Lower gas and oil prices impacts BG Group’s revenues

This morning BG Group announced its fourth quarter earnings had been heavily impacted by the gas price slump, despite stepping up its production levels. Nick Raynor, investment adviser at The Share Centre, explains what this means for investors.

"Although BG Group's results revealed that earnings for the period fell 38% to £465m, down from £756m recorded in the final quarter of 2008, they were in line with market expectations. BG Group's performance highlights the challenge faced by energy companies to deliver good value for customers while maintaining profit for shareholders.

"Following this morning's announcement and greater economic concerns, BG Group's shares fell 3 per cent. This, combined with a lower than expected dividend increase, is likely to have left shareholders feeling a little subdued. The final dividend was raised 10 per cent to 12.35 pence.

"Despite today's results, BG Group remains our preferred gas producer. We believe it is only a matter of time before gas prices improve, as demand for cleaner sources of energy increases. Plus, the Group continues to benefit from the growing demand for Liquefied Natural Gas, aiming to become the world's third largest supplier. BG Group remains a growth play for investors rather than an investment geared towards income generation."