Welcome to the BP presentation to the Financial Community Webcast and Conference Call. I now hand over to Craig Marshall, Head of IR.
Welcome to BP's Second Quarter 2018 Results Presentation. I'm Craig Marshall, BP's Head of Investor Relations, and I'm here today with our Chief Executive, Bob Dudley; and our CFO, Brian Gilvary.
(Forward-Looking Cautionary Statements)
Now, over to Bob.
Thank you, Craig, and good morning, everyone. Thank you for joining us.
It's certainly been a busy first half of the year for BP, even busier these last few days with the news that we will acquire the U.S. onshore assets from BHP. I will talk about that transaction as part of this call, but the main focus for today is to provide you with a summary of our results for the second quarter of 2018 and an update on the financial and operational progress for the first half of the year.
I'll start with some highlights from the first half and provide some reflections on the market forces that have been at play in the macro environment. I'll also talk about how we are shaping the business for the future and then go on to summarize the key points of the BHP deal once more. Brian will report on the detail of our second quarter numbers, financial frame and 2018 guidance, and I'll then come back to update you on our operational performance so far and provide more detail on our commitment to advancing the low carbon agenda. And then we'll take your questions.
So to begin with some highlights from the first half of the year, we're now 6 quarters into our 20-quarter plan, and we continue to move ahead. Underlying profit for the second quarter remains strong at $2.8 billion and compares to $2.6 billion in the first quarter and $700 million a year ago. And our underlying cash flow of $12.4 billion in the first half more than covered our organic capital expenditure and the full dividend. These are numbers that reflect our continued focus on disciplined execution of the strategy we laid out at the beginning of 2017, and we're also seeing similar progress across the business segments.
In the Upstream, we reported underlying pretax earnings of $3.5 billion, underpinned by around 10% growth in underlying production compared to the same quarter last year. That's an improvement on our first quarter 2018 result, which itself was our best since the third quarter of 2014.
We also continued to build our portfolio in a way we believe is distinctive to BP, optimizing the value of our assets in both incumbent and growth areas. Last week's announcement is a good example of our approach. Last week's move materially high grades and repositions our U.S. Lower 48 business in line with our Upstream strategy.
In the Downstream, we reported underlying pretax earnings of $1.5 billion. The segment continues to deliver against this growth agenda, notably across fuels and refining, with continued growth into new retail markets.
Group Head of IR
Michele Della Vigna
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