- Unstable Oil Prices Hurt Total Profits in Q1 2019
Total net profit for the first quarter of 2019 declined by 4 percent from a year ago to $2.8 billion due to unstable oil prices and debt costs despite the surge in oil and gas production during the quarter, the company reported.
The French energy giant said adjusted net profit, which was down for the first time in 10 quarters, was hit by lower oil prices during the quarter as Brent was averaging $63 per barrel.
Still, adjusted net profit was slightly above analysts’ projection of $2.7 billion.
Therefore, the oil firm kept its investments and cost savings target unchanged for the remaining part of the year, saying production growth should exceed 9 percent during the year because of completing projects started in 2018 and the commencement of new ones in Angola, Brazil, Britain, and Norway.
The oil company would take advantage of low-cost regions to launch additional projects in Uganda, Brazil and Russia.
The company’s shares were down slightly during the early trading session on Friday, but its year-to-date return stood at around 10 percent.
“A decent start to the year,” wrote analysts at RBC Capital Markets on Total’s results, as they kept an “outperform” rating on the stock.
“Total’s balance sheet is strong, with gearing below 20 percent, in line with the objective,” said Total’s chairman and chief executive Patrick Pouyanne.
The French group cash flow after organic investments grew by 18 percent year-on-year to $3.2 billion.
Oil and gas production reached a record level in the first quarter at 2.95 million barrels oil equivalent per day (Mboe/d), up 9 percent year-on-year.
Total increased its first interim dividend for 2019 by 3.1 percent to 0.66 euros ($0.7350) per share, and it also bought back shares during the quarter.