BP warns on coronavirus impact as profits dragged lower by weak oil price
Bob Dudley delivered his last set of annual results as BP boss, as the company blamed a "weaker environment" for lower earnings.
Tuesday 4 February 2020 16:32, UK
BP has warned of the impact of the coronavirus on the oil market as it blamed already-weak crude prices for a sharp fall in its annual profits.
The FTSE 100 firm said the "weaker environment" during 2019 was largely to blame as underlying replacement cost profits dropped 21% to $10bn.
Finance director Brian Gilvary told Reuters that a global economic slowdown caused by the coronavirus would reduce consumption by 300,000 to 500,000 barrels per day, roughly 0.5% of demand.
But the company - a staple of many UK pension funds - hiked its latest quarterly dividend as departing chief executive Bob Dudley said it was "performing well".
The results come after rival Royal Dutch Shell also reported a fall in profits last week.
Both firms have been affected by the weakness in the oil price - which was held back last year by the subdued global economy, despite occasional spikes when Middle East tensions flared up.
BP's annual results recorded the average price of a barrel of Brent crude for the year at just over $64, down from $71 for the previous year.
It has been even weaker recently, slipping below $54 overnight as fears about the impact of the coronavirus dominate sentiment.
BP's fourth quarter figures showed a 26% decline in profits to $2.6bn - but that was better than markets had been expecting.
Shares rose more than 4%.
Mr Dudley, who is now stepping down to be replaced as chief executive by Bernard Looney, said: "BP is performing well, with safe and reliable operations, continued strategic progress and strong cash delivery.
"This all supports are commitment to growing distributions to shareholders over the long term and the dividend rise we announced today."
Stuart Lamont, investment manager at Brewin Dolphin, said: "BP's results have come in slightly better than expected, but they are still a reflection of the challenging environment for oil and gas companies."