(Adds details on the company's action plan for the full year)

 

--Total said downstream utilization rates and sales have been 50% below normal on average since mid-March

--The company strengthened its action plan, further reducing net investments and increasing operating cost savings for the full year

--Management and board members proposed to cut their compensations in order to contribute to the company's savings

 

By Giulia Petroni

 

Total SA said Tuesday that net profit fell in the first quarter as a result of falling commodity prices, refining margins, and a severe plunge in global demand due to Covid-19.

Net profit in the period was $34 million down from $3.11 billion--a 99% fall on year, the French energy major said. On an adjusted basis, profit came in at $1.78 billion, up from a FactSet-compiled consensus that forecast the figure at $1.49 billion.

Total's hydrocarbon production ticked 5% higher on year to 3.09 million barrels of oil equivalent a day compared with 2.95 million BOE/D in the year-earlier period. Production was partly boosted by the start up and ramp up of projects in the U.K., Nigeria, Norway and Australia, as well lower prices and portfolio effects.

The company said it expects production at between 2.95 million BOE/D and 3 million BOE/D for 2020, a 5% reduction compared with a previous forecast due to curtailment measures in Canada, the Organization of the Petroleum Exporting Countries' exceptional quotas, lower demand for gas, and the situation in Libya.

In downstream, plant utilization rates and sales have been 50% below normal on average since mid-March, Total said, adding that it faces uncertainties around the timing of "a return to normal."

Sales in the first quarter amounted to $43.87 billion compared with $51.21 billion in the previous year, it said.

To counteract the effects of a sharp decrease in oil prices and major market uncertainties, Total said it strengthened its 2020 action plan launched in late March by further reducing net investments to less than $14 billion and increasing operating cost savings to more than $1 billion.

It added that it would maintain its investments in low-carbon electricity at between $1.5 billion and $2 billion for the year, and said it now aims to become carbon-neutral by 2050.

Total said it would propose the distribution of a 2019 final dividend of 68 European cents (74 U.S. cents) a share and the option to receive the dividend in new shares of the company with a discount. It also approved a 2020 first interim dividend of EUR0.66 a share, stable on year.

The company also said Chief Executive Patrick Pouyanne proposed to reduce his fixed salary by 25% for the rest of 2020 in order to contribute to the group's savings. Board members also decided to donate 25% of their attendance fees starting from the annual shareholders' meeting, while members of the executive committee would reduce their fixed salaries by 10% for the rest of the year.

At 0827 GMT, shares trade 6.9% higher at EUR32.55.

 

Write to Giulia Petroni at giulia.petroni@wsj.com

 

(END) Dow Jones Newswires

May 05, 2020 04:59 ET (08:59 GMT)

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