BP (BP) Q4 2025 earnings summary

Executive summary

• Achieved strong operational and underlying financial performance in 2025, with underlying replacement cost profit of $7.5 billion and record-high upstream plant reliability and refining availability, despite a weaker oil price environment.

• Operating cash flow reached $24.5 billion, including a $2.9 billion working capital build, and net debt was reduced to $22.2 billion by year-end.

• Implemented a reset strategy, delivering on turnaround plans and increasing adjusted free cash flow by 55% on a price-adjusted basis.

• Shareholder distributions were about 30% of operating cash flow, with share buybacks suspended and excess cash allocated to balance sheet strengthening.

• Completed and announced over $11 billion in divestments, including a $6 billion Castrol transaction, progressing toward a $20 billion disposal target.

Financial highlights

• 2025 underlying replacement cost profit was $7.5 billion, down from $8.9 billion in 2024; operating cash flow reached $24.5 billion, including a $2.9 billion adjusted working capital build.

• Organic CapEx reduced to $13.6 billion, a 10% decrease from 2024; capital expenditure for the year was $14.5 billion.

• Net debt at year-end was $22.2 billion, $800 million lower than 2024, with $1.2 billion in perpetual hybrid bonds redeemed and $1.2 billion in pre-tax Gulf of America settlement payments.

• Fourth quarter group underlying replacement cost profit before interest and tax was $4.4 billion; IFRS loss for the quarter was $3.4 billion due to $4 billion in after-tax impairments.

• Adjusted free cash flow for FY25 was $8 billion, and group ROACE was about 14%.

Outlook and guidance

• First quarter 2026 upstream production expected to be broadly flat; Customers segment to see seasonally lower volumes; Products segment to face lower refining margins.

• Full year 2026 upstream production expected to be slightly lower, with underlying production broadly flat; Oil Production & Operations flat, gas and low carbon energy lower.

• Capital expenditure for 2026 expected at $13 billion-$13.5 billion, weighted to the first half; divestment proceeds of $9 billion-$10 billion, with $6 billion from Castrol.

• Net debt expected to rise in the first half of 2026, then fall significantly in the second half as divestment proceeds are realized.

• Underlying effective tax rate expected to be about 40%.