BP (LON: BP) has reported a significant drop in profits, reaching a four-year low in the fourth quarter. The company announced an underlying replacement cost profit of $1.17 billion for this period. This marks a decrease from the $2.27 billion profit achieved in the preceding third quarter.
This current profit figure is the lowest since the fourth quarter of 2020. Over the year, BP reported an annual underlying replacement cost profit of $8.92 billion, showing a substantial decline from $13.84 billion reported in 2023.
Despite the fall in profits, BP has declared a share buyback of $1.75 billion and an ordinary share dividend of $0.08. CEO Murray Auchincloss has announced plans to reset BP's strategy to enhance performance and increase cash flow.
On the financial side, BP's operating cash flow in the fourth quarter rose to $7.43 billion, an increase from $6.76 billion in the third quarter. However, for the entire year, the operating cash flow was $27.3 billion, decreasing from $32.04 billion in 2023.
Investment firm Elliott Investment Management has reportedly taken a stake in BP, indicating potential shifts in the company's management conversations and strategies.
Looking ahead, BP anticipates that refining margins will remain low and broadly stable throughout 2024. Additionally, similar struggles in the industry are illustrated by Shell's reported fall in fourth-quarter profits, with a 39% decrease in adjusted earnings from the previous quarter. Shell's annual adjusted earnings were also down, amounting to $23.7 billion, which is a 16% reduction from the $28.3 billion reported in 2023.
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