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Oil major Total's first-quarter net profit slips despite record output

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Oil major Total's first-quarter net profit slips despite record output
FILE PHOTO: The logo of French oil giant Total is pictured at a petrol station in Latresne near Bordeaux, France, November 19, 2018. REUTERS/Regis Duvignau   -   Copyright  REGIS DUVIGNAU(Reuters)
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By Bate Felix

PARIS (Reuters) – French energy major said its net profit for the first three months of the year fell 4 percent to $2.8 billion (£2.2 billion) compared with a year ago due to volatile oil prices and debt costs, despite a new record oil and gas output.

Total said its adjusted net profit, which was down for the first time since the fourth quarter of 2016, was hit by oil prices, with the Brent price averaging $63 per barrel in the January to March period, down 6 percent year-on-year.

The adjusted net profit was nevertheless slightly above average analysts’ forecast of $2.7 billion.

Natural gas prices slumped in Europe by 11 percent, and in Asia by 30 percent, Total said.

The company added that the increase in the net cost of its net debt compared with last year, mainly due to the rise in U.S. dollar interest rates, had also weighed on its profits.

Its refining margin had also been volatile during the quarter, the company said.

“Total’s balance sheet is strong, with gearing below 20 percent, in line with the objective,” said Total’s chairman and chief executive Patrick Pouyanne.

The company said its oil and gas output reached a new record level in the quarter at 2.95 million barrels of oil equivalent per day (Mboe/d), up 9 percent year-on-year.

Total increased its first interim dividend for 2019 by 3.1 percent to 0.66 euros per share, and it also bought back shares during the quarter.

The French group said it would maintain discipline on spending in 2019 and it kept its net investment target unchanged at $15 to $16 billion, and cost savings at $4.7 billion.

(Reporting by Bate Felix; Editing by Sarah White/Sudip Kar-Gupta)

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