May 1, 2018
BP can afford more dividend largesse with fewer calls on its cash
BP - like its chief executive and new chairman - might have lots of cash, but there are lots of calls on that cash, as well. Although a $67 oil price lifted underlying profit by 73 per cent, to $2.6bn, and cash from operations was 9 per cent higher, ongoing payments for the Deepwater Horizon oil spill amounted to $1.6bn in the first quarter alone. As a result, earnings per share for the quarter came in at $0.124, barely covering the $0.10 dividend - and analysts noted that cash flow after tax and capex was below the $1.8bn cost of the payout. perhaps unlike its CEO, new chairman and larger shareholders - BP can envisage a time when there are fewer calls on its cash. The prospect of rising cash flows led chief financial officer Brian Gilvary to hint at a first dividend increase in four years.
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