A BP company logo at a gas station in London, U.K.
Chris Ratcliffe | Bloomberg | Getty Images
Energy giant BP reported a significant loss for the second quarter after downgrading the value of some of its assets on expectations of lower commodity prices.
Second-quarter underlying replacement cost profit, used as a proxy for net profit, came in at a loss of $6.7 billion, meeting analyst expectations. That compared with net profit of $2.8 million for the same period a year earlier.
The U.K.-based oil and gas company said last month that it could incur non-cash impairment charges and write-offs in the second quarter, estimating an aggregate range of $13 billion to $17.5 billion after tax. At the time, BP said the “enduring” impact of the coronavirus pandemic had prompted the firm to lower its oil and price forecasts through to 2050.
Shares of BP are down more than 40% year-to-date.
Analysts had anticipated that “Big Oil” companies, referring to the world’s largest energy majors, were likely to report “horrendous” second-quarter results as coronavirus lockdown measures coincided with an unparalleled demand shock and significantly weaker oil and gas prices.
However, some companies have been able to limit the damage as their trading divisions have capitalized on heightened market volatility.