PARIS, France, Apr 27 – French oil giant Total on Wednesday unveiled first quarter net profits down 40 percent on lower oil prices yet better than forecast on higher production and cost cuts.
Net income fell to $1.6 billion (1.4 billion euros), better than the $1.2 billion consensus of a panel of analysts consulted by Bloomberg albeit down from $2.66 billion for the same period last year.
Net adjusted results, stripping out elements such as stock, dropped 37 percent to $1.6 billion on sales of $32.8 billion, down 22 percent.
In the face of persistently weak oil prices Total has embarked on austerity to slash costs and said it would be ramping down investments in 2016 with organic investments below the $19 billion announced in February, which was already down on $23 billion for 2015.
“Operating costs are decreasing as planned with the objective of achieving $900 million in savings during the year,” Total said, adding it was selling off $900 million of assets including the FUKA gas pipeline network in the North Sea.
The results, which Total dubbed “a solid result in line with our annual objectives,” was welcomed on the Paris bourse where its share pride rose 1.95 in late morning trading to 44.59 euros.
“The Upstream portfolio benefited from the lowest technical costs among the majors. The Downstream achieved a solid result in line with our annual objectives,” CEO Patrick Pouyanne said while analysts at RBC Capital Markets also said the results were “solid.”
Total is looking to hike production of hydrocarbons to counter a near 40 percent fall in oil prices across the opening quarter and a drop of 60 percent over two years.
Total said its technical costs fell to $23 dollars per barrel of oil equivalent — comparing favourably with between $26 to 44 for other sector giants.