bp's third quarter 2024 results
3Q at a glance
The key numbers from our third quarter 2024 results
Highlights
3Q24 underlying replacement cost (RC) profit $2.3 billion
- Underlying RC profit for the quarter was $2.3 billion, compared with $2.8 billion for the previous quarter. Compared with the second quarter 2024, the underlying result reflects weaker realized refining margins, a weak oil trading result and lower liquids realizations, partly offset by higher gas realizations. The gas marketing and trading result was average. The underlying effective tax rate (ETR)* in the quarter was 42%.
- Reported profit for the quarter was $0.2 billion, compared with a loss of $0.1 billion for the second quarter 2024. The reported result for the third quarter is adjusted for inventory holding losses* of $1.2 billion (pre-tax) and a net adverse impact of adjusting items* of $1.6 billion (pre-tax) to derive the underlying RC profit. Adjusting items pre-tax include impairments of $1.7 billion (see Note 3) and favourable fair value accounting effects* of $0.4 billion. See page 27 for more information on adjusting items.
Segment results
- Gas & low carbon energy: The RC profit before interest and tax for the third quarter 2024 was $1.0 billion, compared with a loss of $0.3 billion for the previous quarter. After adjusting RC profit before interest and tax for a net adverse impact of adjusting items of $0.7 billion, the underlying RC profit before interest and tax* for the third quarter was $1.8 billion, compared with $1.4 billion in the second quarter 2024. The third quarter underlying result before interest and tax is largely driven by higher gas realizations. The gas marketing and trading result was average.
- Oil production & operations: The RC profit before interest and tax for the third quarter 2024 was $1.9 billion, compared with $3.3 billion for the previous quarter. After adjusting RC profit before interest and tax for a net adverse impact of adjusting items of $0.9 billion, the underlying RC profit before interest and tax for the third quarter was $2.8 billion, compared with $3.1 billion in the second quarter 2024. The third quarter underlying result before interest and tax reflects lower liquids realizations and higher exploration write-offs.
- Customers & products: The RC profit before interest and tax for the third quarter 2024 was $23 million, compared with a loss of $0.1 billion for the previous quarter. After adjusting RC profit before interest and tax for a net adverse impact of adjusting items of $0.4 billion, the underlying RC profit before interest and tax (underlying result) for the third quarter was $0.4 billion, compared with $1.1 billion in the second quarter 2024. The customers third quarter underlying result was higher by $0.1 billion, reflecting broadly flat fuels margins, seasonally higher volumes partly offset by costs. The products third quarter underlying result was lower by $0.9 billion, mainly reflecting weaker realized refining margins and a weak oil trading contribution which was lower than the second quarter.
Operating cash flow* $6.8 billion and net debt* $24.3 billion
- Operating cash flow in the quarter was $6.8 billion. This includes a working capital* release of $1.4 billion (after adjusting for inventory holding losses, fair value accounting effects and other adjusting items), reflecting the unwind of a working capital build in the first quarter, impact of the price environment and timing of various payments (see page 28). Net debt increased to $24.3 billion compared to the second quarter, primarily driven by lower operating cash flow, higher capital expenditures and lower divestment and other proceeds.
Growing distributions within an unchanged financial frame
- A resilient dividend is bp’s first priority within its disciplined financial frame, underpinned by a cash balance point* of around $40 per barrel Brent, $11 per barrel RMM and $3 per mmBtu Henry Hub (all 2021 real). For the third quarter, bp has announced a dividend per ordinary share of 8 cents.
- bp is committed to maintaining a strong balance sheet and strong investment grade credit rating. Through the cycle, we are targeting to further improve our credit metrics within an 'A' grade credit range.
- bp continues to invest with discipline and a returns focused approach in our transition growth* engines and in our oil, gas and refining businesses.
- The $1.75 billion share buyback programme announced with the second quarter results was completed on 25 October 2024. Related to the third quarter results, bp intends to execute a $1.75 billion share buyback prior to reporting the fourth quarter results. Furthermore, bp is committed to announcing $1.75 billion for the fourth quarter of 2024. In addition, our previous guidance for at least $14 billion of share buybacks through 2025 at market conditions around bp's fourth quarter 2023 results(a) and subject to maintaining a strong investment grade credit rating, is currently unchanged, although as part of the update to our medium term plans in February 2025, we intend to review elements of our financial guidance, including our expectations for 2025 share buybacks.
- In setting the dividend per ordinary share and buyback each quarter, the board will continue to take into account factors including the cumulative level of and outlook for surplus cash flow, the cash balance point and maintaining a strong investment grade credit rating.
