Higher oil prices and favourable exchange rate movements saw the FTSE 100 group turn an underlying replacement cost profit of US$12.7bn in 2018, up from US$6.2bn a year earlier.
It is the second year in a row that BP has doubled its profits as it continues its recovery from a wretched 2016 when it racked up losses of US$6.5bn.
But despite the surge in profitability, BP – which brought six new projects onstream last year, including the Clair Ridge project, west of Shetland – only upped its annual dividend by 1.3% to 40.5 US cents a share (2017: 40.0 US cents).
It was even worse for those shareholders who take their payment in sterling: reflecting a stronger pound, their annual dividend actually dropped to 30.57p a share from 30.98p in 2017.
Operating cash flow growth
Excluding payments related to the Gulf of Mexico oil spill, which cost it US$3.2bn last year, despite happening nine years ago, operating cash flow totalled US$26.1bn, compared with US$24.1bn in 2017.
Underpinning the solid performance was record reliability at its plants, while throughput at its refineries reached all-time highs. In total, BP averaged production of 3.7mln barrels of oil equivalent per day (boepd) in 2018.
Boss says strategy is 'clearly working'
“We now have a powerful track record of safe and reliable performance, efficient execution and capital discipline,” said chief executive Bob Dudley, who took home US$13.4mln in 2017.
“And we're doing this while growing the business - bringing more high-quality projects online, expanding marketing in the Downstream and doing transformative deals such as BHP.”
He added: “Our strategy is clearly working and will serve the company and our shareholders well through the energy transition.”
In early afternoon trading, BP shares were 4.8% higher at 545.10p, topping the FTSE 100 leader board.
Helal Miah, investment research analyst at The Share Centre commented: “Overall, this is an excellent set of results and we would expect the group to make further progress should oil prices hold.
“For investors BP is an attractive proposition with a healthier outlook and good dividends. We maintain our ‘Buy’ recommendation for investors seeking a balanced return willing to accept a medium level of risk.”
-- Adds analyst comment, share price --