Newspaper article The Evening Standard (London, England)

Surging Oil Price Hands BP a New Profits Record; CITY BRIEFING

Newspaper article The Evening Standard (London, England)

Surging Oil Price Hands BP a New Profits Record; CITY BRIEFING

Article excerpt

BP SURGED to yet another profits record today, racking up its bestever quarterly bottom line with earnings in the first three months of the year coming in at more than $2.5 million ([pounds sterling]1.3 million) an hour.

Riding the crest of the soaring oil price, Britain's biggest company said profits in the first quarter of this year were $5.49 billion, up 29% on the first quarter of 2004.

During the three months, Brent crude prices averaged $47.62, nearly 50% higher than a year ago - record high international oil prices are not only making life more expensive for the motorist but also leading to rising energy and manufacturing costs.

But BP's profit boom is unlikely to stall. Chief executive Lord Browne said: "World economic growth was sustained into the first quarter of 2005 across all regions."

However, he added: "The current outlook is for some moderation of global growth towards trend rates through 2005." Of the quarterly results, he said: "This strong start in 2005 reflects the results of our significant investment programme over the past few years and improvements in underlying performance.

"In addition, continuing higher oil prices have generated substantial additional cashflow which has been applied to the share buyback programme."

The results confounded City analysts, who believed the oil boom to have peaked in the last quarter of 2004 and who, in consensus, had pencilled in profits [pounds sterling]600 million lower.

Record inflows of cash - $9.4 billion in the quarter - helped continue the oil major's programme of getting money back to investors by reducing the number of shares in issue. BP spent $2 billion buying back 193 million of its shares during the quarter.

That also enabled the company to raise its quarterly dividend by 17% to 4.45p, or in dollar terms a rise of 26% to 8.5 cents.

The results were flattered by $535 million of non-operating gains, especially from the sale of BP's interests in the North Sea Ormen Lange field, though there were gains of $776 million in the first quarter of 2004. …

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