London: British energy giant BP yesterday announced sliding net profit for the first quarter of the year compared with the same period in 2014, amid plunging oil prices.
Profit after tax stood at $2.6bn between January and March compared with net profit of $3.5bn in the first quarter of 2014, BP said in an earnings statement.
“We are resetting and rebalancing BP to meet the challenges of a possible period of sustained lower (oil) prices,” said BP chief executive Bob Dudley. “Our results today reflect both this weaker environment and the actions we are taking in response,” such as the selling of assets and heavy cost-cutting.
BP and its peers are slashing investment this year after tumbling oil prices bit into their profits. World oil prices lost as much as 60 percent of their value between June last year and March, largely owing to a surge in global reserves boosted by robust US production from shale rock.
BP said the average price of a barrel of Brent North Sea crude oil cost $54 in the first quarter compared with $108 one year earlier. BP said underlying replacement cost profit — a measure of earnings watched by the market — slumped 39 percent to $2.1bn.
Total profit falls
Paris: French oil giant Total announced a 20 percent fall in first quarter profits due to slumping oil prices and disruption of its activities because of violence in Yemen and Libya. Total said in a statement that profits for the first three months of the year dropped to $2.6bn from $3.3bn during the same period last year, on 30 percent lower sales of $42.3bn. The company said the profit slide amounted to 22 percent in adjusted terms compared to the first quarter of 2014. But it said that erosion was partially offset by a 10 percent hike in production to 2.4 million barrels per day, and capital gains realised on asset sales. Total Chairman Patrick Pouyanne said that the slackening profit was relatively moderate in a market where “the Brent price decreased by 50 percent compared to last year”. The adjusted net result also beat analysts’ forecasts of $2.1bn in profits. In addition to depressed global oil prices, Total said income was undermined by the closure of the LNG gas terminal in Yemen since April, due to continuing violence there. Total owns 40 percent of the installation. The French major also said violence in Libya had forced the group to cease all onshore activity in the country.
PetroChina plunges
Shanghai: Chinese energy giant PetroChina said its net profit plunged 82 percent year-on-year in the first three months of the year, blaming the plunge in international oil prices. Net profit came in at 6.15bn yuan ($1.01bn) in the first quarter, down from 34.25 billion yuan for the same period in 2014, the company said in a statement to the Hong Kong stock exchange, where it is listed. “In the first quarter of 2015, the world economy recovered slowly and geopolitics continued to be turbulent,” the company said, adding China’s economic growth slowed for the period. China’s economy expanded 7.0 percent year-on-year in the first three months of 2015, the worst showing for a single quarter since the first three months of 2009. It expanded 7.4 percent for all of last year, the slowest pace in nearly a quarter of a century. “International crude oil prices have significantly declined since the second half of 2014 and fluctuated at a low level in the first quarter of 2015,” PetroChina chairman Zhou Jiping said. The price of a barrel of oil has almost halved since June owing to a surge in supplies and a slump in demand. Turnover of PetroChina slumped 22.4 percent year-on-year to 410.34bn yuan in the first quarter, according to the statement.
Honda’s net slumps
Tokyo: Honda said that its fiscal-year net profit fell 8.9 percent to $4.4bn as Japan’s number three automaker grapples with soaring recall costs, including from an exploding airbag crisis linked to at least five deaths. The Civic maker downgraded its profit forecasts twice before the results were published Tuesday, as it warned the airbag scandal at supplier Takata would take a toll on its bottom line, as well as falling demand in Japan and the world’s biggest vehicle market, China. The company said it earned 522.7bn yen ($4.4bn) in the year through March while operating profit dropped 13 percent to 651.6bn yen. Annual sales rose 6.8 percent to 12.6 trillion yen. About 20 million vehicles produced by some of the world’s biggest automakers are being recalled due to the risk their Takata-made airbags could deploy with excessive explosive power, spraying potentially fatal shrapnel into the vehicle. Honda recalls account for about 13 million of that total.
Daimler up 89pc
Frankfurt: German auto group Daimler, maker of Mercedes-Benz, said yesterday it got off to a good start in 2015, with sales and profits rising strongly in the first three months. “We made a very good start to the year 2015 and continued along our successful path with record levels of unit sales, revenue and (operating profit) in the first quarter,” said chief executive Dieter Zetsche. In the period from January to March, net profit surged by 89 percent to $2.2bn. Looking ahead to the rest of the year, Daimler said it expects revenues to increase “significantly” in 2015.
StanChart down
Hong Kong: Asia-focused British bank Standard Chartered said its first-quarter profit fell more than 20 percent year-on-year, missing analysts’ expectations. Profit before tax for the three months ended March 31 fell 22 percent to $1.47bn from $1.88bn in the same period last year, the bank said in a filing to the Hong Kong stock exchange. “Trading conditions remain challenging and the actions we are taking to de-risk, cut costs and build capital are having an impact on near-term performance,” Group Chief Executive Peter Sands said in the filing. Sands said the bank’s underlying business volumes “generally remain strong”. Loan impairment increased 80 percent to $476m from $265m last year, while operating income for the period fell four percent year-on-year. Standard Chartered said in January it would axe 2,000 jobs around the world this year as it tries to make savings of $400m in a structural overhaul.
Pfizer sales hit
New York: US pharmaceutical giant Pfizer reported a slight rise in first-quarter profit but lowered its full-year forecast, citing a hit to sales from the stronger dollar. Pfizer said that recent changes in foreign exchange rates, primarily the dollar’s gains against the weakening euro, would impact foreign sales. It cut its 2015 full-year sales estimate to $44bn to $46bn. Adjusted earnings per share would be $1.95 to $2.05, five cents less than previously estimated, the company said, saying the lowered expectations were “solely” related to the forex impact. “Our update to these guidance components is solely due to recent negative changes in foreign exchange rates and does not reflect any unfavorable changes to our operational outlook for the year,” said Frank D’Amelio, chief financial officer. Pfizer posted net income of $2.376bn in the first three months of the year, 2 percent higher than in the same period in 2014. Revenue of $10.86bn was down 4.3 percent from a year ago, and missed analyst estimates of $10.72bn.
Philips net slides
The Hague: Dutch electronics giant Philips revealed a 27 percent overall first quarter plunge in net profits, including a drop in its key future focus area of healthcare technology. Philips said net profit slackened to ¤100m ($105m) on increased sales of ¤5.3bn during the first three months of the year compared with the first quarter of 2014. That 14 percent jump in turnover was fuelled by a 10 percent surge in sales by its consumer goods and lifestyle unit. But that advance slimmed to only two percent in comparable terms, once changes in business environment were factored in. Profitability in healthcare technology — which includes high-end equipment such as magnetic resonance scanners — declined by 84 percent, while representing 42 percent of overall sales. “Our investments, coupled with negative currency effects, are the main reasons for the low profitability in healthcare in the first quarter,” said Philips chairman Frans van Houten.
NEC profit jumps
Tokyo: Japan’s NEC said its fiscal-year net profit jumped nearly 70 percent, boosted by a weaker yen and growth in its public-sector infrastructure business. The information technology company said net profit for the year to March came in at 57.3bn yen ($480m), while operating profit rose about 21 percent to 128.1bn yen. Revenue slipped 3.5 percent to 2.9 trillion yen despite steady growth in its public-sector business, including the rollout of systems for field communication as well as radio systems for firefighters, as Tokyo pumps cash into updating Japan’s creaking infrastructure.
Santander jumps
Madrid: Spain’s Santander, the eurozone’s biggest bank, said its first quarter net profit jumped 32 percent as strengthening economic recovery in its home market boosted revenue. The bank reported a net profit of ¤1.72bn ($1.87bn) in the first three months of the year, up from ¤1.3bn during the same period last year, in line with analysts’ expectations. The bank’s net profit in Spain surged 42 percent in the first quarter to ¤357m.
Agencies
