BP share price rallies as group’s profits beat expectations

Angola write-off weighs on results

BP share price rallies as group’s profits beat expectations

Shares in BP (LON:BP) have jumped in London this morning, as the company’s second-quarter profits surpassed analyst expectations. The group’s performance, however, was weighed down by a hefty writedown in Angola, as well as payments related to the Gulf of Mexico oil spill in 2010, which pressured the company’s net debt.

As of 08:39 BST, BP’s share price had added 2.88 percent to 458.53p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.48 percent higher at 7,407.60 points. The group’s shares have added just under 10 percent to their value over the past year, but have given up some 10 percent in the year-to-date.

BP announced in a statement this morning that its underlying replacement cost profit had come in at $684 million in the second quarter of the year, down from the prior-year period’s $720 million, and from the $1.5 billion posted in the first quarter of the current year. The group’s performance was weighed down by a $753 million exploration write-off, predominantly in Angola. Reuters, however, noted in its coverage of the news that the result had topped the $500 million forecast in a company-provided analyst consensus.

“We continue to position BP for the new oil price environment, with a continued tight focus on costs, efficiency and discipline in capital spending,” the group’s chief executive Bob Dudley commented in the statement. BP’s chief financial officer Brian Gilvary meanwhile commented that while the company’s net debt had climbed primarily due to Gulf of Mexico payments, the oil major was expecting this to “improve over the second half as these payments decline and divestment proceeds come in towards the end of the year”.

BP left its dividend unchanged at 10 cents per share today. 

As of 09:09 BST, Tuesday, 01 August, BP plc share price is 462.15p.

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