LONDON (Dow Jones Newswires), July 29, 2011
French oil major Total Friday posted a 6% drop in second-quarter adjusted net profit as higher crude oil prices and the integration of Novatek's production failed to offset lower overall output and weaker refining margins.
The company reported EUR2.79 billion in the closely-watched adjusted net profit figure, somewhat short of the EUR2.84 billion projected by analysts. That was also lower than last year's result of EUR2.96 billion.
The French oil giant also became the latest European oil major to report weaker year-on-year oil and gas production, with seasonal maintenance and the loss of Libyan crude some of the common themes to affect the sector.
Total shares were off .47, or 1.23%, to EUR37.89 at 753GMT, slightly weaker than the French CAC 40 index.
Still, even as Total Chief Executive Christophe de Margerie acknowledged the impact of weak refining margins and Libyan oil outages, he expressed confidence in light of strong oil prices due to geopolitical tensions and strong energy demand. The company announced it will pay a second-quarter interim dividend for the first time of EUR0.57 a share.
"With a strong balance sheet and dynamic pace of execution in all of the group's segments, Total begins the second half of 2011 very confident in its outlook for profitable growth to benefit all of its stakeholders," de Margerie said.
Total said the European refinery margin indicator averaged $16.3 per metric ton in the second quarter, down 48% from $31.2/ton a year earlier, even though the group had said in the previous quarter that the margin should improve following the start-up of the new deep-conversion unit at its Port Arthur refinery in the U.S.
Unadjusted net profit came in 12% lower at EUR2.72 billion from EUR3.10 billion in the same quarter of 2010.
The group's hydrocarbon output over the period dropped 2% to 2.31 million barrels of oil equivalent per day from 2.36 million of boe/d a year earlier. Analysts expected production to drop 2.4% to 2.30 million barrels per day.
Copyright (c) 2011 Dow Jones & Company, Inc.
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