In a strategic move to enhance shareholder value, BP ($BP) has ramped up its returns program, announcing a 10% increase in its second-quarter dividend and unveiling a robust $3.5 billion share buyback initiative for the latter half of the year. The British oil and gas conglomerate revealed on Tuesday that it will distribute a dividend of $0.08 per share for the second quarter.
This increase aligns with analysts' expectations and marks an upward revision from the previous quarterly and year-ago payouts, which were $0.07270 per share. In addition to the dividend increment, BP is executing a buyback of $1.75 billion worth of shares during the second quarter. This initiative elevates the total buyback amount to an impressive $3.5 billion for the first half of the fiscal year.
The oil giant has pledged to initiate another $3.5 billion share buyback program for the second half of the year, as part of its commitment to executing a total buyback of no less than $14 billion through the year 2025. Murray Auchincloss, Chief Executive Officer of BP, commented on the company's financial performance and outlook, stating, "Our businesses continue to operate safely and efficiently.
We are driving focus across the business and reducing costs, all while building momentum in our drive to 2025. Our recent go-ahead of the Kaskida development in our Gulf of Mexico operations, coupled with the decision to take full ownership of BP Bunge Bioenergia while scaling back on new biofuels projects, is testament to our commitment to delivering a simpler, more focused, and higher value company.
This all supports growing returns for shareholders, as we announced today." In terms of financial metrics, BP reported a commendable operating cash flow of $8.10 billion for the second quarter, a substantial increase from $6.29 billion in the same period last year. Chief Financial Officer Kate Thomson highlighted that this positive cash flow has contributed to a reduction in the company’s net debt, which decreased to $22.61 billion, a notable decline from $23.66 billion during the same timeframe last year. Analysts at RBC Capital Markets noted, "Rising net debt has been perceived as a concern for BP's investment case, and the reduction this quarter is a welcome development.
BP had reported a working capital build of $2.4 billion in Q1, and there were indications that this would unwind over Q2 and Q3. Today's results, along with the dynamics surrounding Macondo reported in the working capital line, suggest an additional working capital release of approximately $800 million is anticipated by the end of Q3." As a point of interest, for the first half of the fiscal year, BP experienced a year-over-year decline in profit attributable to shareholders, which fell to $2.13 billion from $10.01 billion from the previous year.
Furthermore, total revenue during this period also experienced a dip, decreasing to $98.21 billion from $106.43 billion. As the day progressed, BP shares exhibited positive performance, rising more than 1% in London, reflecting a price of $458.51, a change of +$5.51, or a percentage change of +1.22%..