Ferrari, BP report bumper quarterly profits – The Australian Financial Review

Meanwhile, Italian supercar manufacturer Ferrari on Tuesday posted a record quarterly profit, joining Lamborghini and Bentley in the earnings fast lane.

Although the European Union and Britain have proposed an end to sales of combustion-engine cars from 2035 and 2030, respectively – and Italy failed to get an exemption for its supercar makers – the volume of new Ferraris sold in the June quarter surged 29 per cent.

Only 17 per cent of the cars that Ferrari shifted were hybrid, and the rest were of the standard petrol-guzzling variety.

Maybe aficionados are trying to snap them up while they can, as the company is promising that 40 per cent of its product range will be fully electric by 2030. Its first electric vehicle (EV) is due off the assembly line in 2025. Another 40 per cent will be hybrid.

Foot on the gas

Demand was concentrated in the US and China, prompting Ferrari to raise its revenue and profit forecasts for the full year.

In Britain, accountants UHY Hacker Young recently reported that there were 19 per cent more supercars registered to UK addresses in 2021 than a year earlier – a trend attributed to wealthy people splashing out after the enforced austerity of the pandemic.

Lamborghini said a day earlier that its forward supply of cars was fully booked for the next 18 months. Bentley last week said its financial position was the strongest it had ever been, driven by SUV sales.

But even as wealthy consumers spend their pandemic savings, most people in Europe are feeling the pinch from soaring energy prices, which are feeding through into extraordinary increases in the cost of household gas and electricity.

BP said oil prices would “remain elevated in the third quarter due to ongoing disruption to Russian supply [and] reduced levels of spare capacity”.

Gas prices would also “remain elevated and volatile in the third quarter due to a lack of supply to Europe”.

Although some analysts expect the oil price in particular to begin easing before the year’s end, BP said it expected its cash flows and balances to sustain its ambitious program of dividend increases and annual share buybacks.

Green ambition

Despite the short-term bonanza from fossil fuel prices and demand for combustion engines, the hydrocarbon economy stalwarts were all keen to emphasise their longer-term green-transition credentials.

“Today’s results show that BP continues to perform while transforming,” Mr Looney said. The company was “providing the oil and gas the world needs today – while at the same time investing to accelerate the energy transition”.

Hargreaves Lansdown equity analyst Matt Britzman said BP was pushing into EV charging stations, offshore wind farms and green hydrogen projects.

“It’s a bigger move than peers have made, which adds some extra risk, but nonetheless is one that’s certainly commendable,” he said.

BP’s network of 16,000 charging points for EVs is 50 per cent larger than a year ago, and the company reported a doubling of electricity sales through the network in the first half of 2022 from a year earlier.

The company is building low-carbon hydrogen supplies for four of its European refineries, and is decarbonising industrial parks in Texas and northern England. It has a 40.5 per cent stake in the Asian Renewable Energy Hub, a green hydrogen zone in the Pilbara.

But BP is also keeping its eye on the main game, with Mr Looney noting an oil discovery off the Brazilian coast, a gas discovery in Indonesian waters, and the potential of Canada’s Bay du Nord.

Ferrari, meanwhile, highlighted its recent announcement that it had installed a one-megawatt solid oxide fuel cell plant and a slate of rooftop solar panels at its Maranello factory, a first step towards becoming carbon neutral by 2030.

The car maker’s presentation to investors at a capital markets day in June suggested that carbon neutrality would strongly depend at the outset on buying carbon offsets or credits.

Despite the EU’s proposed ban on new petrol or diesel cars in just 13 years, Ferrari told investors that it would “continue to push the internal combustion engine evolution and … will develop solutions in energy efficiency and alternative fuels to build on an essential part of the company’s heritage”.

Source: https://www.afr.com/companies/energy/hydrocarbon-economy-pulses-with-life-20220803-p5b6qw