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BG Group is set to announce its first-quarter figures on Thursday and the markets consensus is for them to post a pretax profit of £1.011 billion, following a loss of £974 million in the last quarter of 2013. The earnings per share looks set to come in at 0.179, a discount year-on-year from 2013’s 0.2 figure.
The last couple of years have presented BG Group with a number of issues, as they have had to manage the political and structural changes that Egypt has undergone. Egypt is still running with an unstable government, so forward planning has been particularly problematic. Because of these problems, the company has announced a reduced target for output of 590-630 thousand barrels per day.
Today’s announcement has seen the shares drop by 5% in the first couple of hours trading. Mr Finlayson had only been in the job for 16 months and although he had overseen a particularly difficult period, the market perception was that most of the hurdles facing the company were not of his making.
Production from Egypt remains the biggest problem for the company, with the market expecting a drop of over 35% from the fourth-quarter 2013. As the reason for this change is personal, the firm has acted swiftly in appointing non-executive Andrew Gould to the helm.
The share price is now below the 50-, 100- and 200-day moving average. Unless Thursday’s figures are surprisingly good, a retest of the year lows, down towards 1000p, looks like a distinct possibility.