Total 2Q Profit Fell on Lower Gas Prices Despite Rising Production -- Update
July 25 2019 - 4:51AM
Dow Jones News
By Sarah McFarlane
French energy giant Total S.A. (FP.FR) on Thursday posted a fall
in profits for the latest quarter, after natural gas prices plunged
in Europe and Asia.
Lower gas prices were offset to a degree by overall hydrocarbon
production growth and higher oil prices.
Total's production beat expectations, rising 9% to 2.96 million
barrels a day following the startup of some major projects
including in Angola and the North Sea.
Total's net profit fell to $2.76 billion from $3.72 billion in
the second-quarter. Adjusted net income fell 19% to $2.89 billion,
the company said. Analysts polled by FactSet had expected adjusted
net income of $2.94 billion.
"Exploration and production benefited from higher Brent with a
15% increase in operating cash flow before working capital
changes," Chief Executive Patrick Pouyanne said.
Brent oil prices averaged $69 a barrel for the second-quarter,
compared with $63 a barrel the previous quarter, but natural gas
prices were down 36% in Europe and 26% in Asia.
Total noted strong growth in its liquefied natural gas business,
where sales more than doubled compared to the same quarter a year
ago thanks to the startup of projects in Russia, Australia and the
U.S., along with the portfolio of LNG contracts acquired from Engie
S.A. (ENGI.FR) last year.
The company noted the continued growth of the business with the
agreement with Occidental Petroleum Corp. (OXY) to buy Anadarko
Petroleum Corp.'s (APC) assets in Africa, along with a contract
signed with Chinese company Guanghui Energy Co. Ltd. (600256.SH)
and the takeover of Toshiba Corp.'s (6502.TO) LNG portfolio.
Total expects production growth to exceed 9% this year but
warned of an uncertain outlook for oil and gas demand growth due to
the outlook for the global economy. The company said it plans to
sell off around $5 billion in assets over the next year, mostly
from its upstream exploration-and-production portfolio.
Citi analyst Alastair Syme said the divestments should help
Total shore up its cashflow and plug the shortfall from weaker
refining and gas markets.
--Nathan Allen contributed to this article.
Write to Sarah McFarlane at sarah.mcfarlane@wsj.com
(END) Dow Jones Newswires
July 25, 2019 04:36 ET (08:36 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
TOTAL (NYSE:TOT)
Historical Stock Chart
From Mar 2024 to Apr 2024
TOTAL (NYSE:TOT)
Historical Stock Chart
From Apr 2023 to Apr 2024