BP PLC
DGAP-News: BP p.l.c. / Key word(s): Quarter Results
BP p.l.c. Group results - First quarter 2021
2021-04-27 / 10:15
The issuer is solely responsible for the content of this announcement.
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London 27 April 2021
BP p.l.c. Group results
First quarter 2021 "For a printer friendly version of this announcement please click on the link below to open a PDF version of the announcement" http://www.rns-pdf.londonstockexchange.com/rns/6508W_1-2021-4-26.pdf
Performing while transforming
Financial summary First Fourth First
quarter quarter quarter
USD million 2021 2020 2020
Profit (loss) for the period attributable to bp shareholders 4,667 1,358 (4,365)
Inventory holding (gains) losses*, net of tax (1,342) (533) 3,737
Replacement cost (RC) profit (loss)* 3,325 825 (628)
Net (favourable) adverse impact of adjusting items*[(a)], net of tax (695) (710) 1,419
Underlying RC profit* 2,630 115 791
Operating cash flow* 6,109 2,269 952
Capital expenditure* (3,798) (3,491) (3,861)
Divestment and other proceeds[(b)] 4,839 4,173 681
Net issue (repurchase) of shares - - (776)
Net debt*[(c)] 33,313 38,941 51,404
Announced dividend per ordinary share (cents per share) 5.25 5.25 10.50
Underlying RC profit per ordinary share* (cents) 12.95 0.57 3.92
Underlying RC profit per ADS (dollars) 0.78 0.03 0.24
* Strong earnings * Net debt target reached * USD500 million share buybacks * Disciplined strategic
and cash flow around a year early in the second quarter progress across the business
This quarter demonstrates what we mean by performing while transforming.
With the acceleration of divestment proceeds, together with strong business performance and the recovery in the price
environment, we generated strong cash flow and delivered on our net debt target around a year early. We are commencing
share buybacks in the second quarter which, alongside our resilient dividend, support the growth in distributions to
shareholders.
And at the same time, we've delivered disciplined strategic progress right across bp - including building a
high-quality offshore wind business, making great strides in our electrification agenda and setting ourselves up for
further growth in the Gulf of Mexico.
Bernard Looney
Chief executive officer
. (a) Prior to 2021 adjusting items were reported under two different headings - non-operating items and fair value accounting effects*. See page 28 for more information. . (b) Divestment proceeds are disposal proceeds as per the condensed group cash flow statement. Other proceeds were
USD675 million from the sale of a 49% interest in a controlled affiliate holding certain refined product and crude
logistics assets onshore US in the first quarter 2021 and USD170 million in relation to the sale of an interest in
bp's New Zealand retail property portfolio in the fourth quarter 2020. There are no other proceeds in the first
quarter 2020. . (c) See Note 8 for more information. RC profit (loss), underlying RC profit (loss) and net debt are non-GAAP measures. Inventory holding (gains) losses and adjusting items are non-GAAP adjustments. * For items marked with an asterisk throughout this document, definitions are provided in the Glossary on page 33. Top of page 2
Highlights
Strong results and cash flow delivery
* Reported profit for the quarter was USD4.7 billion, compared with USD1.4 billion profit for the fourth
quarter 2020.
* Underlying replacement cost profit* was USD2.6 billion, compared with USD0.1 billion for the previous
quarter. This result was driven by an exceptional gas marketing and trading performance, significantly
higher oil prices and higher refining margins.
. Operating cash flow* of USD6.1 billion was underpinned by strong business performance, with a working
capital* build (after adjusting for inventory holding gains) of USD1.2 billion including USD0.5 billion
of severance payments. This build was largely offset by other timing differences.
. Divestment and other proceeds were USD4.8 billion in the quarter, including USD2.4 billion from the
divestment of a 20% stake in Oman Block 61 and USD1.0 billion final instalment for the sale of the
petrochemicals business.
Net debt target achieved, USD500 million share buybacks in the second quarter
. Net debt* reduced by USD5.6 billion to reach USD33.3 billion at the end of the quarter. Having reached
USD35 billion net debt, bp is now retiring this target and remains committed to maintaining a strong
investment grade credit rating.
. bp is introducing an intent going forward to offset dilution from vesting of awards under employee
share schemes through buybacks. Surplus cash flow* is now defined after the cost of buying back
these shares.
. In addition, bp remains committed to returning at least 60% of surplus cash flow to shareholders
through share buybacks, subject to maintaining a strong investment grade credit rating. In
considering the quantum of buybacks, the board will take account of the cumulative level of, and
outlook for, surplus cash flow with the intention to provide guidance on a quarter-forward basis
while macro uncertainties remain.
. For 2021:
. In the second quarter, bp intends to offset the expected full-year dilution from the vesting of
awards under employee share schemes through buybacks, at a cost of around USD500 million.
. Subject to maintaining a strong investment grade credit rating, the board is committed to using 60%
of surplus cash flow for buybacks, planning to allocate the remaining 40% to further strengthen the
balance sheet and support our strong investment grade credit rating.
. During the first quarter, bp generated surplus cash flow of USD1.7 billion after having reached its
net debt target of USD35 billion. During the second quarter, cash flow is expected to be impacted by
the USD1.2 billion pre-tax annual Gulf of Mexico oil spill payment, further severance payments and a
smaller improvement in realized refining margins relative to the quarter to date rise in our RMM*.
As a result of these factors we expect a cash flow deficit in the second quarter.
. In the second half of the year bp expects to generate surplus cash flow above an oil price of
around USD45 per barrel with an RMM of around USD13 per barrel and Henry Hub of USD3 per mmBtu.
. bp will provide an update on our third quarter buyback plans at the time of our second quarter
results, taking into account the surplus cash flow in the first half of the year as well as the
outlook for surplus cash flow.
Disciplined strategic progress
. Oil production & operations: in April in the Gulf of Mexico, the Argos platform for bp's Mad Dog 2
development arrived, on track for start-up in 2022, and bp announced the high-quality Puma West oil
discovery.
. Customers & products: bp agreed to acquire a stake alongside Daimler and BMW in Digital Charging
Solutions, a leading developer of digital charging software, and bp pulse announced the roll out of
new EV-only ultra-fast charging hubs across the UK. bp also added further strategic convenience
sites* to its network during the quarter.
. Gas & low carbon energy: bp and EnBW were selected as preferred bidder for UK offshore wind leases
and bp completed formation of its US offshore wind partnership with Equinor. bp announced plans for
the UK's largest blue hydrogen production facility in Teesside. Start of production from two new
gas projects - Raven in Egypt and Satellite Cluster in India - was announced in April.
We generated around USD11 billion of cash inflow in the first quarter, enabling us to reach our USD35 billion net debt
target significantly ahead of plan and move to the second phase of our financial frame. We are starting buybacks in the
second quarter with the intent to offset the full-year dilution from employee share schemes. In addition, we intend to
distribute 60% of surplus cash flow for 2021 through share buybacks, with the remaining 40% being used to further
strengthen our balance sheet. We'll outline these plans further in our second quarter results.
Murray Auchincloss
Chief financial officer
The commentary above contains forward-looking statements and should be read in conjunction with the cautionary (MORE TO FOLLOW) Dow Jones Newswires
April 27, 2021 04:16 ET (08:16 GMT)
