MOSCOW (MRC) -- Total’s second-quarter profit almost matched year-earlier results as higher margins at Europe’s biggest refining business helped the company shrug off a 50% slump in crude prices, as per Hydrocarbonprocessing.
Net income, excluding some non-recurrent items, slid 2.1% to USD3.09 billion from a year earlier, beating the USD2.67 billion average of 15 estimates compiled by Bloomberg. The dividend will remain at 61 euro cents (USD0.67) per share, the Courbevoie, France-based producer said Wednesday in a statement.
Total confirmed a target to cut costs by USD1.2 billion while increasing output by 12% to the equivalent of 2.3 MMbopd as new projects started in Angola, the North Sea and Russia. The production gain and the highest refining margins in at least 12 years are helping Europe’s second-biggest oil company weather a crude-price crash.
"Results look robust across the board," Marc Kofler, an analyst at Jefferies Group, wrote in a report, saying he expects the earnings consensus to rise by as much as 5%. "The outlook statement also is encouraging."
The company is focused on lowering costs to "sustainably reduce its break-even and maximize cash flow," CEO Patrick Pouyanne said in a statement.
Total plans to cap spending at USD23 billion to USD24 billion in 2015, down from USD26 billion last year. The company also announced the sale of a 20% stake in the Laggan-Tormore project west of the Shetland Islands in Scotland to SSE for 565 million pounds (USD882 million).
The producer has plans for USD10 billion of asset sales through 2017, including USD5 billion this year. Total said second-quarter asset sales amounted to USD733 million, bringing those for the first half to USD3.5 billion.
As MRC reported earlier, in late December 2014, Total, Europe’s third-largest oil company, permanently shut its high density polyethylene (HDPE) line. The plant was shut permanently owing to weak margins which have arisen on account of cheap imports in the region. Located at Antwerp in Belgium, the line had a production capacity of 70,000 mt/year.
Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
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