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Record Q3 output boosts Total's cash flow, low prices hit profit

Record Q3 output boosts Total's cash flow, low prices hit profit

French energy major Total said on Wednesday that record production growth in the third quarter helped keep its cash flow steady, as adjusted net profit tumbled due to lower oil and gas prices.

Production rose 8.4% compared with the same period last year to more than 3 million barrels of oil equivalent per day. Total said it was on track to hit 9% output growth this year.

“The group continues to achieve solid results despite a third-quarter environment ... marked by an 18% decrease in the Brent price to $62 per barrel and gas prices that fell by about 55% in Europe and Asia,” CEO Patrick Pouyanne said in a statement.

Debt-adjusted cash flow fell 2% versus the same quarter in 2018 to $7.4 billion, while adjusted net profit slumped 24% to $3.02 billion.

Rival BP reported a 40% drop in profit on Tuesday, while Italy’s ENI <ENI. said on Friday profit fell 44% due to lower prices.

Total said that despite lower prices, output growth particularly in liquefied natural gas production (LNG) which soared 55% helped it generate strong cash flow.

Its downstream businesses including marketing and services, and refining and chemicals, also saw strong cash flow growth, up 14 percent at $2 billion.

“Despite the volatile European refining margins, the downstream is well positioned to generate cash flow close to $7 billion in 2019,” Total said.

The group bought back $1.15 billion of its shares through September and will buy back a total of $1.75 billion of its shares in 2019, as part of its $5 billion share buy-back programme over the 2018 - 2020 period.

Total said it will speed up its dividend growth and plans to reward shareholders with a third interim dividend of 0.68 euros per share, a 6% increase compared to 2018. Source: Reuters

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