BP posts fall in profits

BP has posted a 22% drop in final quarter net profit to $2.97 billion (£1.5 billion), following a challenging year for the oil giant.

Chief Executive, Tony Hayward, described the fourth quarter results as ‘very disappointing’. However, we made gradual progress in bringing new oil and gas fields on stream and rebuilding refining capacity during the period added Mr Hayward.

In spite of the rising price of oil, the money BP makes from refining has been squeezed and 2 of its US refineries have seen output reduced.

However, despite the falling profits, the company has increased its fourth quarter dividend by 31%, reflecting a decision to use dividends to return value to shareholders instead of reducing the number of shares in circulation.

Peter Hitchens of Seymour Pierce said the numbers are disappointing, but I think that is more than made up for by the fact that we have got a step change in the dividend, suggesting that BP’s fortunes would now improve.

The figures are poor in comparison to the record annual profits of £13.9 billion, posted by rival Shell last week. Shell’s profit figure marked a record for a UK-listed company.

Furthermore, last week, US company ExxonMobil saw yearly profits of $40.6 billion, setting a record for a US firm.

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