BP reported its first annual loss in a decade after a 96 per cent drop in fourth-quarter revenue because the UK oil main continues to reel from the hit to power demand from the pandemic.
Underlying revenue on a substitute price foundation — the measure of earnings tracked most carefully by trade analysts — was $115m within the three months to December 31.
This fell in need of analyst expectations of a $370m revenue, in line with a company-compiled estimate, and compares with $2.6bn in the identical interval the yr earlier than.
Bernard Looney, chief govt, stated it had been “a troublesome quarter on the finish of a troublesome yr”.
It has been a brutal time for the trade, with lockdowns and journey bans inflicting huge drops in earnings.
For the complete yr, BP slumped to a lack of $5.7bn, from a $10bn revenue in 2019, due to the collapse in power costs, a writedown within the worth of oil and fuel belongings by billions of {dollars} and depressed demand.
The group stated quarterly efficiency had been “considerably” hit by decrease gas gross sales and refining margins. It additionally blamed weaker fuel advertising and buying and selling outcomes, and better exploration write-offs.
“The climate was colder in Asia than we had thought and hotter in America than we had thought,” Mr Looney stated in an interview. “Our merchants have been caught.”
BP, which returned to profit in the third quarter, had already warned of a unstable outlook.
Oil demand is anticipated to rebound in 2021 and it expects to profit from larger fuel costs in future. However gas gross sales and refinery margins are forecast to stay below stress.
The worth of crude oil has recovered from final April’s lows — under $20 a barrel — helped by a nascent market restoration and the rollout of vaccinations. Though Brent crude is once more above $55 a barrel, it’s removed from the $70 degree of a yr in the past.
“I believe there are points about mutations and points about vaccine rollout . . . however, on the similar time, we’ve got vaccines so there can be a restoration,” stated Mr Looney. “How lengthy it’ll take, time will inform.”
The latest oil rebound has helped BP’s share worth, which final yr fell to multi-decade lows. However the shares fell greater than 3 per cent after the outcomes have been revealed on Tuesday.
The pandemic is accelerating a metamorphosis of the group below Mr Looney, who took up his function in February 2020 and promised to show BP right into a net-zero emissions firm by 2050.
BP is shrinking manufacturing within the coming decade, promoting belongings and reshaping its enterprise for a lower-carbon future, which incorporates restructuring the corporate and reducing 10,000 jobs.
It cut its dividend in August for the primary time because the Deepwater Horizon catastrophe in 2010, to five.25 cents, which it has since maintained together with within the newest quarter.
It has additionally slashed capital spending by billions of {dollars}, lower prices dramatically, secured new credit score traces, issued bonds and stalled exploration exercise. It expects capital expenditure to be $13bn in 2021.
It additionally desires to promote $25bn in belongings by 2025 to chop debt and pay for inexperienced power funding.
The corporate stated internet debt — which stood at $39bn within the fourth quarter — would improve within the first half of 2021, however it nonetheless aimed to achieve its $35bn goal as early as the tip of this yr.
BP introduced this week the sale of a 20 per cent stake in an Omani fuel block for $2.6bn.
