Investing.com -- British oil giant BP (LON:BP) reported a steep decline in its fourth-quarter profit, citing weaker refining margins, lower energy prices, and higher costs.
The company posted an underlying replacement cost profit of $1.2 billion for the final quarter of 2024, a drop from $3 billion in the same period a year earlier.
The reported loss for the quarter was $2.0 billion, compared with a modest profit of $0.2 billion in the third quarter of 2024.
The downturn in earnings was driven by a combination of factors, including lower refining margins, weaker fuel sales, and the impact of turnaround activity at refineries.
BP’s gas and low-carbon energy business reported an underlying RC profit of $2.0 billion, up from the previous quarter but below the levels seen a year earlier.
The company’s oil production and operations division posted an underlying RC profit of $2.9 billion, reflecting lower exploration write-offs but also weaker realized prices.
Meanwhile, its customers and products segment suffered a loss of $0.3 billion due to reduced fuel margins and seasonally lower demand.
Despite the weaker earnings, BP maintained its commitment to shareholder returns, announcing a dividend of 8 cents per share and a $1.75 billion share buyback program for the first quarter of 2025.
The company also continued efforts to streamline its portfolio, securing divestment proceeds of $2.8 billion in the fourth quarter, bringing the full-year total to $4.2 billion.
Against this backdrop, BP has vowed to undertake a “fundamental reset” of its strategy. “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,” said Murray Auchincloss, chief executive at BP in a statement.
BP’s financial results come amid a period of volatility in global energy markets, with oil and gas prices fluctuating and demand patterns shifting.
The company’s operating cash flow for 2024 stood at $27.3 billion, down from $32.0 billion in the previous year. Capital expenditure remained relatively stable at $16.2 billion for the full year.
A sale of assets in Egypt and Trinidad will result in slightly lower production in BP’s upstream segment in 2025.
The first quarter is also expected to see pressure on refinery margins. By the end of 2026, the company aims to save at least $2 billion through disciplined investment and cost management.