British oil company BP's profit falls 63% on lower energy prices

British oil company BP’s net profit fell to three billion dollars (69.2 billion Kč) in the third quarter from 8.15 billion USD in the same period last year, due to a sharp drop in market energy prices. The company said this today in a press release and added that it had extended its USD 1.5 billion share buyback program. The results fell short of analysts’ estimates.

Profit excludes changes in the value of inventories. Analysts had expected profit of around USD 4 billion, according to Reuters, with results falling short of estimates mainly because of significantly lower profits in the gas and low-carbon technology divisions. However, profit rose sharply compared with the second quarter, mainly thanks to higher oil and gas production, high margins in oil processing, less refinery maintenance and very strong performance in oil trading. Profit for April to June was USD 2.6 billion.

The company also warned that, based on its current expectations, industry refining margins will be significantly lower in the fourth quarter than in the third. It also expects capital expenditure of USD 16 billion this year, at the lower end of the previously stated range of USD 16 billion to USD 18 billion.

The company booked a pre-tax impairment of USD 540 million on its wind power projects in the United States. Authorities rejected BP’s request for better terms to reflect what the company described as inflationary pressures and delays in issuing permits. BP’s partner in the project is Norwegian company Equinor, which booked a USD 300 million impairment on its US offshore wind portfolio.