russian Rosneft asset.
However, this will be an irrelevance at this point with the focus almost entirely on bumper cash regeneration and returns to shareholders.
BP announced a $2.75bn buyback programme which was welcomed by investors with BP shares gaining 3.5% to 493p at the time of writing on Tuesday.
The fourth quarter dividend was increased to 6.61 cent from 6 cent in the third quarter.
“With so much cash being generated, BP has followed Shell in hiking its dividend, with the final payment for Q4 rising by another 10% to leave it 21% above the equivalent payment last year. If that sounds like a big jump, remember that the company slashed its payout back in the pandemic and the new level is still 40% below where it stood in Q4 2019,” said Steve Clayton, Fund Manager at HL Select.
The strong level of cash generation helped BP reduce Net Debt to $21bn from $30bn last year.
Energy Transition Investment
Speaking in an interview with Bloomberg TV, CEO Bernard Looney alluded to increased investment in their current infrastructure to service to energy needs of today, while increasing investment in the energy transition by $8bn this decade.
BP aims to increase their network of EV charging points by 65% over the next two years, when compared to 2021. In addition, investment in green hydrogen projects is gathering pace after the signing of MoUs in Mauritania and Egypt.
