Total Swung to Fourth-Quarter Net Profit, Plans New Projects

By Inti Landauro

PARIS--French oil major Total SA (TOT) notched up better-than-expected fourth-quarter profit, reaping the benefit of heavy recent cost cuts, higher oil output, and the rebound in crude prices to above $50 a barrel.

The company said it is sufficiently confident about the outlook for the oil market to plan as many as 10 new projects within the next 18 months even though management intends to keep a lid on overall capital expenditure amid likely volatile crude prices.

Total posted net profit of $548 million in the three months to end-December, a swing from a net loss of $1.63 billion in the same period a year earlier, on a 12% jump in revenue to $42.28 billion.

When adjusted to exclude the effect of changes in inventories and other nonrecurring items, profit rose to 16% to $2.41 billion from $2.08 billion, ahead of the average analysts' forecast of $2.26 billion, the median estimate according to data provider FactSet.

Total booked a $1.86 billion depreciation charge on gas assets in the quarter. Net profit rose 22% in the year to Dec. 31 to $6.20 billion.

To offset the effects of falling oil and gas prices on its balance sheet, Total has carried out a widespread program to cut costs at all its units and scrambled to extract more oil from existing fields, accelerated new field developments and cut capital investment. The strategy helped the company book net profit of more than $1 billion in 2014 and in 2015.

Total said it raised output by 4.5% to 2.45 million barrels of oil equivalent a day in 2016 after a 14% increase in 2015.

The company said it declared a higher dividend of 2.45 euros ($2.62) a share.

-Write to Inti Landauro at [e-mail]

(END) Dow Jones Newswires

February 09, 2017 02:55 ET (07:55 GMT)

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