BP pays divdend despite $4.9bn loss
- 1 February 2011
BP is resuming paying a dividend to shareholders sweetening the news that it has posted a $4.9bn (£3.1bn) loss for 2010 reported here on Bloomberg . It is the company's first loss since 1992.
Shares fell slightly in early trading. Analysts had been hoping for better quarterly figures with profits of $4.36bn missing expectations of $4.99bn. The firm also added $1bn to the expected $40bn total cost of the Gulf of Mexico oil spill.
The firm is selling three US refineries as part of plans to slim down the company with chief executive Bob Dudley saying: "The BP of the future will be a smaller BP. But it will also be a safer BP, a more agile BP and a stronger BP."
The dividend which is to be paid for the last three months of 2010, was suspended in June which means investors missed out on a dividend in the first three quarters of last year.
BP recently announced an $8bn share swap with OAO Rosneft giving it access to potential Russian Arctic oil reserves but it is facing a challenge from its current Russian partners in its TNK-BP joint venture.
This group, which is seeking an injunction against the deal in the courts, has blocked the payment of the joint venture's $1.8bn dividend.
The overall dividend will be 7 cents a share or 4.36p, half the pre oil spill level of 14 cents or 8.72p.
The Guardian notes the importance of the dividend to UK investors here .
Prior to the crisis, BP was an important share in funds and portfolios set up to pay an income to UK investors particularly pensioners.
The Guardian comment boards are cynical about the move.
SchwarzeSchafe writes: "Ah, as long as shareholders get their dividends, it's all fine then. Now please Wikipedia fellows, Business and Economics professors, you need to re-write your definition of a Dividend, from the now-outdated "portion of corporate profits paid out to stockholders" to the more current reality of "sum paid to shareholders under any circumstance, regardless of the company's profitability, at the expense of employees, the States and other stakeholders."
SEE ALSO: Brighter future for UK equity income .
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