UK: BG Group Reports 2010 Fourth Quarter and Full Year Results

BG Group today reported its 2010 Fourth Quarter and Full Year Results.

Full Year Highlights

* Business Performance earnings per share up 18%

* Strong cash flow from operations of $8.4 billion

* Full year dividend increased by 10% to 21.60 cents per share (13.66 pence per share)

* Excellent progress on major projects in Australia, Brazil and the USA

* Three-year proved reserve replacement ratio of 223%

* Total reserves and resources increased by 1.7 billion boe to 16.2 billion boe

BG Group’s Chief Executive, Frank Chapman said:

“BG Group delivered good financial results for 2010. The reserves replacement ratio is further evidence of our progress with the major projects underpinning our very strong growth programme to 2020.”

Fourth quarter

Revenue and other operating income increased by 1% to $4 363 million, reflecting higher realised prices, partially offset by lower LNG managed volumes and E&P production volumes.

This increased revenue and other operating income, together with a lower exploration charge, resulted in a 3% increase in total operating profit to $1 802 million.

Cash generated by operations was $1 813 million (2009 $2 177 million). Net finance costs were $48 million.

Capital investment of $2 497 million in the quarter comprised investment in E&P ($2 071 million), LNG ($337 million) and T&D ($89 million) and reflected a ramp-up of activity in Australia, Brazil and the USA.

Full year

Revenue and other operating income increased by 11% to $17 363 million and total operating profit increased by 9% to $6 925 million, primarily reflecting the impact of higher commodity prices.

Net finance costs of $156 million (2009 $192 million) benefited from foreign exchange gains of $82 million (2009 $45 million gains).

The Group’s effective tax rate (including BG Group’s share of joint venture and associates’ tax) was 38.5% (2009 42%) for the full year and included a credit of $106 million in relation to a favourable settlement for a prior period.

Cash generated by operations increased by 10% to $8 370 million (2009 $7 597 million). As at 31 December 2010, net debt was $6 973 million and the gearing ratio of the Group was 20%.

Capital investment in the year (including acquisitions of $1 233 million) was $9 247 million and included investment in E&P ($7 092 million), LNG ($1 868 million) and T&D ($259 million).

In considering the dividend level the Board takes account of the outlook for earnings growth, cash flow and financial gearing. Taking these factors into account, the Board has recommended a final dividend of 11.78 cents per share (7.31 pence per share), bringing the full year dividend to 21.60 cents per share (13.66 pence per share), an increase of 10% compared with last year. The final dividend will be paid to shareholders in Pounds Sterling on 20 May 2011.

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Source: BG Group, February 8, 2011;