BG Group's (BG.) half-year figures revealed a decline in second-quarter earnings, along with increased cost pressures. But it's unfolding events in Egypt that remain "a primary concern" for chief executive Chris Finlayson.
That's hardly surprising - Egypt accounts for around a fifth of group production and BG is still owed $1.3bn (£850m) by the state-controlled EGPC following the coup d'état there. Moreover, higher than agreed gas volumes from BG were diverted into the heavily subsidised Egyptian domestic market during the second quarter - reducing available volumes for higher-value liquefied natural gas (LNG) exports.
Egypt aside, BG struggled with a 3 per cent upstream volume decline, while realised prices for oil fell 6 per cent to $102 a barrel. BG coped better in gas markets, where unit realisations improved. Nevertheless, half-year operating profit there fell 7 per cent to $2.68bn - partially offset by a 2 per cent profit rise to $1.26bn at the LNG shipping and marketing business. Overall, group operating profits (adjusted for impairments) reached $3.66bn, compared with last year's $3.9bn. BG also confirmed that its capital-intensive growth projects - QCLNF in Australia and Santos Basin in Brazil - remain on track, with first gas from QCLNF anticipated next year.
Broker Investec Securities expects adjusted full-year EPS of 120.7¢ (128.7¢ in 2012).
| BG GROUP (BG.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,206p | MARKET VALUE: | £41bn | |
| TOUCH: | 1,205-1,208p | 12-MONTH HIGH: | 1,357p | LOW: 991p |
| DIVIDEND YIELD: | 1.5% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 974¢ | NET DEBT: | 34% | |
| Half-year to 30 Jun | Turnover ($bn) | Pre-tax profit ($bn) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2012* | 9.69 | 2.65 | 33.9 | 7.64 |
| 2013 | 9.44 | 3.55 | 60.0 | 8.51 |
| % change | -3 | +34 | +77 | +11 |
Ex-div: 7 Aug Payment: 6 Sep £1=$1.53 *Restated | ||||
