France’s Total battled lower refining margins to beat third-quarter profit expectations yesterday helped by cost cuts, output from new projects and a strong contribution from its renewable energy ventures.
Total reported a 25% fall in third-quarter adjusted net income to $2.1bn, beating the $1.9bn expected by analysts polled by Reuters.
Revenue fell 8% to $37.4bn. “Total’s Q3 results look resilient.
Total continues to post solid earnings and there’s a lot to like about the direction of travel,” analysts at Jefferies who maintain a ‘hold’ rating on the stock said in a note.
The energy company said the sale of a solar farm by US subsidiary SunPower had provided a significant boost to its results, and New Energies businesses added $100mn in the quarter’s $545mn adjusted net operating income.
Italian peer Eni reported a wo@rse-than-expected adjusted net loss for the quarter hurt by a shutdown at a key Italian field.
Total said increased oil and gas production and an aggressive saving drive put it on track to organically cover spending and dividends in a low oil environment of $55 a barrel next year.
Total’s oil production in the quarter was up 4.3% thanks to five new fields. That, and a ramp-up at nine fields which started last year drove output growth and bolstered cash flow in the upstream segment.
The group increased cash flow by 13% compared to the second quarter. It said average cash flow per barrel in the new fields was higher than in existing fields.