Total’s Q1 profit falls on depressed oil prices

30/04/2015 00:56 AST

French oil giant Total announced a 20 per cent fall in first quarter profits due to slumping oil prices and disruption of its activities because of violence in Yemen and Libya.

Total said in a statement that profits for the first three months of the year dropped to $2.6 billion (2.4 billion euros) from $3.3 billion during the same period last year, on 30 per cent lower sales of $42.3 billion.

The company said the profit slide amounted to 22 per cent in adjusted terms compared to the first quarter of 2014. But it said that erosion was partially offset by a 10 per cent hike in production to 2.4 million barrels per day, and capital gains realised on asset sales.

Total chairman Patrick Pouyanne said that the slackening profit was relatively moderate in a market where “the Brent price decreased by 50 per cent compared to last year.”

The adjusted net result also beat analysts’ forecasts of $2.1 billion in profits. The numbers also were largely in synch with first quarter figures revealed by British rival BP on Tuesday, which said its profits had dipped 26 per cent to $2.6 billion.

Pouyanne also cited the positive impact of Total’s push to cut $1.2 billion in operating costs, and profits made on $5 billion in assets Total has already sold out of a total of $10 billion it has decided to shed.

“Against a backdrop of lower prices, Total’s first quarter results include a number of significant accomplishments in all segments,” Pouyanne said. “Total is thus demonstrating its resilience and profiting from its integrated model.”

In addition to depressed global oil prices, Total said income was undermined by the closure of the LNG gas terminal in Yemen since April, due to continuing violence there.

Total owns 40 per cent of the installation. The French major also said violence in Libya had forced the group to cease all onshore activity in the country.

AFP