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UK Energy Giant BP’s Profits Double To $27.7 Billion

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LONDON, England — On Tuesday, BP announced that it had made the most money ever in a single year. This added to calls for the UK government to raise taxes on companies that are making money off of the high prices of oil and natural gas because of Russia’s invasion of Ukraine.

BP, which has its headquarters in London, said that its underlying replacement cost profit, which does not include one-time items or changes in the value of inventories, went up from $12.8 billion in 2021 to $27.7 billion in 2022. BP earned $26.8 billion in 2008 when tensions in Iran and Nigeria drove global oil prices to a record of more than $147 per barrel.

BP also said it would buy back more shares from shareholders worth $2.75 billion and raise its quarterly dividend by 10%.

But public anger, especially in the country where the company is based, is likely to make the good news for BP shareholders less exciting. High oil and gas prices have hit Britain hard, with double-digit inflation fueling a wave of public-sector strikes, a surge in food bank use, and calls for politicians to expand a tax on energy companies‘ windfall profits to help pay for public services.

Ed Miliband, who is in charge of the environment for the opposition Labour Party, has asked the UK government to put a “proper” windfall tax on energy companies.

BP

BP Faces Critisism Over The Profit Margins

“Yet another day of huge profits at an energy giant, windfalls from war,” Miliband said.

Shell, based in London, received similar criticism last week after reporting that its annual earnings more than doubled to a record $39.9 billion.

Energy companies around the world are making a lot of money, which has led to calls for the fossil fuel industry to do more to help with high energy bills and reduce carbon emissions that hurt the environment. Last week, Exxon Mobil, which is based in the United States, said it made a record $55.7 billion.

Last year, Britain put a 25% windfall tax on earnings from oil and gas production in the country. In 2023, the tax will go up to 35%. Opposition leaders have chastised the government for allowing energy companies to reduce their tax liability by investing in the United Kingdom.

BP said it took a $1.8 billion charge last year to cover the new UK tax.

BP

The Company Had To Pay Lots Of Fees To Leave Russia

The company also had to pay $25.5 billion in fees because it decided to pull out of its investments in Russia after Russia invaded Ukraine.

After taking into account one-time costs and changes in the value of inventories, BP reported a net loss of $2.49 billion for 2022. This is a big change from the year before, when it made a net profit of $7.57 billion.

BP said on Tuesday that it would invest an extra $8 billion in its oil and gas businesses, as well as in clean energy, hydrogen, and charging stations for electric cars, through 2030.

The investments will increase oil and gas production to approximately 2 million barrels of oil equivalent per day by 2030. BP had planned to cut production by 40%, but the new goal is only 25% less than what was planned for 2019.

“We will prioritize projects where we can deliver quickly, at a low cost, and using our existing infrastructure, allowing us to minimize additional emissions while maximizing both value and our contribution to energy security and affordability,” said CEO Bernard Looney statement.

BP

Prices Of Oil Has Been Falling

Following the invasion of Ukraine, energy prices skyrocketed. Brent crude, a global oil price benchmark, averaged $101.32 per barrel last year, 43% higher than in 2021. The average wholesale price of natural gas in the United Kingdom increased by 76%.

Prices have been falling in recent months, with Brent crude averaging $88.87 per barrel in the fourth quarter.

“The question is, what will they do with record profits and operating cash flow? Governments are already questioning record profits from peer global energy companies,′′ according to Gianna Bern, author of “Investing in Energy: A Primer on the Economics of the Energy Industry.” “At a time when inflation and gas prices are both at record highs, energy companies around the world will have to rethink the cost and availability of energy for everyone.”

According to Alice Harrison, fossil fuels campaign leader at environmental advocacy nonprofit Global Witness, BP’s profits were made “on the back of three global crises” — the Ukraine war, the energy crisis, and climate breakdown.

“These massive profits will be a bitter pill to swallow for those in need,” Harrison said. “There’s no denying it: BP is richer because we’re poorer.”

SOURCE – (AP)

 

Business

Jacob Rothschild, Financier From A Family Banking Dynasty, Dies At 87

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LONDON ROTHSCHILD — his family announced that Jacob Rothschild, 87, a financier and philanthropist from the legendary Rothschild banking line, died on Monday.

Jacob began his career in 1963 at the family bank, NM Rothschild & Sons, before branching out to develop enterprises and charity organisations. His family paid tribute to him in a statement.

“Our father Jacob was a towering presence in many people’s lives, a superbly accomplished financier, a champion of the arts and culture, a devoted public servant, a passionate supporter of charitable causes in Israel and Jewish culture, a keen environmentalist and much-loved friend, father and grandfather,” a statement from his family stated.

rothschild

Jacob Rothschild, Financier From A Family Banking Dynasty, Dies At 87

“He will be buried in accordance with Jewish custom in a small family ceremony, and there will be a memorial at a later date to celebrate his life,” they continued, without revealing any other information.

According to last year’s Sunday Times Rich List, the Rothschild family is worth approximately 825 million pounds ($1 billion). It donates millions of pounds to Jewish interests, education, and art.

Former British Prime Minister Tony Blair was one of the political and cultural heavyweights who paid tribute to Rothschild. Blair lauded him as a “towering figure in Britain’s Jewish community” and praised his efforts to promote Middle East peace.

Jacob was born in Berkshire, west of London. He attended Eton College and studied history at Christ Church College, Oxford University.

rothschild

Jacob Rothschild, Financier From A Family Banking Dynasty, Dies At 87

After leaving the Rothschild Bank, he took over Rothschild Investment Trust, now RIT Capital Partners. He served as chairman of the business, one of the largest investment trusts on the London Stock Exchange, until 2019.

He also co-founded the then-J Rothschild Assurance Group, now St James’s Place, with Mark Weinberg in 1980 and served as deputy chairman of what was then BSkyB Television, among other duties.

In the cultural sector, he served as chairman of the National Gallery of London’s board of trustees and the National Lottery Heritage Fund.

rothschild

Jacob Rothschild, Financier From A Family Banking Dynasty, Dies At 87

The Rothschild Foundation, which manages the family’s former home, the country house Waddesdon Manor, announced that Jacob Rothschild’s daughter Hannah will follow him as chair.

Jacob was married to Serena for over 50 years until she died in 2019. They have four children (Hannah, Beth, Emily, and Nat) and several grandchildren.

SOURCE – (AP)

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In His Annual Letter, Warren Buffett Tells Investors To Ignore Wall Street Pundits

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OMAHA, Nebraska – Warren Buffett credited his longtime partner, the late Charlie Munger, with creating the Berkshire Hathaway conglomerate he is credited with leading, and warned shareholders in his annual letter on Saturday not to listen to Wall Street pundits or financial advisors who advise them to trade frequently.

Buffett said he always writes his letters with knowledgeable, long-term investors in mind, such as his sister Bertie, and attempts to give them what he believes they want to know about Berkshire.

“She is sensible – very sensible – instinctively knowing that pundits should always be ignored,” Buffett wrote about Bertie. “After all, if she could accurately forecast tomorrow’s winners, would she openly share her unique insights, increasing competitive buying? That would be like discovering gold and then throwing out a map to the neighbours indicating its whereabouts.”

Buffett told investors that Berkshire is a safe place to park their money as long as they don’t expect “eye-popping performance” like in the past because there are no attractively priced acquisition targets large enough to make a meaningful difference in the Omaha, Nebraska-based company’s results. However, he stated that Berkshire would be ready to invest $167.6 billion when the casino-like stock market seizes.

Munger, Buffett’s longtime investing partner, died in November at the age of 99, removing one of the key sounding boards Buffett relied on for decades as Berkshire acquired companies such as See’s Candy, Geico Insurance, BNSF Railway and others to reshape the failing textile mill they took over in the 1960s into the massive eclectic conglomerate Berkshire is today.

buffett

In His Annual Letter, Warren Buffett Tells Investors To Ignore Wall Street Pundits

Buffett devoted a portion of last year’s annual letter to Berkshire shareholders to an homage to Munger, but this year’s edition began with even more appreciation for the revered curmudgeon’s services to the company over the years. Buffett stated that “Charlie was the ‘architect’ of the present Berkshire”, who recognised early on that buying excellent enterprises at reasonable rates was preferable.

“Charlie never sought to take credit for his role as creator but instead let me take the bows and receive the accolades,” Buffett said in a statement. “In some ways, his connection with me was like that of an elder brother and a caring father. Even when he knew he was correct, he handed me the reins, and when I made a mistake, he never reminded me of it.”

buffett

In His Annual Letter, Warren Buffett Tells Investors To Ignore Wall Street Pundits

Buffett also discussed how Berkshire’s insurance businesses, such as Geico, excelled last year, but its enormous utilities and BNSF railway underperformed. He also informed shareholders that he has no plans to sell its shares in approximately 30% of Occidental Petroleum and 9% of five significant Japanese trading companies but that he has yet to buy the oil company completely.

Berkshire’s diverse portfolio of operations and the good performance of its investments generated a profit of $37.57 billion, or $26,043 per Class A share, in the fourth quarter. This is more than double Berkshire’s $18.08 billion profit, or $12,355 per Class A share, posted a year ago.

However, Buffett emphasised that investors should mainly overlook such bottom-line figures since the paper worth of its stocks heavily influences them. Instead, he has always encouraged investors to focus on Berkshire’s operating earnings, which exclude investments.

By that metric, Berkshire reported a 28% increase in operating earnings to $8.48 billion, or $5,878.21 per Class A share. This is up from $6.63 billion, or $4,527.06 per Class A share.

buffett

In His Annual Letter, Warren Buffett Tells Investors To Ignore Wall Street Pundits

FactSet Research questioned three analysts, and they expected that Berkshire would report quarterly operating earnings of $5,717,17 per Class A share.

Berkshire’s stock has established several new peaks in recent weeks, reaching $632,820 per Class A share Friday morning as investors eagerly awaited Buffett’s letter. Buffett is admired for his extremely successful track record and the wise advice he has given over the years. His yearly letter is consistently one of the most-read papers in the corporate sector.

Berkshire also repurchased $2.2 billion of its stock in the fourth quarter, bringing the total to $9.2 billion for the year.

SOURCE – (AP)

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Toyota Recalls 280,000 Vehicles Because They May ‘Creep Forward’ In Neutral

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Toyota recalled approximately 280,000 pickups and SUVs in the United States because the engine may not fully disengage while in neutral.

“Certain parts of the gearbox may not immediately disengage when the vehicle is shifted to the neutral position,” the Japanese automaker stated on Wednesday. It said this allows some engine power to continue going through to the wheels.

As a result, the vehicle may “inadvertently creep forward at a low speed when it is on a flat surface and no brakes are applied, leading to an increased risk of a crash,” according to the manufacturer.

toyota

Toyota Recalls 280,000 Vehicles Because They May ‘Creep Forward’ In Neutral

Certain Toyota Tundra, Sequoia, and Lexus LX 600 cars made between 2022 and 2024 are being recalled. Lexus is Toyota’s luxury brand.

Toyota said it will notify owners of recalled vehicles in late April and update the gearbox software.

The business stated that the recall is one of three in the United States on Wednesday.

Toyota announced the recall of an additional 19,000 vehicles due to a software issue: “the rearview image may not display within the period of time required by certain US safety regulations after the driver shifts the vehicle into reverse, increasing the risk of a crash while backing the vehicle.”

toyota

Toyota Recalls 280,000 Vehicles Because They May ‘Creep Forward’ In Neutral

It noted that the safety recall applies to select Mirai and Lexus LS, LC, and ES models manufactured in North America between 2023 and 2024.

Additionally, about 4,000 Toyota Camry and Camry Hybrid vehicles are being recalled due to safety concerns with the head restraints on rear fold-down seats, which “increase the risk of injury during certain collisions.”

Toyota is the world’s largest carmaker by sales, yet it risks becoming embroiled in safety controversies.

In December, it recalled approximately 1 million cars and SUVs in the United States owing to a potential fault that might cause the passenger airbag to fail to deploy in a crash.

toyota

Toyota Recalls 280,000 Vehicles Because They May ‘Creep Forward’ In Neutral

The recall affected 15 Lexus cars from 2020 to 2021, including the Camry, Rav4, Sienna, RX350, and ES350.

After admitting to forging safety test results for more than 30 years, Daihatsu, a small Japanese automaker under Toyota ownership, stopped domestic production late last year.

SOURCE – (CNN)

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