BP (NYSE:BP) Reports 91% Plunge in Profit

BP plc (ADR) (NYSE:BP)

BP plc (NYSE:BP) suffered a wider loss of $2.23 billion in the fourth quarter than last year’s $969 million loss. On an adjusted basis, replacement cost profit plunged 91% to $196 million from $2.24 billion in Q4 last year. The sharp drop in earnings was mainly due to the significant fall in worldwide oil and gas prices. As a result, average price realizations plunged 46.3% on year over year basis.

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Price Realizations

BP realized $37.42 per barrel in the United States in the fourth quarter, $40.49 in Europe and $36.10 in rest of the world. Its average price realization was $37.05 a barrel globally. The drops were 47.6% in America, 43.05% in Europe and 45.8% in rest of the world. Sequentially, the average price realization fell 15.8% from $44.01 per barrel. That suggested damage done to the top line and bottom line.

The situation is no different for gas either. The company realized $3.47 per mcf. In America, it was $1.71 per mcf while  Europe delivered price realization of $6.06 and the rest of the world $4.00 per mcf. That represented a drop of 48.18% in the United States, 25.76% in Europe, and 36.81% in rest of the world. The average YoY drop was 37.36% in the fourth quarter.

Maintains Dividend

BP maintained its dividend rate of ten cents per ordinary share, which would be paid on March 24. The company’s net debt increased to $27.2 billion from $22.6 billion. The oil firm indicated that it would maintain its net debt ratio at around the 20% level compared to the current level of 21.6%, which was higher than the preceding year’s 16.7% level.

BP’s total revenues and other income plunged 34.45% to $49.23 billion from $75.1 billion last year. Gain on sales, fixed assets and businesses boosted overall revenue by $288 million. For the first quarter, the company sees price realization continuing a downtrend in line with global oil prices.

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