The coronavirus pandemic continues to dominate the headlines and it is not surprising as the pandemic created tons of problems for the companies around the world. It is worth mentioning that, BP reported a significant loss for the second quarter on August 4. The company downgraded the value of some of its assets on expectations of lower commodity prices. As a result, the energy giant reported a significant loss for the quarter.
Importantly, the company posted a $7.6 billion quarterly loss. As a reminder, in the first quarter of the year, the company reported a net profit of $800 million.
The energy giant also announced that it had halved its dividend to 5.25 cents per share per quarter. As a result, compared to the first quarter of this year, dividend fell from 10.5 cents per share to 5.25 cents.
Notably, the reported loss for the quarter reached $16.8 billion. This result includes a post-tax charge of $10.9 billion for non-operating items. For example, in the first quarter, this number was much lower.
Furthermore, the breakdown of this figure also includes $9.2 billion in impairments across the group, largely due to the company’s revised forecast for oil and gas prices over the next 30 years. Moreover, it also includes $1.7 billion of exploration write-offs.
BP and coronavirus pandemic
According to BP, oil prices as well as demand was challenging and uncertain. Moreover, the coronavirus pandemic could create additional pressure on the global economy for a sustained period.
Importantly, shares of energy giant fell by more than 40% year-to-date.
As a reminder, in April the price turned negative for the first time in history. The company made the decision to reduce the number of employees. As a result, thousands of people will lose their jobs.
Last but not least, BP wants to become a net-zero-carbon company by 2050 or sooner. The company plans to spend billions of dollars to achieve this goal.