Although weakened oil prices played havoc with half-year comparables, BG Group (BG.) beat City expectations for second-quarter profits and raised its full-year production forecast to the upper range of guidance. The latter point will not have been lost on Shell's board as it navigates the regulatory hurdles of the BG bid.
Underlying operating profits of $1.57bn (£1.01bn) were down 60 per cent on the 2014 half-year, reflecting the slump in crude prices. There was also a commensurate fall-away in cash flows during the period. Oil prices averaged $60 a barrel during the second quarter, up from the preceding three months but well adrift of the $110 level a year earlier.
Crude prices are obviously beyond BG's control; production numbers make for better reading. BG's forecast output range for 2015 is 650,000-690,000 barrels of oil equivalent a day (boepd). The group produced 703,000 boepd in the second quarter - up a fifth from a year earlier. Volume growth in the second quarter was driven by BG's natural gas assets in Australia and its deepwater fields in Brazil's Santos Basin. Output was also buoyed by the continued ramp-up at Knarr in Norway and a higher net entitlement from assets in Kazakhstan, although BG's LNG business in Egypt is still a cause for concern.
Deutsche Bank predicts adjusted full-year EPS of 53¢, against 121¢ in 2014.
| BG GROUP (BG.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,090p | MARKET VALUE: | £37.2bn | |
| TOUCH: | 1,090p-1,091p | 12-MONTH HIGH: | 1,300p | LOW: 781p |
| DIVIDEND YIELD: | 1.7% | PE RATIO: | NA | |
| NET ASSET VALUE: | 905¢ | NET DEBT: | 28% | |
| Half-year to 30 June | Turnover ($bn) | Pre-tax profit ($bn) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2014 | 10.56 | 4.02 | 72.5 | 14.38 |
| 2015 | 7.85 | 3.67 | 72.0 | 14.38* |
| % change | -26 | -9 | -1 | - |
Ex-div: 13 Aug Payment: 11 Sep £1=$1.56. *To be paid to UK shareholders at 9.22p a share | ||||
