Oil major BP posts 70% drop in second-quarter profit, raises dividend by 10%
LONDON — Oil major BP on Tuesday reported a nearly 70% year-on-year drop in second-quarter profits on the back of weaker fossil fuel prices, echoing a trend observed across the energy industry.
The British energy major posted second-quarter underlying replacement cost profit, used as a proxy for net profit, of $2.6 billion. Analysts had expected BP to report second-quarter profit of $3.5 billion, according to estimates collated by Refinitiv.
The second-quarter result compared with a profit of $4.96 billion recorded in the first three months of the year and with the $8.5 billion logged in the second quarter of 2022.
BP said the earnings reflected significantly lower realized refining margins, a higher level of turnaround and maintenance activity and a weak oil trading result.
Nonetheless, the energy giant boosted its dividend by 10% to 7.27 cents per ordinary share for the second quarter. BP also said it would repurchase $1.5 billion of its shares over the next three months.
“A very good quarter and that has given the board … the confidence to announce a $1.5 billion buyback program for the quarter and additionally we’ve raised the dividend by 10%,” BP CEO Bernard Looney told CNBC’s “Squawk Box Europe” on Tuesday.
“So, all in all, we’re doing what we said we would do which is performing while transforming and we’re very pleased with the results,” he added.
Shares of London-listed BP rose 0.6% during early morning deals.
Oil majors have failed to match the bumper profits posted during the same period of last year amid weaker commodity prices.
British rival Shell and French oil major TotalEnergies on Thursday reported a steep drop in second-quarter profit, while U.S.-based Exxon Mobil’s second-quarter profit slumped 56% year-on-year.
A ‘rapid’ and ‘orderly’ transition
The West’s five largest oil companies raked in combined profits of nearly $200 billion in 2022, as oil and gas prices soared following Russia’s full-scale invasion of Ukraine. For its part, BP reported annual record profit of $27.7 billion for the full year of 2022.
Oil and gas prices came under pressure in the first half of this year, however, as global economic jitters outweighed supply-demand fundamentals.
The BP logo is displayed outside a petrol station near Warmister, on August 15, 2022 in Wiltshire, England.
Matt Cardy | Getty Images News | Getty Images
Like Shell, BP has attracted criticism in recent months for watering down its climate commitments. In 2020, the company committed to become a net-zero company “by 2050 or sooner,” then said earlier this year that it would scale back plans to cut carbon emissions by reducing its oil and gas output.
It had previously pledged that emissions would be 35% to 40% lower by the end of the decade, but said in early February that it was now targeting a 20% to 30% cut.
Asked on Tuesday why BP had moved these goalposts, Looney replied, “We, actually, in February announced that we’re leaning into our strategy and announced that we were going to put $8 billion more into the energy transition this decade, spending between $55 [billion] and $65 billion.”
“At the same time, we announced that we would increase our investment in oil and gas, and that’s because it’s crucial that we invest in the supply of today’s energy system to meet the demand,” Looney added.
“If we don’t, there’s only one thing that is going to happen and that’s that prices are going to go up,” he added. “We need a rapid transition and we need to make sure that the transition is orderly.”
North Sea oil and gas
The BP CEO was also asked to comment on whether the company would be involved with new oil and gas licensing in the North Sea, which U.K. Prime Minister Rishi Sunak confirmed on Monday.
Sunak has insisted the move is “entirely consistent” with the country’s net-zero commitments, despite campaigners slamming the decision as “terrible for our energy security, the cost of living, and the climate.”
BP’s Looney said he expected the North Sea region to be a “great part of our company for many decades to come,” stressing support for policies that facilitate a rapid and orderly energy transition.
“To do that, we have to invest in today’s oil and gas system [and] in the U.K. that means investing in the North Sea,” he added.
Toyota’s new electric SUV is a surprise hit in China. Starting at just $15,000, the Toyota bZ3X is already the top-selling joint venture brand EV.
The $15,000 Toyota bZ3X is the top-selling foreign EV
After launching the bZ3X in March, Toyota’s joint venture, GAC Toyota, claimed that orders were “so popular that the server crashed.” It apparently secured over 10,000 orders in the first hour.
In its second month on the market, the bZ3X was the top-selling foreign-owned vehicle in China, beating out the Volkswagen ID.3 and ID.4 Crozz, Nissan N7, and BMW i3.
According to the latest update, the electric SUV retained the title once again in June. Peng Baolin, General Manager of Sales at GAC-Toyota, revealed on social media that the “delivery volume of Bozhi 3X in June reached 6,030 units.”
GAC Toyota announced on Weibo that cumulative deliveries have now exceeded 20,000 units, setting a new record for the fastest joint venture electric SUV sales to achieve the feat.
The company also claimed that the bZ3X “has the highest sales of new energy vehicles” among joint venture brands right now.
The bZ3X is Toyota’s “first 100,000 yuan-level pure electric SUV.” It’s available in seven different trims, starting at 109,800 yuan, or about $15,000.
Two variants have an added LiDAR, making Toyota the first joint venture brand to offer it in China. The smart driving version starts at 149,800 yuan ($20,500). For 159,800 yuan ($22,000), you can upgrade to the range-topping “610 Max” trim.
Powered by a 67.92 kWh battery, the long-range model is rated with a CLTC range of up to 610 km (379 miles). The base “Air” trim features a 50.03 kWh battery, good for a 430 km (267 miles) range.
The bZ3X measures 4,645 mm in length, 1,885 mm in width, and 1,625 mm in height, or about the size of BYD’s popular Yuan Plus (sold overseas as the Atto 3).
Inside is a significant upgrade from most Toyota models we are used to seeing. It features a tech-focused interior with a 12.3″ infotainment screen and an 8.8″ driver display.
Toyota markets it as an affordable family SUV with “a mobile space that is as comfortable as home.” With all the seats folded, the interior offers nearly 10 feet (3 meters) of space.
It’s also powered by Momenta’s 5.0 smart driving system, offering advanced smart driving features such as Level 2 assisted driving, remote parking, and more.
Electrek’s Take
Although it may not seem like much with Chinese EV makers like Xiaomi securing nearly 300,000 orders for the YU7 SUV in an hour, the bZ3X is selling surprisingly well for a foreign brand vehicle.
Global automakers are struggling to keep pace in China with an influx of new low-cost domestic EVs and an intensifying price war. However, Japanese automakers, including Toyota, have been some of the hardest hit.
During GAC Toyota’s Tech Day event last month, the company announced partnerships with China’s leading tech companies, including Huawei, Xiaomi, and Momenta, as it seeks to regain market share.
Ahead of the event, the company posted on Weibo that “god-level allies are coming to help,” adding “car industry bigwigs are coming.
Through May, Toyota’s sales in China are up 7.7% from the same period last year, with 530,000 vehicles sold. Will Toyota continue gaining traction in the world’s largest EV market? With the bZ5 now rolling out and several new models on the way, Toyota is looking for a comeback.
Source: Sohu, GAC-Toyota
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If you’re planning a summer camping trip or backyard cookout, or just want to be prepared for future blackouts, BLUETTI has you covered this Prime Day with up to 65% off portable power stations. And two standout models are turning heads: the all-new Elite 100 V2 and the powerhouse Elite 200 V2.
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Elon Musk told Tesla’s biggest cheerleader on Wall Street, Wedbush analyst Dan Ives, to ‘shut up’ and the reason why is absolutely ridiculous.
Dan Ives is one of the biggest pushers of Tesla’s stock on Wall Street. The Wedbush analyst can often bee seen on CNBC praising Tesla and its CEO, Elon Musk.
He has one of the highest price targets on Tesla on Wall Street with $500 price per share.
After Tesla’s deliveries came way under his expectations and down 13% year-over-year in the first quarter, he reiterated his price target, which would value Tesla at over $1.5 trillion.
That’s even though Tesla’s net earnings have steadily declined over the last 2 years, and it is on track to start losing money within the next year.
Ives’ faith in Tesla stock is solely based on Musk and his promises of self-driving vehicles and robots. Just last month, he said that “Musk is the best asset of Tesla. We see him as CEO until 2030.”
You would think that Musk would like this guy, but no.
Ives took to X today to suggest that Tesla’s board should give Musk a new pay package giving him 25% control over the company.
If that were to be given through more stock options, it would virtually double his stake in Tesla and represent a $200 billion payday for Musk. In exchange, Ives is only suggesting that Musk, who runs several other companies and projects, should commit to spending a certain amount of time at Tesla and that the board has oversight on his involvement in politics.
In response to the analyst, who is one of Musk’s biggest fans and is suggesting Tesla gives him $200 billion, Musk told him to “shut up”:
Musk is seen as having complete control over Tesla’s board, which led to the rescinding of his 2018 CEO compensation package. One of the points that the judge brought up was that Tesla never even negotiated with Musk about committing his time at Tesla as part of the compensation package despite knowing the CEO already had roles at several other companies.
Now, Musk is also launching his own political party, in addition to his roles at SpaceX, X, xAI, The Boring Company, and Neuralink.
Electrek’s Take
Even Dan, who is a complete Musk sycophant, is not a big enough sycophant for Musk.
How do you tell a guy suggesting Tesla give you $200 billion to “shut up” just because he added some very mild conditions? What’s his thinking here? How dare he ask the board to do its job and supervise me? Doesn’t he know that I own the board?
The remarkable thing is that you know Musk could easily circumvent any conditions imposed by the board, and the mere fact that those conditions would have been in the contract could have helped it avoid being rescinded in the first place.
Musk’s behavior makes no sense. Honestly, he appears to be increasingly disconnected from reality.
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