In recent months BP’s quarterly results have sparked a nationwide conversation about the profits energy companies are making from high energy prices. Now lower commodity prices have reduced BP’s first quarter profits from record highs, hitting their cash flow and consequentially the size of their share buybacks, but the oil major still beat analysts expectations on the bottomline. Its peer Shell Plc is expected to report results on Thursday.
(Bloomberg) — In recent months BP’s quarterly results have sparked a nationwide conversation about the profits energy companies are making from high energy prices. Now lower commodity prices have reduced BP’s first quarter profits from record highs, hitting their cash flow and consequentially the size of their share buybacks, but the oil major still beat analysts expectations on the bottomline. Its peer Shell Plc is expected to report results on Thursday.
Here’s the key business news from London this morning:
In The City
BP Plc: The energy giant slowed the pace of share buybacks after reporting a drop in first-quarter profit. BP said the figures reflected an “exceptional” performance in gas marketing and “very strong” results from oil trading. That offset the impact of lower energy prices and refining margins.
- The company will buyback $1.75 billion of shares prior to announcing second-quarter results
- Adjusted net income was $4.96 billion in the first quarter, down from $6.25 billion a year earlier, and beating the average analyst estimate
HSBC Holdings Plc: The Asian-focused lender said it will buy back as much as $2 billion of shares after reporting first-quarter results that beat estimates. As the biggest bank in Hong Kong, HSBC is expected to benefit from increased wealth flows after China dropped its strict pursuit of Covid zero.
- Later this week, HSBC directors face investors at the lender’s annual meeting, with two shareholder-proposed resolutions calling for the bank to report regularly on its Asian business, as well as asking it to lift its dividend to its pre-pandemic level
Superdry Plc: The high street fashion brand is in talks for equity fundraising that would include significant participation from the company’s founder Julian Dunkerton.
- The brand is in talks with investors on raising funds using about 20% of its issued share capital
De La Rue Plc: The passport maker appointed Nick Bray as interim chairman after Kevin Loosemore resigned amid investor pressure.
In Westminster
The extra bank holiday for King Charles III’s coronation is set to drag down what otherwise may be gathering momentum in the UK economy. Forecasters warned that the additional day off on Monday will help trigger a 0.7% slide in GDP in May and could tip the economy into a minor contraction in the second quarter.
Meanwhile, heavy discounting on clothing and furniture pulled down UK shop price growth for the first time in 2023, a sign that households may be past the worst of an inflation shock.
In Case You Missed It
Britain’s acute housing shortage, snarled planning departments and local protectionism are combining to divide a nation where homeownership was once seen as a right of passage.
Arm Ltd., the British chip designer owned by SoftBank Group Corp., said over the weekend it had confidentially submitted a draft registration statement to the US Securities and Exchange Commission for its initial public offering. SoftBank founder Masayoshi Son has made Arm’s debut a strategic focus after his Vision Fund’s startup investments led to substantial losses.
Looking Ahead
We’ll get updates from consumer-health company Haleon Plc, gambling firm Flutter Entertainment Plc and Lloyds Banking Group Plc tomorrow.
Lloyds, Britain’s biggest mortgage lender, faces a headwind from increasing competition in the sector. The higher rates which the bank has to pay for deposits are another drag, says Bloomberg Intelligence’s Tomasz Noetzel. Still, the prospect of the Bank of England potentially raising rates further above Lloyd’s forecast of 4% this year could help bolster the lender’s bottom-line, according to the analyst.
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