Plus   Neg

BP Sees $1 Bln Charge In Q1; Cuts View For FY Organic Capital Spend; Stock Down

British energy giant BP Plc. (BP.L,BP_UN.TO,BP) Wednesday said it currently expects to take a non-cash, non-operating impairment charge of around $1 billion in the first quarter. The company said the challenging environment due to coronavirus or covid-19 pandemic would have an impact on its first quarter results.

Further, the company now expects 2020 organic capital spend to be around $12 billion, around 25% below prior full-year guidance, due to the COVID-19 pandemic and ongoing market disruption..

In its trading update, BP said its first-quarter reported Upstream production is expected to be lower than fourth-quarter 2019, in a range of 2,550-2,600 mboed. The Downstream refining availability is expected to be in a range of 95-96%.

Further, the company expects Downstream first quarter results to be impacted by a significant and growing decline in demand for fuels, jet fuel and lubricants as countries implemented significant measures to address COVID-19.

BP said it continues to monitor the impact of COVID-19 on global operations and there was no significant operational impact in the first quarter. This could change through the second quarter.

BP's first quarter 2020 results are scheduled to be reported on April 28.

BP has taken various actions in response to the COVID-19 pandemic and ongoing market disruption. The company said it has decided that for the next three months, no BP employees will be laid off as a result of virus-related cost cutting.

BP's existing divestment programme to deliver $15 billion of announced transactions by mid-2021 remains on track. Further, the company may revise the phasing of receipt of $10 billion of divestment proceeds by the end of 2020 as transactions complete, particularly while volatile market conditions persist. This includes the sale of Alaskan business to Hilcorp which is still expected to complete during 2020, subject to regulatory approvals.

BP expects to achieve around $2.5 billion of cash cost savings by the end of 2021, compared with 2019, with digitisation and increased integration across the group.

BP has around $32 billion of cash and undrawn facilities available at the end of the first quarter 2020.

In London, BP Plc shares were trading at 332.60 pence, down 3.37 percent.

For comments and feedback contact: editorial@rttnews.com

Business News

Editors Pick
Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said that the current state of the COVID-19 pandemic in the U.S. is "really not good." The U.S. is the country worst-affected by the coronavirus and has recently seen a surge in coronavirus infections as lockdown restrictions are eased. Granules Pharmaceuticals, Inc. recalled twelve (12) lots of type 2 diabetes medication Metformin hydrochloride Extended-Release, in the form of oral film-coated tablets, for the potential presence of nitrosamine impurity, N-Nitrosodimethylamine (NDMA), above levels of the Acceptable Daily Intake Limit (ADI), the U.S. Food and Drug Administration or FDA said in a statement. Palantir Technologies Inc., the Silicon Valley big data analytics company that has handled U.S. government's certain sensitive projects, said it has confidentially filed documents with the Securities and Exchange Commission to go public. In a statement, the company said the proposed public listing of its Class A common stock is expected to take place after the SEC completes its review process.
Follow RTT