Fuel prices are shown at a Shell petrol station, in Windsor, Britain on April 21, 2020. (Photo by Tim Ireland/Xinhua)
LONDON, April 28 (Xinhua) -- British oil giant BP on Tuesday reported a profit plummet in the first quarter (Q1) of 2020 as the industry was significantly hit by unprecedented supply and demand disruptions amid the coronavirus outbreak worldwide.
The company's financial reports showed the underlying replacement cost profit -- its definition for net income -- dropped to 0.8 billion U.S. dollars for Q1, far lower than 2.4 billion dollars for the same period a year earlier.
"The result reflected lower prices, demand destruction in the Downstream particularly in March, a lower estimated result from Rosneft and a lower contribution from oil trading," said BP.
The company's net debt at the end of the quarter was 51.4 billion dollars, 6.0 billion dollars higher than a quarter earlier, according to its financial reports.
"This extraordinary time for the world demands extraordinary responses," said Bernard Looney, chief executive officer of BP.
"Our industry has been hit by supply and demand shocks on a scale never seen before," said Looney, adding that "we are taking decisive actions to strengthen our finances -- reinforcing liquidity, rapidly reducing spending and costs, driving our cash balance point lower."
At the end of the quarter, BP had around 32 billion dollars of liquidity available, according to the firm.
Brian Gilvary, chief financial officer of BP, said "We are dealing with an exceptionally challenging environment, and the unprecedented effects of demand destruction and price impacts that can be seen in these results are expected to continue through the second quarter."
"We have developed a clear plan and are confident in increasing resilience in our financial framework through a set of interventions focused on building liquidity, strengthening our balance sheet and reducing expenditure to drive our cash balance point below 35 dollars per barrel in 2021," added Gilvary.
Headquartered in London, BP is a multinational oil and gas company, with over 70,000 employees operating in around 80 countries worldwide. Enditem
