Killik & Co Daily Note

This morning’s full year results¹ from BG Group (BG..L, 1,440p) are broadly in line with expectations at the headline level. Full year revenue rose by 11% to $17.4bn (versus consensus of $17.8bn) and operating profit rose 9% to $6.9bn, slightly higher than the consensus number of $6.8bn. The rise in revenue and operating profit primarily reflected higher commodity prices. Management’s confidence in the outlook is reflected in a 10% increase in the full year dividend (FY 2012 prospective yield of 1.1%).

In the fourth quarter, the group generated revenue of $4.4bn (versus a consensus number of $4.5bn) and operating profit of $1.8bn (modestly above expectations). This represented an increase of 1% (revenue) and 3% (operating profit) compared to the fourth quarter of 2009. Although production volumes fell in both the Exploration & Production (54% of operating profit) and Liquefied Natural Gas (LNG, 35% of operating profit) divisions, higher realised prices helped to deliver higher revenues and profitability.