MOSCOW (MRC) -- France's Total posted better than expected earnings in the fourth quarter as oil prices stabilized, and said it would change its name as part of a push to diversify and grow renewable power and electricity production, reported Reuters.
The French oil and gas major, which like rivals suffered in 2020 as fuel consumption tumbled during the pandemic, said it would rebrand as TotalEnergies as it tries over the next decade to reduce oil products to a third of its sales from over half now.
The company plunged to a USD7.2 billion net loss for 2020 as a whole, hit by around USD10 billion of impairments as oil prices collapsed. But it had already recorded most of the charges, including some linked to write downs on its Canadian oil sands assets, in the first half of last year and on an adjusted basis, net income came in at USD4.06 billion for the year.
Earnings fell less sharply in the fourth quarter than in the previous three months. Adjusted net income, which strips out some one off items, was down 59% from the year earlier period to USD1.3 billion, beating analysts' expectations, and in contrast with some peers including Shell.
"Overall a rock steady performance in a tough quarter and year," analysts at Bernstein said in a note, adding that cash flow levels were strong.
Total shares were up 1.2% by 1055 GMT.
Chairman and Chief Executive Patrick Pouyanne said the company's rebranding reflected a bid to move as fast as possible as it tries to improve on its environmental goals.
"By proposing this name change to shareholders, we're also fundamentally asking them to approve this change in strategy," Pouyanne told reporters.
The group said it has already spent more than USD2 billion on acquisitions in the renewables sector this year, and planned to spend 20% of its investment budget for 2021 on this drive, up from around 15% in 2020.
Total will have some USD5 billion of investments to finance overall in the renewables segment this year, with a mixture of debt and capital, Pouyanne said, and some USD60 billion by 2030.
Total said the oil market outlook remained uncertain, and it would target another USD500 million in cost cuts in 2021, after saving USD1.1 billion last year.
It is targeting USD12 billion in net investments overall this year, down from USD13 billion last year.
Total forecast a 10% improvement in sales of liquefied natural gas this year, in part thanks to a ramp up of operations at the Cameron LNG export plant in the United States.
It also on Tuesday signed a fiscal stability agreement with Papua New Guinea which could pave the way for work to begin on a long-stalled LNG project in the country.
Total said it would propose a dividend payout of 0.66 euros per share for the October to December period, in line with previous quarters in 2020.
As MRC wrote earlier, within the framework of its net zero strategy, Total will convert its Grandpuits refinery (Seine-et-Marne) into a zero-crude platform and will invest more then EUR500 mln into this project. By 2024 the platform will focus on four new industrial activities: production of renewable diesel primarily intended for the aviation industry, production of bioplastics, plastics recycling and operation of two photovoltaic solar power plants.
We remind that in November 2019, Total disclosed that itis evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020).
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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