Aberdeen, Scotland — Total beat forecasts by keeping net adjusted fourth-quarter profit steady at $3.2 billion despite low oil prices and fulfilled a pledge to boost dividends, lifting the French energy firm’s shares.
The stock rose about 3% before easing off its highs as the company bucked a trend in the industry which has seen profits tumble in the last three months of 2019. Analysts had expected Total’s net profit to slip to $2.7 billion.
“This performance is better than that of our rivals in terms of resisting low oil prices,” CEO Patrick Pouyanne told journalists, adding Total was rewarding investors with a 6% increase in the final dividend for 2019 to 0.68 euros per share.
“Taking into account the strong visibility on cash flow, the group will continue to increase the dividend with the guidance of 5% to 6% per year,” the company said in its statement.
Total bought back $1.75 billion in shares in 2019 ahead of schedule, and plans to buy back $2 billion more in 2020.
Pouyanne said the group had reported solid results including debt-adjusted cash flow (DACF) of $7.4 billion, up more than 20% from a year earlier.
“While some peers buckled last week to a synchronised slowdown in their commodity prices and margins, Total has bucked that trend with flat year-on-year net income,” Bernstein analysts wrote, adding that net income and net operating income were both ahead of forecasts.
The analysts, which rate the stock “outperform”, said liquefied natural gas (LNG) margins “also beat our expectations as the company proved immune to low spot gas prices despite market concerns”.
LNG prices have been under pressure as new projects have kept the market well supplied, while oil prices have tumbled to around $55 per barrel from last year’s peak in April of almost $75.
Rivals have seen fourth-quarter profits slide on lower prices. BP Plc reported a 26% drop on Tuesday while Royal Dutch Shell Plc last month said its profits had halved.
Although Total reported impairments of around $500 million, it said it was better than rivals because it had no exposure to U.S. shale gas.
“Let me repeat, you will not see Total buying a shale oil company in the U.S.,” Pouyanne told analysts in Aberdeen during the results presentation.
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