BP said it expected to buy back about $1bn of shares each quarter and increase its dividend over the next five years as the oil company swung to a second-quarter profit.
Underlying replacement cost profit was $2.8bn in the three months to the end of June compared with a $6.7bn loss a year earlier after oil prices rebounded. Profit was $2.6bjn in the first quarter of 2021.
BP increased its second-quarter dividend to 5.46p a share from 5.25p a year earlier and said it would buy back $1.4bn of shares from first-half suprplus cash flow.
The FTSE 100 group said if oil prices average $60 per barrel it expected to buy back about $1bn of shares per quarter and to have capacity for a 4% dividend increase through 2025. BP said it would consider the outlook for cash flow and keeping a strong investment grade credit rating when deciding on the dividend and buybacks.
BP’s net debt fell to $32.7bn from $40.9bn a year earlier and $33.3bn at the end of the first quarter. The company said it would use 60% of surplus cash flow for buybacks and the rest for strengthening its balance sheet.
Murray Auchincloss, BP’s chief financial officer, said: “We have delivered another strong set of results underpinned by an improving environment and our disciplined financial frame. “Taken together, we are building a track record of delivery, supporting our investor proposition to grow long-term value.”
