LONDON -- BP Plc. said that its first-quarter profit fell 57 percent as lower oil prices and lower margins in its refining business hit the company’s bottom line, says a report by Dow Jones. The London -based oil firm said pro forma net profit, adjusted for special items, fell to $1.58 billion compared to $3.71 billion a year earlier
Replacement cost profit before exceptional items, which strips out the effects of changing values of oil inventories, was $924 million compared with $3 billion a year earlier. The group’s pretax profit fell 58% to $2.09 billion, compared with $5.01 billion.
Earnings per share for the quarter declined 54 percent to 5.75 U.S. cents, down from 12.51 cents a year earlier.
“Led by the U.S., the world economy is showing signs of demand recovery following its recent growth pause,” BP’s CEO, Sir John Browne, said Tuesday. But he warned that margins in the downstream sector remain “challenging.”
Crude oil prices have risen since the end of February in response to the Organization of Petroleum Exporting Countries’ production cuts and signs that demand is beginning to recover. Also, the risk of the Middle East conflict affecting supplies is keeping the market volatile and providing added support to prices.
“The crude oil market is expected to be broadly balanced in the second quarter, with average realizations currently anticipated to be higher than in the first quarter” said Browne.
“Capital expenditure is on track for the year’s target of $12 billion to 13 billion, excluding acquisitions,” Lord Browne added.
