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By James Herron
Of DOW JONES NEWSWIRES
LONDON -(Dow Jones)- BG Group PLC (BG.LN) Wednesday posted a 43.5% fall in net profit for the third quarter due mainly to weaker natural gas prices and lower than expected output following a gas project delay.
Total oil and gas production was 615,000 barrels a day, a rise of 4.8% on the year, but below analysts expectations of an output increase of 8.2%. This was predominantly due to a delay in the start-up of the Hasdrubal facility in Tunisia, BG said in a statement.
Nevertheless,Chief Executive Frank Chapman gave a confident outlook for the company, saying output in the fourth quarter so far is up 12% year-on-year to around 700,000 barrels of oil equivalent per day. "We are now entering a period where we can look forward to these projects driving exceptional growth to the end of the next decade," he said.
The U.K.-based energy company said net profit for the three months ended Sept. 30 totaled GBP484 million, compared with GBP857million for the third quarter of 2008.
Upstream earnings and oil and gas output have come in below expectations, said ING analyst Jason Kenney. However, this has been offset by a better-than-expected performance at its liquefied natural gas division and the favorable impact of moves in the dollar, says ING analyst Jason Kenney.
Profit adjusted for exceptional items of GBP474 million came in above a forecast of GBP450 million in a Dow Jones Newswires poll of five analysts.
Overall, Kenney expected a fairly neutral market reaction to the numbers. The exchange rate effect should be neutralized next year because the company just announced it will report in dollars starting in 2010, he added.
Total revenue for the quarter was down 31.9% to GBP2.25billion from GBP3.30 billion in 2008. Diluted earnings per share were 14.3 pence compared with 25.3 pence the previous year.
BG shares closed at 1,132 pence Tuesday, up 18% from the start of the year as equity markets and energy prices have recovered.
Company Web site: http://www.bg-group.com
-By James Herron, Dow Jones Newswires; +44 (0)20 7842 9317; james.herron@dowjones.com