France’s Total is eyeing rival assets after revealing strong profit
French oil major Total said it will raise its dividend and look into buying assets from struggling rivals after announcing better than expected fourth-quarter profit.
The figures
Adjusted net profit for the quarter ended 31 December raised 16 per cent year-on-year to $2.4bn (£2bn), trumping analysts' average forecasts of $2.3bn, according to Reuters.
The quarterly dividend was set at 0.62 euros per share, up from 0.61 euros in the previous three quarters.
Production costs were cut to $5.9 per barrel of oil equivalent (boe) compared with $9.9 per boe in 2014. Savings of $2.8bn in 2016 beat the company's target of $2.4bn.
The company is targeting a further $3.5bn of savings this year while reducing its production costs to $5.5 per boe.
Why it's interesting
The crash in prices on the global oil market dragged on the profits of many oil giants, and some are still struggling to recover – earlier this week BP reported its profit fell for the second straight year.
The Organisation of the Petroleum Exporting Countries (Opec) and non-Opec producers are working to cut production significantly to rebalance inventories, but prices are likely to remain volatile.
Total is fairing well in the uncertain times by keeping costs low. The company said its dividend hike proved the board's confidence in the strength of its balance sheet and prospective cash flows.
What Total said
Chief executive Patrick Pouyanne said Total showed its "resilience" by having the highest profitability among its rivals while oil prices were averaging $44 a barrel in 2016.
He said Total's strong balance sheet meant it will look for opportunities to pick up assets. Total plans to make final investment decisions on about 10 projects within the next 18 months.
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