Total Returned to Profit, But Recovery Was Mixed -- Earnings Review
October 30 2020 - 11:11AM
Dow Jones News
By Giulia Petroni
Total SE reported third-quarter results on Friday. Here's what
we watched:
PROFIT: The French energy major registered a quarterly net
profit of $202 million, down from $2.80 billion in the year-earlier
period. This marked an improvement from the previous quarter, when
Total booked a net loss of $8.37 billion. On an adjusted basis,
profit was $848 million, beating a FactSet-compiled consensus that
had forecast the figure at $472.6 million.
PRODUCTION: Hydrocarbon production fell 11% on year to 2.72
million barrels of oil-equivalent a day. A FactSet-provided
consensus had forecast the figure at 2.80 million boe/d. The
company said it expects production to be below 2.9 million barrels
a day for the full year.
WHAT WE WATCHED:
-MIXED RECOVERY: Oil prices improved in the quarter, supported
by strong discipline within the Organization of the Petroleum
Exporting Countries and recovering demand for road fuels. However,
refining margins suffered from excess production capacity and weak
demand, particularly for distillates, as a result of a drop in air
transport.
-DIVIDEND: Total kept its third interim dividend payment at 0.66
euros ($0.77) a share and reaffirmed the dividend sustainability in
a $40-a-barrel Brent environment. "Total's relative outperformance
versus peers in 2020 probably comes down to balance sheet,
management credibility and the starting point of not having a
ridiculously high payout ratio like key peers, who have been forced
to cut dividends," analysts at Citi said.
-NET INVESTMENTS: The company cut its net investments for the
full year to less than $13 billion--an amount that includes $2
billion for renewables and electricity--,but said major projects
won't be affected by the reduction.
Write to Giulia Petroni at giulia.petroni@wsj.com
(END) Dow Jones Newswires
October 30, 2020 10:56 ET (14:56 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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