3rd UPDATE: Total 1Q Net Profit -36% As Oil Price, Output Fall

Oil giant Total SA (TOT) Wednesday reported a 36% fall in first-quarter net profit due to sharply lower oil prices and as the company's hydrocarbons output fell.

But France's biggest company by market value looked ahead to new production due on stream later in the year and said it is able to maintain investment and dividend policy despite a "weak environment." Adjusted net profit also beat analysts' expectations.

Total said net profit fell to EUR2.29 billion, for the three months ended March. 31 from EUR3.6 billion a year earlier.

The average price of Brent crude in the first quarter was $44.50 a barrel, Total said, a decline of 54% from a year earlier and 20% below the average price in the previous quarter.

Hydrocarbon production fell to an average of 2.32 million barrels of oil equivalent in the first quarter, down 4.3%.

The biggest factor hindering production was the Organization of Petroleum Exporting Countries' production cuts, Total said.

However, the company highlighted new output expected in the coming months.

"The giant Akpo field in deep-offshore Nigeria started up at the end of the quarter and will contribute significantly to production for the rest of the year," Chief Executive Christophe de Margerie said.

Four other major projects should start up by the end of the year, de Margerie said, listing Tahiti in the Gulf of Mexico, Tombua Landana in Angola, and two liquefied natural gas projects: Yemen LNG and Qatargas II train B.

Total later Wednesday said the Tahiti project, of which Chevron Corp. (CVX) is the operator, had started production Tuesday. Total holds a 17% interest in the deepwater field.

Total said first-quarter profit, adjusted to exclude inventory changes, non-recurring items, and the group's equity share of the amortization of intangibles related to the Sanofi-Aventis (SNY) merger, fell 35% to EUR2.11 billion, from EUR3.25 billion a year earlier.

Adjusted net profit is the income figure most closely watched by analysts. Total's first-quarter adjusted net profit beats an average estimate of EUR2 billion, according to a Dow Jones Newswires survey of 13 analysts.

Sales fell 32% to EUR30.04 billion from EUR44.21 billion.

Total's fall in profit comes after peers Royal Dutch Shell PLC (RDSB.LN) and BP PLC (BP) recently reported respective declines of 62% and 58.6% in first-quarter net profit as lower oil prices hurt results from their exploration-and-production operations.

Credit Suisse said in a note the results are "robust," adding that Total had the lowest year-on-year decline in U.S. dollar earnings of the oil majors, and a balance sheet that remains strong despite low oil prices.

SocGen analyst Aymeric de Villaret said Total's results, even if they came in "at the top of the consensus range" were unlikely to boost the shares strongly, given that Eni SpA (E), BP and Shell also published results that were above expectations.

Shares of Total rose EUR0.60, or 1.5%, to close in Paris at EUR39.75. The overall CAC 40 benchmark index closed up 1.8%.

Company Web site: http://www.total.com

-By Adam Mitchell, Dow Jones Newswires, [phone]; [e-mail]