The cycle begins again. Most of the major energy companies have now posted their 24Q2 earnings reports. We will spend the next few weeks going through them.

The first company we will look at is BP, and as usual, we will take their financial statement and produce some visuals to make it easier to understand how they performed in 24Q2.

Today in a Snapshot

📈Financial Performance: U$70M in net profit with a total margin of 0.1%, down from 3.9% (U$2.0B) in 23Q2.
💵Cashflow: Strong cashflow position with U$3.4B added to the cash reserves.
⚖️Balance Sheet: Debt to equity ratio has increased from 2.23 to 2.33 due to a reduction in total company-controlled equity.

BP's overall net profit of U$70M and net margin of 0.1% were considerably lower than the same period last year, U$2.0B and 3.9%, respectively. BP primarily attributes this to the negative inventory adjustments.

Gas & Low Carbon Energy: Production was similar to last year at 899mboe/d, and the average retaliations were higher than last year. This should result in a higher profit for the sector. However, unfavourable financial adjustments resulted in an impact of -U$1.7B on the profits for this sector.

Customers & Products: Both segments were stronger than in the same period last year. Where Customers benefited from higher margins and volumes, and Products benefited from reduced turnaround.

Oil Production & Operations: Total hydrocarbon production and average realisations were higher than 24Q1 and 23Q2 at 1,481mboe/d and $55.75/boe. Coupled with favourable adjustments, BP improved its sector profit from U$1.9B to U$1.4B.

Sometimes counterintuitively, BP added U$3.4B to its cash reserves despite only making U$70M in net profit for the quarter. Compared to the last period, non-cash is a much more significant contributor to the operations activities. In Q1, BP was negatively impacted by U$2.1B in inventory movements. Whereas in Q2, there is a net positive impact from inventory movements and an additional asset sale contribution.

The reduction in company-controlled equity has slightly increased the debt-to-equity ratio from 2.24 in 24Q1 to 2.33 in 24Q2. This remains considerably higher than its peers. (See the 24Q1 roundup for a comparison of the 24Q1 numbers).

It turns out that BP published its equity walk, combining Q1 and Q2, to show the overall change in equity from 01-Jan-24. Fortunately, as I have the Q1 data, I was able to interpolate the Q2-specific walk.

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Cheers,

Connor

All data can be found on the BP Investors website.