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BG sees earnings rise

by on October 31, 2012 9:33 am GMT
 

The company’s net profit for the three month period to 30 September totaled $1.33 billion,compared to $1.08 billion, during the third quarter last year.

The rise in earnings coincided with a 4% year-on-year rise in revenue, from nearly $5.40 billion to almost $5.59 billion during the quarter.

Driving the stronger performance during the third quarter of this year was a 13% rise in the total operating profit of the exploration and production segment to $1.33 billion.

The segment also posted a 14% rise in revenue, compared to the third quarter of 2011, to $2.86 billion, with the benefit of a rise gas prices and a 5% jump in output.

BG produced 59.4 million barrels of oil equivalent during the third quarter, compared to 56.8 million boe during the same period last year.

However, BG chief executive Frank Chapman noted that output during the quarter had been curtailed by the shutdown of the non-operated Elgin/Franklin field and the decision to scale back drilling in the US due to low natural gas prices.

As a result the company said it expected 2012 production to only grow by about 3%, while it added 2013 output was expected to be in line with this year.

The news of the lower production forecast casted a shadow over the positive result as the company’s share price fell in early trading on Wednesday.

Despite the gloomy production forecast Chapman was confident the start-up of projects in Australia and Brazil would see the company’s profits continue to grow.

“These projects will deliver unit earnings substantially higher than the current group average, which alongside the growing contribution from the expanding LNG (liquefied natural gas) business, will result in group earnings growing considerably faster than upstream production,” he said.

The company’s LNG business posted a 24% rise in total operating profit, to $767 million, due to a25% increase in shipping and marketing operating profit.

This helped offset the 8% decline in revenue from the segment which generated $2.05 billion during the quarter, down from nearly $2.24 billion a year earlier.