The release of BP's full-year figures was always likely to be overshadowed by the impending legal wranglings arising from 2010's Gulf of Mexico oil well spill - a court hearing on that begins later this month. But, with the 2010's painful $40.9bn (£25.9bn) oil spill response cost now in the past, the group has returned to a thoroughly healthy level of profitability - and is starting to rebuild dividends.
The fourth-quarter payout was raised by 14 per cent hike - the first rise since Macondo - and BP effectively signalled that restoring the payout is a priority. The company certainly looks able to support an improved return. Chief executive Bob Dudley anticipates that this year's operating cashflow will be around 50 per cent higher than last year's $22bn - assuming the oil price averages around $100 a barrel.
BP's profits were also well supported by strong oil and gas prices through 2011 - which compensated for the reduction in output that came about through Macondo-related disruptions to the group's deepwater drilling programme and the enforced sale of otherwise productive assets. Though fourth-quarter production did actually increase, total annual output fell 10 per cent year-on-year to 3,454 barrels of oil equivalent per day - but average oil & gas realisations bubbled up by 38 per cent and 18 per cent respectively.
Moreover, a solid trading backdrop helped boost BP's fourth-quarter replacement cost profit by two-thirds to $7.6bn and the full-year figure reached $23.9bn - compared to a $4.91bn loss during 2010. BP's downstream refining and marketing division was responsible for around a quarter of group profits and, contrary to industry trends, those operations reported high levels of utilisation during the final quarter.
Prior to these results broker Charles Stanley was forecasting pre-tax profit for 2012 of $34bn, giving EPS of 113¢.
| BP (BP.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 483p | MARKET VALUE: | £92bn | |
| TOUCH: | 482-483p | 12-MONTH HIGH: | 504p | LOW: 361p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 6 | |
| NET ASSET VALUE: | 587¢* | NET DEBT: | 26% | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($bn) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 289 | 21.2 | 109 | 22.55 |
| 2008 | 367 | 21.7 | 113 | 32.39 |
| 2009 | 246 | 16.8 | 88.5 | 35.28 |
| 2010 | 309 | -4.83 | -19.8 | 4.35 |
| 2011 | 386 | 38.8 | 136 | 18.13 |
| % change | +25 | - | - | +317 |
Ex-div:15 Feb Payment:30 Mar *Includes intangible assets of $33.2m, or 175¢ a share £1=$1.58 | ||||
