The total return to pre-pandemic profit levels with the rise in oil prices
Band Benjamin Mallet
PARIS, April 29 (Reuters) – French energy group Total SE TOTF.PA on Thursday released first quarter results close to pre-coronavirus pandemic levels, as rising oil and gas prices boosted its business and increased power generation.
The company, which is diversifying into renewable energies and diversifying away from activities focused on hydrocarbons, has benefited from this dynamic while areas such as oil refining have suffered.
Total reported adjusted net income of $ 3 billion for January-March, up 69% year-over-year and 9% above levels in the first quarter of 2019.
This despite a drop in hydrocarbon production of 7% compared to the previous year, to 2.863 million barrels of oil equivalent per day (bepd).
Oil prices fell with the start of coronavirus lockdowns in early 2020, which halted travel and reduced demand for fuel, prompting companies like Total to cut back on investments and save costs.
Price rally is now boosting profits for Total and peers like Britain’s BP BP.L, as the acceleration of COVID-19 vaccination programs also increases the prospects for sustained demand, although lockdowns remain in place in part of Europe.
Total warned that the oil environment remained “volatile and dependent on the recovery in global demand”.
He said he expected hydrocarbon production to remain stable this year from 2020 levels.
Like some peers, Total also benefits from booming gas activity.
TAPPET FOR RENEWABLES
The group, which is set to rebrand itself as TotalEnergies, said it plans to invest $ 12 billion to $ 13 billion this year, half of which will be spent on sustaining operations and the rest on growth, including to continue its push in renewable energies.
The company has already racked up purchases in the renewable energy sector this year, including solar projects in the United States, and a stake in India’s Adani Green Energy Limited (AGEL) and its solar assets for 2.5 billion. of dollars.
Its renewable power generation capacity portfolio through 2025, including installed sites and those under development and under construction, is now 28 gigawatts (GW) on a net basis, compared to 17.9 GW in the fourth quarter of 2020.
Total said it expects to generate some $ 24 billion in debt-adjusted cash flow in 2021, based on maintaining hydrocarbon prices at first-quarter levels, with Brent. LCOc1 at $ 60 per barrel and European refining margins of $ 10 to $ 15 per ton.
The group maintained a stable interim dividend of 0.66 euro per share compared to the first quarter results.
Total declared force majeure on its $ 20 billion liquefied natural gas project in Mozambique earlier this week after insurgent attacks last month. He gave no immediate update Thursday and is scheduled to hold a call with analysts at 11:30 GMT.
(Report by Benjamin Mallet and Sarah White. Editing by Marguerita Choy and Mark Potter)
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