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| BP halves dividend after suffering huge losses | |
| (about 3 hours later) | |
| BP has halved its shareholder dividend and posted a $6.7bn quarterly loss after the coronavirus pandemic hit global demand for oil. | |
| The dividend news is another blow for pension funds and private investors who have seen a string of firms cut or halt payouts. | The dividend news is another blow for pension funds and private investors who have seen a string of firms cut or halt payouts. |
| The loss was largely due to BP writing down the value of its assets after it cut its oil price forecasts. | The loss was largely due to BP writing down the value of its assets after it cut its oil price forecasts. |
| BP said the outlook for oil prices and demand was "challenging and uncertain". | BP said the outlook for oil prices and demand was "challenging and uncertain". |
| It also warned that the pandemic could weigh on the global economy for a "sustained period". | It also warned that the pandemic could weigh on the global economy for a "sustained period". |
| In the short-term, BP said it expected demand for oil could be up to nine million barrels per day lower compared to last year. | In the short-term, BP said it expected demand for oil could be up to nine million barrels per day lower compared to last year. |
| It has already announced it will cut 10,000 jobs, with as many as 2,000 set to be lost in the UK. | It has already announced it will cut 10,000 jobs, with as many as 2,000 set to be lost in the UK. |
| Oil prices have plunged after the coronavirus virtually shut down major economies. | Oil prices have plunged after the coronavirus virtually shut down major economies. |
| In April, the price turned negative for the first time in history, meaning producers had to pay buyers to take oil off their hands over fear storage capacity could run out. | In April, the price turned negative for the first time in history, meaning producers had to pay buyers to take oil off their hands over fear storage capacity could run out. |
| BP's loss for the three months to June compares to a $2.8bn profit in the same period last year. | BP's loss for the three months to June compares to a $2.8bn profit in the same period last year. |
| The oil giant said its dividend would halve to 5.25 cents a share, compared to 10.5 cents in the first quarter. | The oil giant said its dividend would halve to 5.25 cents a share, compared to 10.5 cents in the first quarter. |
| It follows a similar, earlier move by rival Royal Dutch Shell which cut its first quarter dividend in April - the first reduction to its shareholder payment since the Second World War. | It follows a similar, earlier move by rival Royal Dutch Shell which cut its first quarter dividend in April - the first reduction to its shareholder payment since the Second World War. |
| Yet another divi disappointment | Yet another divi disappointment |
| By Simon Read, personal finance reporter | By Simon Read, personal finance reporter |
| The dividend blows for investors and retirement savers just keep on coming. | The dividend blows for investors and retirement savers just keep on coming. |
| After Shell cut its dividend for the first time since World War II and Britain's banks suspended their payouts, BP has now halved its dividend - its first cut for more than a decade. | After Shell cut its dividend for the first time since World War II and Britain's banks suspended their payouts, BP has now halved its dividend - its first cut for more than a decade. |
| That is a particularly hard blow for UK pension funds and the army of pensioner investors who rely on the payouts. | That is a particularly hard blow for UK pension funds and the army of pensioner investors who rely on the payouts. |
| BP traditionally generates the largest dividend payment among the big blue chip FTSE 100 giants. | BP traditionally generates the largest dividend payment among the big blue chip FTSE 100 giants. |
| Dividend watchers now reckon the total amount of payouts by British firms will fall by two-fifths in 2020. | Dividend watchers now reckon the total amount of payouts by British firms will fall by two-fifths in 2020. |
| Link Group's Dividend Monitor shows that dividends fell by a 57% in the second quarter of the year as 176 companies cancelled payouts and 30 more have cut them. | Link Group's Dividend Monitor shows that dividends fell by a 57% in the second quarter of the year as 176 companies cancelled payouts and 30 more have cut them. |
| That's not disastrous for investors, but it will be painful. | That's not disastrous for investors, but it will be painful. |
| Despite BP's loss and a lower dividend, the company's share price rose by 6.26% to 298.6p as it announced a new strategy. | Despite BP's loss and a lower dividend, the company's share price rose by 6.26% to 298.6p as it announced a new strategy. |
| BP said it wanted to "pivot" from being a traditional oil company to an "integrated energy company" and said it expects to achieve "net zero" carbon emissions for the company by 2050. | BP said it wanted to "pivot" from being a traditional oil company to an "integrated energy company" and said it expects to achieve "net zero" carbon emissions for the company by 2050. |
| Over the next decade, BP forecasts that oil and gas production will fall by at least one million barrels of oil a day, or 40% compared to 2019. | Over the next decade, BP forecasts that oil and gas production will fall by at least one million barrels of oil a day, or 40% compared to 2019. |
| It plans to invest in renewables, bioenergy and as well as hydrogen and carbon capture and storage technology. | It plans to invest in renewables, bioenergy and as well as hydrogen and carbon capture and storage technology. |
| Bernard Looney, who took over as BP chief executive in February, said: "This coming decade is critical for the world in the fight against climate change, and to drive the necessary change in global energy systems will require action from everyone." | Bernard Looney, who took over as BP chief executive in February, said: "This coming decade is critical for the world in the fight against climate change, and to drive the necessary change in global energy systems will require action from everyone." |