Rise in BP’s profits in times of energy crisis; SoftBank’s sale of Arm chip group to Nvidia collapses – business live | Business
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BP has reported a surge in profits as the oil giant benefits from rising oil and gas prices fueling the cost of living crisis.
BP made an underlying replacement cost (RC) profit, its preferred revenue measure, of $4.065bn (£3bn) in the last three months of 2021 alone, down from $3.322bn in July-September.
It is almost 35 times the $115 million RC profit that BP reported in the fourth quarter of 2020, when the pandemic hit energy demand.
BP says its underlying replacement cost profit improved due to higher oil and gas prices and refining margins and better business results.
For the full year, BP made underlying profits of $12.8bn, or £9.5bn, after rebounding from a $5.7bn loss in 2020 (when the pandemic hit demand and wrote off billions in assets).
Profit attributable to bp shareholders was $7.565 billion for 2021, compared to a loss of $20.3 billion in 2020.
BP’s findings are sure to intensify calls for energy companies to face windfall taxes to cover the impact of rising energy bills on households.
last november, Bernard Looney, BP The CEO described the company as a “cash machine” after soaring oil and gas prices boosted profits.
This morning, looney said:
2021 shows bp doing what we said it would do – performing while transforming.
We have strengthened the balance sheet and increased returns. We are distributing distributions to shareholders with $4.15 billion in redemptions announced and the dividend has increased.
And we are investing for the future. We have made great strides in our transformation into an integrated energy company: concentrating and leveraging our hydrocarbons business, developing convenience and mobility, and disciplinedly building a low-carbon energy business. carbon – with now more than 5 GW of offshore wind projects – and significant opportunities in hydrogen.
These high energy prices mean that UK households will face a record energy bill rise of 54% from April after the regulator lifted the cap on default tariffs to £1,971.
Later this morning, members of the Business, Energy and Industrial Strategy Committee (BEIS) will ask Jonathan Brearley, CEO of regulator Ofgem, about the energy price cap and its impact on household energy bills.
The other big news this morning is that SoftBank’s sale of UK-based chip designer Arm to Nvidia has collapsed, after regulators in the UK, US and Europe raised serious concerns that the “biggest semiconductor chip merger in history” would hurt competition.
Both parties have agreed to terminate the agreement due to “significant regulatory difficulties preventing the completion of the transaction, despite the parties’ good faith efforts,” SoftBank said in a statement (by Bloomberg).
Softbank is now aiming to float Cambridge-based Arm on a stock market.
The failure of the deal is a major setback for the Japanese conglomerate’s efforts to generate funds, at a time when its portfolio valuations are under pressure.
Arm also announced that Rene Haas, head of the company’s intellectual property unit, would become its chief executive, succeeding Simon Segars.
Masayoshi Son, Chairman and CEO of SoftBank Group Corp, said in a statement:
“Rene is the right leader to accelerate Arm’s growth as the company seeks to re-enter the public markets.”
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