Total’s adjusted profit up by 13 pct on record output

French oil major Total saw its net profit fall by 7 percent for the first quarter of the year. However, in adjusted terms, Total’s profit rose by 13 percent as its production grew by 5 percent. 

According to its financial statements released on Thursday, the company’s net income decreased by 7% to a $2.6 billion from $2.8 billion in the first quarter of 2017.

On the other hand, Total’s adjusted net income was $2.9 billion in the first quarter of 2018, an increase of 13% compared to $2.6 billion adjusted net income a year ago.

The increase was due to the performance of the segments which increased by a 22%. The net cost of the net debt increased compared to last year, mainly due to the increase in dollar interest rates.

Adjusted net income excludes the after-tax inventory effect, special items and the impact of changes in fair value. Total adjustments affecting net income were -248 million dollars in the first quarter 2018.

Revenues from sales for the first quarter of this year amounted to $43.3 billion from $36.1 billion in the same period of 2017.

Total on Thursday also said it will raise its first 2018 interim dividend by 3.2% compared to the three 2017 interim dividends and the final dividend. Total’s first 2018 interim dividend is set at 0.64 euro per share.

Total Chairman and CEO, Patrick Pouyanné, said: “First quarter production reached a record level of more than 2.7 Mboe/d, an increase of more than 5% from a year ago, despite the expiration of the Mahakam permit in Indonesia.”

Hydrocarbon production rose by 5% to 2,703 kboe/d in 1Q 2018, compared to 1Q 2017 and production of 2,569 kboe/d.

This was due to a 7% increase due to new start-ups and ramp-ups, notably Moho Nord, Yamal LNG, Edradour-GIenIivet, Kashagan, Fort Hills and Libra; 0% portfolio effect. The integration of Al-Shaheen in Qatar, the assets of Maersk Oil, Waha in Libya and Lapa and Iara fields in Brazil were offset by the expiration of the Mahakam permit in Indonesia at the end of 2017; +1 % related to improved security conditions in Libya and Nigeria; -3% due to the PSC price effect, natural field decline and production quotas.

Since the start of the second quarter 2018, Brent has traded at around 70 $/b in a context of sustained demand growth and inventory reduction. Total said that the environment remains nevertheless volatile with persistent uncertainty around the evolution of global supply.

The company rigorously maintains its discipline on costs. The Opex target of 5.5 $/boe is maintained for 2018. The cost reduction program is ongoing with an objective of more than $4 billion in 2018. The group’s organic breakeven point continues to decrease, with a target of 25 $/b this year.

An investment level of $15-17 billion is confirmed for 2018.

Production growth should surpass the 2018 target of 6%, thanks to the start-ups and ramp-ups of new projects, as well as the integration of recently acquired assets, supporting the 2016-22 target of 5% per year on average.

Offshore Energy Today Staff