If you ever wondered what performing while transforming looks like – it’s our latest quarterly results, released this morning. Strong underlying profits of $2.6 billion – strong operating cash flow of $6.1 billion – and really strong progress on our strategy.
Yes, higher oil prices and refining margins helped. But this is much more about you and how you are performing. As a team we are really on it – motivated, focused and executing with discipline.
That has helped us to a strong cash inflow number last quarter – $11 billion in total, including $4.8 billion from divestments, helped by some proceeds coming in earlier than anticipated. As a result, we have been able to get our net debt down from over $51 billion a year ago to around $33 billon – well below our $35 billion target. That allows us to move to a new phase of our financial plan – using some of the surplus cash for share buybacks. We think our dividend plus buybacks equals a really attractive proposition for investors – and don’t forget, that includes all of you!
It’s not all good news at the moment, though. While vaccines are rolling out around the world and economies are picking up, that’s not the case everywhere. The pandemic is currently raging in places, particularly India and Brazil. I am hearing awful news daily from colleagues and my heart goes out to them. COVID-19 is still a danger – and a major threat in places – so please follow your latest local guidelines.
We have also had a mixed start to the year on safety. Fewer people have been hurt at work, but we had 23 Tier 1 and Tier 2 process safety incidents. Our goal is to eliminate Tier 1 events, so this shows us we still have quite a bit of work to do. We know that an accident can destroy life and destroy our company. And we know that many of us are settling into new roles and there has been a lot of change. So as you execute your work, please be totally focused on the quality of risk assessments and toolbox talks, as well as on compliance. And please raise your hand if you are ever uncomfortable – we will listen.
Reminder – we said back in February that this year we want everyone to focus on collaboration towards our shared purpose and goals, which is why company performance is the only factor for 2021 bonuses. After the first quarter, the scorecard overall is tracking just about on plan. That reflects the strong financial performance, partly offset by safety performance and some operational issues.
Take a moment as well to check out the link to bp.com for more on the fantastic strategic progress I mentioned above:
This has been a great quarter – no question. It shows that we can deliver financial returns for our investors while at the same time – step by step – transitioning bp. It’s the definition of ‘performing while transforming’. I know it’s not easy. It requires constant focus and discipline. But I do believe it’s worth it. And as the situation in the world improves – and it will – it will get that little bit easier.
A great science company called DSM talks about being purpose-led and performance-driven. I love that line because it describes exactly how I think about bp. Purpose and performance together is a very powerful combination – it’s not an either-or. And you showed that this quarter. Now on to the next one.
Thank you for everything you do. And, as ever, let me know if you have any feedback.
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