The UK’s largest oil company, BP, announced a sharp drop in fourth-quarter profits due to lower refining margins. At the same time, the company unveiled a $1.75 billion share buyback and promised a “fundamental” strategic review.
According to an LSEG survey, BP reported an “underlying replacement cost profit” (RC profit), used as a key net income indicator, of $1.169 billion for the fourth quarter—down from $2.99 billion in the same period last year and below analysts’ expectations of $1.2 billion.
BP attributed the 48% quarterly profit decline to weaker realized refining margins, a stronger impact from trading operations, seasonally lower customer sales volumes and fuel margins, as well as higher underlying costs in other business segments and corporate operations, CNBC reports.
BP’s net debt surged to nearly $23 billion in Q4, a 10% year-on-year increase. Meanwhile, capital expenditures (capex) fell sharply to $3.7 billion between October and December, compared to $4.7 billion in Q4 2024.
Despite its financial struggles, the energy giant pushed forward with a $1.75 billion share buyback. Analysts had previously questioned whether BP would slow down buybacks to stabilize its balance sheet.