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Oil company BP swung to profit in the second quarter amid higher oil prices and a broader recovery in the global economy this year after posting a loss in the same period a year earlier.
The company earned $3.1 billion in the three months to the end of June, compared with a $16.8bn loss in the year-earlier period.
BP is increasing its dividend by 4 per cent, after slashing payouts to shareholders last year. It will also begin a $1.4bn share buyback programme.
The company’s shares gained 2.5 per cent after the earnings announcement on Tuesday.
BP clawed back losses this year, after posting a robust $4.6bn profit for the first three months of the year, taking its overall first-half net profit to $7.7bn, compared with a $21.2bn loss in the same period a year earlier.
Losses in the first half of last year increased amid a crunch in demand due to the Covid-19 pandemic, forcing the UK-based company to slash its dividend payouts.
“Based on the underlying performance of our business, an improving outlook for the environment and confidence in our balance sheet, we are increasing our resilient dividend by 4 per cent per ordinary share and, in addition, we are commencing a buyback of $1.4bn from first-half surplus cash flow,” BP chief Bernard Looney said.
“On average, at around $60 per barrel, we expect to be able to deliver buybacks of around $1bn per quarter and to have capacity for an annual increase in the dividend per ordinary share of around 4 per cent, through 2025.”
BP is not the only big oil company to start share repurchases amid a favourable environment for crude commodity prices.
Chevron said on Friday that it would begin share buybacks during the current quarter, with repurchases of $2bn to $3bn a year. Other energy companies such as Royal Dutch Shell and Total Energies have also reinstated share buybacks.
