--Total returned to a profit in the third quarter after a second-quarter loss, although earnings remained far lower than in 2019

--Results benefited from oil prices above $40 a barrel, but refining margins suffered

--The company's third interim dividend payment was maintained at EUR0.66 a share

 

By Giulia Petroni

 

Total SE returned to profit in the third quarter of the year as results benefited from a more favorable environment with oil prices above $40 a barrel.

The French oil-and-gas major on Friday reported a quarterly net profit of $202 million, down from $2.80 billion in the same period last year. The result marked an improvement compared to the previous quarter, when the company posted a net loss of $8.37 billion due to exceptional asset impairments.

On an adjusted basis, profit was $848 million, well above a FactSet-compiled consensus that had forecast the figure at $472.6 million.

Quarterly results were positively affected by improved oil prices as well as strong demand for petroleum products for road transportation, Total said. However, natural gas prices were low and refining margins severely depressed due to excess production capacity.

Total's hydrocarbon production decreased 11% on year to 2.72 million barrels of oil-equivalent a day partly due to compliance with the Organization of the Petroleum Exporting Countries' quotas and portfolio effects. The company said it expects full-year production below 2.9 million barrels a day.

Sales in the third quarter fell to $33.14 billion, compared with $48.59 billion for the year-earlier period.

Total said the oil price increase is expected to positively affect its average liquefied natural gas selling price in the fourth quarter, while European refining margins remain fragile mainly due to low demand of jet fuel.

The company said it will exceed its cost reduction goals with savings of more than $1 billion in 2020, but cut its net investments to less than $13 billion for the full year.

Total maintained its third interim dividend payment at 0.66 euros ($0.77) a share and reaffirmed its sustainability in a $40 per barrel of Brent environment.

At 0840 GMT, shares were up 2.1% at EUR25.66.

 

Write to Giulia Petroni at giulia.petroni@wsj.com

 

(END) Dow Jones Newswires

October 30, 2020 05:00 ET (09:00 GMT)

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