British oil group BP's profit falls 70 percent, but company to increase dividend

British oil company BP posted net profit of 2.59 billion dollars (56.3 billion Kč) in the second quarter, down almost 70 percent year on year. The company said today in a press release. The decline was mainly due to lower oil prices compared with last year, and other major companies in the sector are also facing sharp drops. BP, however, will increase its dividend.

The quarterly result fell short of analysts' estimates. In a poll by Refinitiv, they had forecast a figure of around 3.5 billion dollars. The company posted net profit of almost five billion dollars in the first quarter.

The company said the result reflected significantly lower refining margins, higher turnaround and maintenance activity, as well as weak oil trading performance. However, management proposed increasing the dividend for the second quarter by ten percent to 7.27 cents per ordinary share. BP also said it would buy back 1.5 billion dollars' worth of its shares over the next three months.

„It was a very good quarter,“ BP Chief Executive Bernard Looney told CNBC.

„Overall, then, we are doing what we said we would do,“ he added. That means, he said, that the company will maintain its performance while also carrying out its transformation. „We are very pleased with the results,“ he concluded.

Oil prices were significantly higher a year ago because of the effects of Russia's invasion of Ukraine. Western countries imposed a series of sanctions on Russia, leading to fears that there would not be enough raw materials on the market. Prices are now lower partly because market conditions have calmed, and partly because global economic growth has slowed considerably and demand has fallen.

Other companies to report significantly lower second-quarter profits in Europe than a year earlier included British rival Shell and French oil giant TotalEnergies. US oil major ExxonMobil also saw its second-quarter profit fall 56 percent year on year.

The five largest Western oil companies posted combined profits of almost 200 billion dollars last year. This was due to the effects of the war in Ukraine and the associated sharp rise in prices for some commodities. BP reported a record profit of 27.7 billion dollars for the year.