TOT TOTAL SE

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)

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