BP profits halve in 2023 but beat expectations as it announces £2.8bn buyback
BP has announced that its annual profits for 2023 were halved due to lower oil prices, but the last three months of the year saw a better performance than expected.
The oil giant reported profits of £11 billion, a 50% drop from the record £22.1 billion in 2022 when oil prices soared after Russia's invasion of Ukraine. Despite the fall in crude oil prices, BP reported a smaller-than-expected drop in profits in the final quarter of the year, with earnings of £2.4 billion compared to £3.8 billion the previous year.
Analysts had predicted profits of £2.19 billion for the fourth quarter. Following two years of high profits, BP, like its rival Shell, announced further good news for shareholders with another £2.8 billion of share buybacks for the first half of the year.
The company plans to buy back at least £11.1 billion over 2024-25. It also increased its dividend by 10% to 7.27 cents a share in the fourth quarter BP's boss Murray Auchincloss said: "Looking back, 2023 was a year of strong operational performance with real momentum in delivery right across the business."
He added: "And as we look ahead, our destination remains unchanged... focused on growing the value of BP." But Global Witness slammed BP for what it called "reckless shareholder payouts".
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They said that the money BP gave to its shareholders in 2023 £10.2 billion could pay for the UK's natural disasters for the next seven years. Jonathan Noronha-Gant from Global Witness stated: "Shareholders should want to protect their long-term positions."
He added: "That means demanding a rapid clean energy transition for companies like BP. These reckless shareholder payouts do the opposite." The Institute for Public Policy Research (IPPR) also slammed BP for giving too much money to its shareholders.
Joseph Evans from the IPPR remarked: "BP has decided to prioritise its shareholders over investing in the green transition. It's clear that BP and other fossil-fuel giants can't be trusted to drive the green transition: they will always prioritise their shareholders over the needs of the economy and the planet."
BP explained that its latest results were partly due to good gas trading but not so good oil trading and refining margins. This is the first time we're hearing from Mr Auchincloss as the new chief of BP since he started last month.
The former chief financial officer of BP, who had been filling in since September, has now officially taken over from Bernard Looney. Looney left the company after it was revealed he hadn't fully disclosed past relationships with colleagues.
* An AI tool was used to add an extra layer to the editing process for this story. You can report any errors to [email protected]
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