Bigger payouts

29 October 2019 By George Hay Follow @gfhay

The UK oil major had a messy third quarter as it took a charge on recent disposals, and borrowing jumped year-on-year. But it also pays out less of its cash than peers. If incoming boss Bernard Looney can limit future writedowns, he has a simple way to get investors onside.

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BP on Oct. 29 reported net profit after stripping out one-offs and the effect of price changes on inventory of $2.3 billion for the third quarter, compared to $3.8 billion for the same period in 2018, and above the $1.7 billion forecast by a survey of analysts compiled by the company.

The UK oil major had already flagged that its income statement would include a charge representing impairments and losses on sales of businesses. In the third quarter this amounted to a net impairment charge of $3.3 billion.

The writedown meant that BP’s net debt rose from 27.1% of net debt and equity combined in the third quarter of 2018 to 31.7%. This was caused partly by equity falling from $103.4 billion to $100 billion over the same period and partly by net debt rising from $38.5 billion to $46.4 billion.

BP shares were down 0.9% to 507.3 pence as of 0840 GMT on Oct. 29.

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