BP (LSE: BP) revealed a third-quarter loss on Tuesday, after the previous quarter ended in profit. The market was not best pleased, and at the time of writing the BP share price is down 2.5%.
There were a number of one-offs in the reported figures though, and the energy giant revealed an underlying profit. On a statutory basis, we saw a replacement cost (RC) loss of $2,934m. But on an underlying basis, that swings to an RC profit of $3,322m. That’s ahead of the previous quarter.
The nine months produced an underlying RC profit of $8,750m, compared to a loss of $5,805m in the same period a year previously.
Reducing debt
BP’s net debt is reducing too. At $31,971m, it’s down from $32,706m at the end of the prior quarter, and from $40,379m at the same point the year before.
Chief executive Bernard Looney said the company is “delivering significant cash to strengthen our finances, grow distributions to shareholders and invest in our strategic transformation.”
On that front, BP also announce a new share buyback programme. The company said: “Taking into account surplus cash flow generated in the first nine months of the year after having reached the net debt target of $35bn, the maximum amount allocated to the programme is around $1.25bn for a period up to and including 7 February 2022.”
BP share price boost?
It’s all part of BP’s plan to distribute 60% of surplus cash flow in 2021.
Whether the buyback lends any significant support to the BP share price remains to be seen. But by reducing the number of shares in existence, future earnings and dividends will be less thinly spread.