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British oil company BP rakes in profit in recent quarterly earnings as oil market recovers from pressure exerted by the pandemic.
The BP earnings showed a profit of $7.8 billion in the first half of 2021. In the first quarter of the year, it had already accrued a net profit of $2.6 billion. This capital return came as the business is in the process of rebounding strongly after the pandemic hit in 2020. In the same period last year, the oil firm posted a loss of $21.2. Replacement cost profits of $5.7 billion for six months against a YoY $18.3 billion loss were also reported.
A Quick Run-through of BP Earnings in Recent Times
BP’s shares traded almost 15% up in Tuesday’s session. However, it was at a 47$ low at this same period in 2020. Furthermore, company stock increased 2.3% in early trade on Tuesday. At the end of the second quarter, the oil giant’s operating cash flow was $5.4 billion. This figure also covers the annual $1.2 billion payment the company dispenses for the Gulf of Mexico Oil Spill in 2010. BP’s net debt decreased for the fifth consecutive quarter from $33.3 billion to $32.7 billion in the first quarter. This represents an overall debt decrease from $51 billion in the first quarter of last year.
The Oil Market Post-Pandemic
BP’s CEO Bernard Looney credits the recent positive development to strong business performance, and savvy and optimal management of company finances. Speaking with CNBC, Bernard also pointed out that the higher product price is a major factor in increased dividend payout to shareholders. He noted that he intends to see this improvement carry on for several years as oil demand will only increase. BP is not the only energy major that shares this view of an improving economy with suitable parameters post-pandemic. Royal Dutch Shell, Total Energies, and Equinor all stated plans to buy back shares last week. These gestures may reassure the oil companies’ investors that the worst of the pandemic may finally be behind them.
However, it should be noted that the share prices of several of these energy majors have not reflected the improvement in company earnings. Even though the worst of the pandemic may be over, there are still uncertainties and challenges to contend with.