BP reported a triple-digit increase in fourth-quarter profitability for its Castrol lubricants business and a slight improvement for the full year 2023, the former attributed to higher margins and a change from late 2022’s COVID restrictions.
For the full year, Castrol’s underlying replacement cost profit before interest and tax was $730 million, up 4% compared to $700 million, London-headquartered BP said.
Underlying replacement cost profit jumped 204% to $213 million for the quarter ending Dec. 31, compared to $70 million in the same period last year.
“The Castrol result for the fourth quarter was higher compared to the same period in 2022, primarily due to higher margins underpinned by lower cost of supply and higher volumes, with the fourth quarter of 2022 impacted by COVID restrictions, notably in China,” BP said in its earnings stock exchange announcement.
Capital expenditure for the Castrol unit declined 11% in 2023 to $262 million. In the fourth quarter, such capital expenditure decreased 8% to $90 million.
The company noted that Castrol added around 4,500 workshops in 2023, compared to 2022, and now has more than 34,000 workshops.
In its 2024 guidance, BP expressed optimism for a stronger contribution from Castrol, “underpinned by volume growth in focus markets.”
BP’s overall profits in 2023 swelled to $15.2 billion, rebounding from a $2.5 billion loss in 2022. However, fourth quarter results dropped by 97% to $371 million, compared to $10.8 billion.