Q2 2026 BP PLC Earnings Call Transcript
Key Points
- BP PLC (BP) delivered a strong second quarter with underlying profit of $5.7 billion, up 78% from the first quarter, and operating cash flow of $10.9 billion.
- The company reduced financial obligations by around $7 billion in the quarter, bringing net debt down to $22.3 billion and on track to meet its $14-18 billion net debt target ahead of plan.
- BP PLC (BP) announced a 4% increase in the dividend per share, reflecting confidence in its cash generation and commitment to shareholder returns.
- The integrated model, supported by a world-class trading organization, delivered an average uplift of around 4 percentage points to return on capital employed over the last six years, demonstrating resilience and value creation.
- Management is taking decisive action to simplify and high-grade the portfolio, including plans to market Archaea Energy and the North Sea business, and exiting Badenoord, to focus on higher-return assets.
- The company is making progress on structural cost reductions, having delivered $3.5 billion in savings since the start of the program, with further opportunities identified in supply chain and organizational simplification.
- BP PLC (BP) reported a tragic fatality at its Castrol blending plant in Turkiye, and an increase in process safety events, including Tier 1 events, in the first half of 2026.
- Upstream production fell 6% quarter-over-quarter to 2.2 million barrels of oil equivalent per day, impacted by seasonal maintenance, Middle East disruptions, and operational issues in the North Sea and Indonesia.
- Underlying operating expenditure is not declining fast enough, with benefits from cost reductions not yet sufficiently visible in earnings and cash flow due to inflation and complexity.
- The company recorded net adverse adjusting items of around $1.1 billion, including post-tax impairments of approximately $800 million, primarily related to transition businesses.
- Working capital built by $1 billion in the quarter, with a first-half build of $7 billion, and the timing of the unwind remains uncertain depending on the Middle East situation.
- BP PLC (BP) acknowledged that past performance has not met expectations, with too much shareholder value written off and a portfolio that is too stretched and complex, leading to insufficient resilience in low-price environments.
Hello everyone and thank you for your interest in BP's second quarter 2026 results. Today's video presentation features Meg O'Neill, Chief Executive Officer and Kate Thompson, Chief Financial Officer.
The running order for today's prepared remarks is as follows. Meg will begin with her reflections since becoming CEO and the priorities she is setting for BP. Kate will then take you through our second quarter financial performance and Meg will return to close with her perspective on the path ahead.
Let me first draw your attention to our cautionary statement. In this video, we will make forward-looking statements that refer to our estimates, plans and expectations. Actual results and outcomes could differ materially due to the factors we note on this slide and in our UK and SEC filings. Please refer to our annual report, stock exchange announcement and SEC filings for more details. These documents are available on our website.
And with that, over to you, Meg.
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