Profit at oil and gas giant BP slumped by nearly 50 per cent in the fourth quarter of last year as the group took hefty writedowns on inventory.
Overall, the company reported a loss for the fourth quarter of $2bn (£1.6bn), compared with a profit of $0.2bn in the same period last year.
Underlying replacement cost profit – which reflects the cost of replacing inventory sold, excluding inventory holding gains/losses – for the quarter fell from $2.3bn in the third quarter of 2024 to $1.2bn.
The company said operating cash flow for the quarter came in at $7.4bn, around $0.7bn higher for the quarter, and it ended the year with net debt of $23bn.
Based on the results, which fell far short of expectations, BP said it would review its plans for share buybacks in 2025.
Murray Auchincloss, chief executive officer of BP said: “In 2024 we laid the foundations for growth. We have been reshaping our portfolio – sanctioning new major projects, and focusing our low-carbon investment – and we have made strong progress in reducing costs.
“Building on the actions taken in the last 12 months, we now plan to fundamentally reset our strategy and drive further improvements in performance, all in service of growing cash flow and returns. It will be a new direction for BP and we look forward to sharing it at our capital markets update on 26 February.”
BP is under pressure to deliver
BP’s results will increase pressure on the company’s management to steer the group back to growth after years of stagnation.
Over the weekend, it emerged activist hedge fund Elliott Investment Management had built a position in the company. The news sent the stock higher by seven per cent on Monday as investors cheered potential action.
While the size of Elliott’s stake has not been disclosed, the news of its position has fueled talk of an overhaul of BP, its strategy and the company’s board of directors.
Analysts at Jefferies said: “Given Elliott’s track record, we believe its involvement could lead to board changes, portfolio rationalisation (with a focus on exiting low carbon assets and certain retail regions), and capital expenditure prioritisation on upstream projects.”