BP(US:BP)2024-05-07 16:10Financial Performance - The company reported a first quarter adjusted EBITDA of $10.3 billion and underlying earnings of $2.7 billion, demonstrating resilient financial performance despite an unplanned outage at the Whiting refinery [5][6]. - Operating cash flow for the quarter was $7.4 billion, adjusted for expected seasonal working capital build [6]. Business Line Performance - The company made strategic progress with the safe start-up of the Azeri Central lease project and the online launch of Checkmate, its third central processing facility [6]. - In biogas, Archaea brought online its largest modular RNG plant and has five more in commissioning [6]. Market Performance - The company announced a 42.5% firm-in into an exploration block in the Orange basin offshore Namibia, indicating expansion in its market presence [7]. Company Strategy and Industry Competition - The company aims to deliver at least $2 billion in cash cost savings by the end of 2026, focusing on simplifying operations and removing complexity [7]. - The management emphasized a countercyclical approach to acquisitions, indicating a focus on strategic growth during low price periods [31][32]. Management Commentary on Operating Environment and Future Outlook - Management acknowledged challenges in the macroeconomic environment, particularly in the U.S. freight sector, which has impacted business performance [11][16]. - The company remains confident in achieving its 2025 EBITDA targets of $3 billion to $4 billion from transition growth engines, driven by growth in various segments including EV and hydrogen [13][16]. Other Important Information - The company is focusing on digital transformation to drive efficiencies, including the use of AI to reduce coding needs and improve operational efficiency [73][76]. - The company is also looking to optimize its supply chain through alliances with partners to eliminate waste and improve cost efficiency [76]. Q&A Session Summary Question: Concerns about 2025 EBITDA targets - Management acknowledged skepticism in the market regarding the 2025 EBITDA targets but highlighted strong operational momentum and growth in transition engines as key drivers [11][16]. Question: Lessons learned from Whiting refinery outage - Management stated it is too early to draw lessons from the outage, but the team is currently reviewing the incident to improve future operations [12]. Question: Cost-cutting measures and benchmarking against peers - Management discussed the challenges of comparing costs across companies due to different accounting practices and emphasized their focus on cash costs and efficiency improvements [21][22]. Question: Dividend growth expectations - Management indicated that the Board will consider various factors for dividend growth, including share count reduction and overall business performance [86][87]. Question: Update on low-carbon and trading businesses - Management confirmed that low-carbon trading is included in overall trading numbers but will not be broken out further beyond existing disclosures [112]. Question: Update on the Permian operations - Management reported that the third central gathering process is now online, increasing capacity and improving productivity in the Permian region [103][104].