2nd UPDATE: Total Profit Up 32%; Interim Dividend On Nov 17

French oil major Total SA (TOT) Friday posted a 32% increase in its net adjusted profit for the third quarter, slightly beating expectations amid higher crude oil prices and increased output thanks to the ramp up of new projects and better natural gas production than expected.

Total also announced a change in its dividend policy, as the group's board decided to pay the 2011 dividend on a quarterly basis instead of semi-annually, with the first interim dividend for 2011 to be paid in September 2011.

Also, an interim dividend for 2010 of EUR1.14 per share will be paid on Nov.17, with the remainder of the final dividend for 2010 to be paid after the May 2011 annual meeting.

In the third quarter ended Sep.30, Total's net adjusted profit -- the income figure closely watched by analysts because it excludes the often-volatile value of oil inventories--stood at EUR2.5 billion, compared with EUR1.87 billion a year earlier, slightly above expectations. Analysts polled by Dow Jones Newswires had seen the adjusted net profit at EUR2.44 billion for the period.

The group's net profit over the period increased 47% to EUR2.8 billion from EUR1.93 billion a year earlier.

The figures are "a tad better than expectations," said Societe Generale's Aymeric de Villaret said, noting that liquefied natural gas production played a role in the positive result. He rates Total at buy.

Also, the change in Total's dividend payment policy to match those of major European peers "is quite an important step," said Oddo's analyst Jean-Pierre Dmirdjian. He rates Total add.

At 1355 GMT, shares in Total reversed an initial downward trend and were trading EUR0.07 or 0.2% up to EUR39.13 while the CAC-40 benchmark index was up 0.3%.

Over the period, the price of Brent crude oil averaged $76.9 per barrel, up 13% from a year earlier, but down 2% from the previous quarter.

Output in the third quarter was boosted by the ramp-up of the major's new projects to 2.34 million of barrels of oil equivalent per day, up 4.3% from 2.24 million boe/d a year earlier, Total said.

The production has been "very good" but the group, which foresees output annual growth of 2% in 2011 doesn't anticipate "big growth" in 2011, its chief financial officer Patrick de la Chevardiere said during an analyst call.

The European refining margin indicator in the third quarter stood at $16.4 per ton, up 37% from a year earlier, but down compared with the average $31.2 per ton in the second quarter and $29.1 in the first quarter. Refinery throughput was down 3% in the third quarter to 2.07 million barrels per day compared with a year earlier and also down 3% from the previous quarter, mainly due to the shutdown of its Dunkirk refinery in Northern France and the shutting down of a distillation unit at the U.K.-based Lindsey refinery.

The unit shutdown at Lindsey is due to an incident and is temporary and not linked to the planned divestiture, Total CFO said.

Looking ahead to the last quarter of the year, Total noted that at the start of the period strikes in France to protest pension reforms led to a temporary shutdown of French refineries, while the US dollar has continued to weaken against the euro, and the price of oil has increased "in response to positive economic signs and the approach of the winter in the northern hemisphere."

The strikes in France have an actual cost of EUR5 million to EUR6 million per day and overall the cost for the company is EUR100 million, de la Chevardière said.

Also, natural gas spot prices at the beginning of the fourth quarter have increased in Europe and Asia, but decreased in the U.S., "where the market remains oversupplied as a result of the abundance of shale gas production," Total noted.

The group also noted that from July 1, it no longer accounts for its interest in French pharmaceutical group Sanofi-Aventis as an equity affiliate.

The group, which still retains 5.7% of Sanofi's equity is "not in a hurry" to sell the shares, as the stock price is too low to sell, its CFO said.

Over the first nine months of the year, Total's adjusted net profit was up 36% to EUR7.73 billion, from EUR5.7 billion a year earlier with net profit over the period up 34% to EUR8.54 billion from EUR6.38 billion a year earlier.

Total has a flurry of new projects for which final investment decisions are expected by end 2011, such as Ofon 2 and Egina in Nigeria, Ahnet in Algeria, Ekofisk South, Eldfisk 2 and Hild in Norway as well as the first phase of Shtokman in Russia.

Company Web site: www.total.com

-By Geraldine Amiel, Dow Jones Newswires; +33 1 40171740; geraldine.amiel@dowjones.com

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