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BP Boosts Dividend Despite Profit Fall As CEO Dudley Bows Out

BP increased its dividend by 2.4% to 10.5 cents per share, the second increase since the BHP acquisition.

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BP raised its dividend and said it had completed a $1.5 billion share buyback programme in a sign of confidence in its growing oil and gas business on the last day in office for Chief Executive Bob Dudley.

BP shares jumped 3.5% in early Tuesday trading.

As Bernard Looney prepares to take the helm, BP struck a positive tone even as oil prices slumped to a near year-low on concerns over China's coronovirus, bucking a trend among peers that reported a sharp slowdown in revenues last week.

The shareholder rewards came as the London-based company reported a 26% drop in fourth-quarter profit, which easily beat forecasts, and $2.7 billion in charges.

Cash flow rose by more than 10% in 2019 to $25.8 billion, despite lower commodity prices, as a result of higher production - particularly in U.S. shale following the acquisition of BHP assets.

Still, BP's debt and debt-to-capital ratio, known as gearing, both rose by the end of 2019 from a year earlier, even as BP sold $9.4 billion of assets, underlying the strain oil companies face as demand for fuels and chemicals weakened last year.

"Solid delivery in a tough environment," Redburn analyst Stuart Joyner concluded in a note, adding the focus would be on reducing debt.

Rivals ExxonMobil, Royal Dutch Shell and Chevron reported sharp drops in 2019 revenues due to softer demand, particularly in Asia.

Dudley, 64, bows out after a decade at BP's helm. He was abruptly ushered in as CEO in October 2010 after his predecessor Tony Hayward stepped down in the wake of the deadly Deepwater Horizon spill in the Gulf of Mexico.

He has since led the company through a deep and long downturn and rising pressure from investors to adapt to the transition to more renewable energy.

Looney, who takes over on Wednesday, is planning to expand BP's climate targets and is considering a major overhaul to the structure of the 111-year-old company.

"I am proud to be handing over a safer and stronger BP to Bernard and his team. I am confident that under their leadership, BP will continue to successfully navigate the rapidly-changing energy landscape," Dudley said in a statement.

BP increased its dividend by 2.4% to 10.5 cents per share, the second increase since the BHP acquisition.

It reported $2.57 billion in fourth-quarter underlying replacement cost profit, its definition of net income, exceeding forecasts of $2.1 billion in a company-provided survey of analysts.

That was down from $3.5 billion a year earlier but up from $2.3 billion in the third quarter.

Oil and gas production in 2019, including BP's stake in Russian oil giant Rosneft, rose 2.7 percent from a year earlier to 3.8 million barrels of oil equivalent.

(Reuters)


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