BP sinks to first loss in a decade on pandemic hit By Reuters

By Ron Bousso and Shadia Nasralla

LONDON (Reuters) – BP (LON:BP)’s profit in the last quarter of 2020 sunk to $115 million due to weak energy demand and poor trading results, with fuel consumption continuing to slide so far this year due to tightening travel restrictions.

On an annual basis, BP plunged to a $5.7 billion loss, its first in a decade, after the oil major wrote down the value of crude and gas assets by $6.5 billion in the second quarter.

BP said on Tuesday its quarterly results were impacted “significantly” by lower fuel and gas sales, weak refining and trading profits as well as a $154 million write-off in the value of oil and gas exploration assets.

“These results reflect a truly tough quarter,” Chief Financial Officer Murray Auchincloss said in a statement.

Demand is nevertheless expected to recover in 2021, BP said.

(GRAPHIC: BP’s annual profits – https://graphics.reuters.com/BP-RESULTS/ygdpzalwrvw/chart.png)

Tighter global natural gas markets are expected to further support profits, it said, adding it saw coronavirus related restrictions weighing on refined products demand in the first quarter.

Its fourth-quarter underlying replacement cost profit, the company’s definition of net income, of $115 million fell short of the $360 million seen in a company-provided survey of analysts.

That compared with an $86 million profit in the third quarter and a profit of $2.6 billion a year earlier.

For the year, BP reported an underlying loss of $5.69 billion, compared with a profit of $10 billion in 2019.

(GRAPHIC: BP’s quarterly profit – https://graphics.reuters.com/BP-RESULTS/jbyprnwrkpe/chart.png)

BP’s debt pile of $39 billion is expected to rise in the first half of this year as it continues to struggle with a weak environment, but the company said it remained on track to reduce it to $35 billion by early 2021.

BP’s dividend remained at 5.25 cents per share.