Total Q2 Profit Declines, But Production Rises

(RTTNews) - French oil and gas giant Total SA (TTA.L, TTFNF.PK, TOT) reported Wednesday a profit for the second quarter that declined four percent from last year, reflecting a sales decline amid sharply lower oil prices. However, hydrocarbon production grew 12 percent from last year.

The company's results were impacted by lower oil prices, which recovered slightly in the second quarter to $60 per barrel, but still stays more than 40 percent below the year-ago quarter levels. These were partially offset by higher margins in the downstream segment.

"Despite the sharply lower oil price, Total reported adjusted net income of $3.1 billion, a decrease of only 2% compared to the same period last year, thanks to productivity gains in all the business segments," CEO Patrick Poutanne said.

Net income group share decreased 4 percent to $2.97 billion from $3.10 billion in the prior-year quarter, and earnings per share also declined $1.29 from last year's $1.36.

Excluding items, adjusted net income for the quarter was $3.09 billion or $1.34 per share, compared to $3.15 billion or $1.38 per share in the year-ago quarter.

Adjusted net operating income from the Upstream segment plunged 49 percent to $1.56 billion, due to the decline in average realized prices.

Meanwhile, Refining & Chemicals segment reported adjusted net operating income of $1.35 billion, up more than three fold from last year, amid higher refining and petrochemical margins.

Sales for the quarter decreased 29 percent to $44.72 billion from $62.56 billion in the same quarter last year. Revenue from sales dropped $39.27 billion from last year's $56.21 billion.

Combined hydrocarbon production for the quarter was 2.23 million barrels of oil equivalent per day boe/d, up 12 percent from 2.05 million boe/d last year, with liquids production rising 23 percent, and gas production improving 1 percent from the prior year.

Refinery throughput increased 18 percent in the quarter to 1.91 million barrels per day or b/d, reflecting the start up of Saudi Aramco Total Refining and Petrochemical Co. or SATORP and a lower level of maintenance in Europe.

The board of directors also on Tuesday approved a second-quarter interim dividend of 0.61 euro per share, payable on January 14, 2016 in cash or shares issued in lieu of cash to shareholders of record date December 18, 2015.

Looking ahead, Total said it is implementing plans to reduce its cash breakeven. It expects to exceed its 2015 objective to cut operating costs by $1.2 billion in 2015, and confirmed the announced reduction of 2015 Capex to $23 billion to $24 billion.

Separately, Total agreed to sell 20 percent of its interests in the Laggan, Tormore, Edradour and Glenlivet fields, located in the West of Shetland area, to SSE E&P UK Ltd. for 565 million pounds or about $876 million, subject to the customary approvals.

The sale of the minority interest is part of Total's portfolio management strategy and target of divesting $5 billion of assets in 2015.

In Wednesday's regular trading in Paris, the stock is trading at 43.58 euros, up 0.59 euros or 1.37%.