By April 27, 2016 Read More →

Total Q1 beats forecasts on high output, strong margins

Strong performance in Total refining and chemicals helped oil slump impact

By Bate Felix

Total

Total net adjusted profit fell 37 per cent to $1.6 billion, but exceeded the $1.2 billion expected by analysts.

PARIS, April 27 (Reuters) – French energy company Total reported a better-than-expected net profit for the first quarter as high output and strong performance in refining and chemicals helped limit the impact of a prolonged fall in oil prices.

Net adjusted profit fell 37 percent to $1.6 billion but beat the $1.2 billion expected by analysts polled by Reuters.

The company’s shares were up 1.4 percent at 0722 GMT.

Weak oil prices have hurt the industry, with U.S. giant Exxon Mobil this week losing its Standard & Poor’s top credit rating for the first time in almost 70 years.

Total said hydrocarbons production rose by 4 percent to 2.479 million barrels of oil equivalent per day compared with the same quarter last year, a level in the quarter last seen 10 years ago.

Three start-up production from its Angola LNG, Bolivian Incahuasi gas field and Kashagan oil field in Kazakhstan will enable grow production at 4 percent this year, according to the company.

Total said in its downstream segment, although refining margins were down compared with 2015, the business had held up well and remained strong at the beginning of the second quarter.

“Refining & Chemicals improved its results compared to 2015 despite the decrease in refining margins to $35 per tonne, thanks to a record high utilisation rate of 94 percent and favourable petrochemicals margins,” Total Chief Executive Officer Patrick Pouyanne said in a statement.

The company proposed to maintain its dividend unchanged at 0.61 euros per share, payable through cash and a scrip scheme.

Like its peers hurt by prolonged low prices and market oversupply, Total said it was cutting costs and aimed to spend less than the $19 billion it had planned for investments in 2016.

It said it was on target to achieve planned savings of $900 million in 2016.

The company said it had the lowest technical cost among oil majors in the upstream division at $23 per barrel of oil equivalent (boe) compared with peers at $26 to $44 boe.

Its upstream division generated a net operating income of $498 million in the first quarter.

Total said it aimed to reduce its cash break-even point to $40 per barrel compared with $45 announced in February. (Reporting by Bate Felix; editing by Andrew Callus and Jason Neely)

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