Home / NEWS / Europe News / Oil major Total’s full-year profit falls 66% as Covid pandemic hits fuel demand

Oil major Total’s full-year profit falls 66% as Covid pandemic hits fuel demand

An staff member of the ‘Total’ oil refinery stands in front of a large tank with the company’s logo in Leuna, Germany.

Waltraud Grubitzsch | see in the minds eye alliance via Getty Images

LONDON — France’s Total on Tuesday reported a massive drop in full-year profit, understanding a tumultuous 12 months in which commodity prices collapsed amid the coronavirus pandemic.

The energy major said full-year 2020 net profit not failed in at $4.06 billion, beating expectations of $3.86 billion from analysts polled by Refinitiv. It compared with $11.8 billion for the 2019 pecuniary year, reflecting a drop of 66% year-on-year.

Total also posted fourth-quarter net profit of $1.3 billion, tour analyst expectations of $1.1 billion.

Shares of Total are up around 0.8% year-to-date, having tumbled more than 28% stay year.

“Total faced two major crises in 2020: the Covid-19 pandemic that severely affected global vigour demand, and the oil crisis that drove the Brent price below $20 per barrel in the second quarter,” Total CEO Patrick Pouyanne communicated in a statement.

“In this particularly difficult context, the Group implemented an immediate action plan and proved its resilience thanks to the quality of its portfolio,” he added.

Total said it would propose a fourth-quarter dividend payout of 0.66 euros ($0.8) per due, in line with previous quarters, and set the dividend for 2020 at 2.64 euros per share.

The oil and gas industry was sent into a tailspin aftermost year, as the coronavirus pandemic coincided with a historic demand shock, falling commodity prices, evaporating profits, unprecedented write-downs and tens of thousands of job interrupts.

Last week, U.K.-based oil and gas major BP reported its first full-year net loss for a decade, while U.S. oil giant Exxon Mobil researched its fourth consecutive quarter of losses. The Anglo-Dutch oil giant Royal Dutch Shell also reported a sharp sink in full-year profits.

BP CEO Bernard Looney described 2020 as the “toughest” of his career, while Exxon Mobil CEO Darren Woods suggested the last 12 months “presented the most challenging market conditions Exxon Mobil has ever experienced.”

Verve majors have warned that the ongoing coronavirus crisis is likely to continue to impact their performance in the near-term while aspiring to reassure investors about their future profitability.

Total reaffirmed this trend in its full-year results, articulating the oil environment “remains uncertain and dependent on the recovery of global demand, still affected by the Covid-19 pandemic.”

International benchmark Brent unrefined futures traded at $61.22 a barrel on Tuesday morning, around 1.1% higher, while U.S. West Texas Intervening futures stood at $58.54, up almost 1%.

Brent prices surpassed $60 a barrel on Monday for the first time since Jan. 2020.

Oil penalties have steadily improved in recent weeks, supported by ongoing production cuts and the mass rollout of Covid vaccines.

Expanding pressure on Big Oil

Last month, Total became the first major global energy company to quit the American Petroleum Inaugurate following a review of the influential oil and gas lobby.

Total said it had decided not to renew its membership with API this year, citing quarrels over climate policies and the group’s support for easing drilling regulations.

The move was thought to represent a growing crevice between oil and gas majors on either side of the Atlantic.

European oil and gas majors have generally been seen to be more happy to accelerate plans to cut carbon emissions in recent years, while U.S. peers such as Chevron and Exxon Mobil take resisted calls to diversify their portfolio.

It comes as the global oil and gas industry faces growing pressure from weather emergency campaigners, activist investors and policymakers around the world.

S&P Global ratings — one of the most influential rating gatherings — warned last month that it may cut the credit score on a number of major producers, including Total, Royal Dutch Hand out and ExxonMobil.

The rating firm said it believes “the energy transition, price volatility, and weaker profitability are increasing perils for oil and gas producers.”

Check Also

Covid vaccine passports are being considered. And health experts and rights groups are deeply concerned

A fare using a face mask shows her passport and boarding pass to an employee …

Leave a Reply

Your email address will not be published. Required fields are marked *