It is not a secret that companies suffered serious losses due to the coronavirus pandemic. The energy giant BP is not an exception. Importantly, the U.K-based energy giant lost billions of dollars. The energy giant reported a significant loss for the second quarter, after downgrading the value of some of its assets on expectations of lower commodity prices. BP posted a $7.6 billion quarterly loss.
For example, in the first quarter of the year, the company reported a net profit of $800 million.
The energy giant also made an important announcement. According to this announcement, it had halved its dividend to 5.25 cents per share per quarter. Consequently, compared to the first quarter of 2020, dividend fell from 10.5 cents per share to 5.25 cents.
Importantly, the reported loss for the quarter reached $16.8 billion. People should take into consideration that; the result includes a post-tax charge of $10.9 billion for non-operating items.
This is not the end of the story, as the breakdown of this figure also includes $9.2 billion in impairments across the group, largely due to the company’s revised forecast regarding the oil and gas prices over the next 30 years. Furthermore, it also includes $1.7 billion of exploration write-offs.
BP and plans for the future
Based on the information provided by the energy giant, oil prices and demand were challenging and uncertain. Also, the coronavirus pandemic could create additional pressure on the global economy for a prolonged period of time.
It makes sense, as of April the price turned negative for the first time in history. In reaction to this, the company decided to reduce the number of employees. Consequently, thousands of people will lose their jobs.
Notably, the company plans to become a net-zero-carbon company by 2050 or sooner. Moreover, within 10 years, BP plans to raise its low carbon investment to around $5 billion a year.