Total’s earnings in Q4 improve as oil prices stabilized

Total reports huge loss for 2020 but finds some redemption in quarter results.



French supermajor Total reported a net loss of $7.2 billion for 2020, down from a profit of $11.27 billion for 2019, in keeping with what all pandemic-stricken oil majors have suffered last year. 

The conglomerate beat fourth-quarter expectations and maintained its dividend payment. Total also said that it will change its name to reflect its shift to renewable energy—it will now be known as TotalEnergies.

The losses were driven by asset write-downs forced by the coronavirus pandemic. ExxonMobil, Chevron, BP and Royal Dutch Shell, all have recorded more than $50 billion in losses between them for last year, as oil prices crashed on lower demand.

TotalEnergies

Total’s net income fell just over $4 billion. However, Total said it would maintain its €0.66 or $0.80 per share a share investor payout, confirming to be the only European major to keep its payout promise.  “I think that once again, in what was an extremely volatile and adverse year in 2020 . . . we have shown that in the face of that we can resist, resist better than our competitors,” said Patrick Pouyanné, Total’s chief executive, on Tuesday. 

Along with a big cash crunch and losses, the oil sector is facing tremendous pressure to turn towards more sustainable business models. Total reaffirmed its commitment to a more renewable business mix, saying, “The Group affirms its plan to transform itself into a broad energy company to meet the dual challenge of the energy transition: more energy, less emissions. Thus, the Group’s profile will be transformed over 2020-30 decade: the growth of energy production will be based on two pillars, LNG and Renewables & Electricity, while oil products are expecting to fall from 55% to 30% of sales.

Total has already made a concerted push into renewables, committing 20 percent of its planned $12 billion in investments this year into greener energy.

Total recently bought a $2.5-billion stake of 20 percent in the world’s largest solar farm developer Adani Green Energy. Total has also won offshore wind development leases in the UK earlier this month. The move is in consonance with Total’s shift towards clean energy

Total suffered an “exceptional asset impairment” of $10 billion, notably on Canadian oil sands assets, that it had committed to in 2020. 

The French group’s fourth-quarter earnings have shown a tremendous improvement as oil prices stabilized to around $40 a barrel. Adjusted net income came in at $1.3bn for the quarter, beating analyst expectations of about $1.1 billion but still down 59 percent year on year.  

But a depressed economy and squeezed refining margins ate away at any improvement brought in by improved crude oil prices. “In a quarter of volatile results and disappointing cash flow for the supermajors, Total delivers a good set of numbers,” said Giacomo Romeo at Jefferies. 

The group is hopeful that an end of the pandemic this year will bring in glad tidings and the old production would get stabler, benefiting from the resumption of production in Libya. The company is considering cutting operational costs by another $500 million in 2021 on top of the $1.1 billion cuts it implemented last year.

Subscribe to the nation’s fastest-growing CEO magazine to get the latest business news delivered to your inbox.

Anna Domanska
Anna Domanska is an Industry Leaders Magazine author possessing wide-range of knowledge for Business News. She is an avid reader and writer of Business and CEO Magazines and a rigorous follower of Business Leaders.

Recent Posts

Some Microsoft employees stayed at data centers during Pandemic to keep all systems going

Some Microsoft employees stayed at data centers during Pandemic to keep all systems going

The Covid-19 pandemic ravaging the world for more than a year has forced companies and organizations to find viable solutions to keep the business going. Most found a solution in w
2 days ago
Meme stocks frenzy and 3 companies to follow

Meme stocks frenzy and 3 companies to follow

The doom and gloom about the stock market that has been predicted since the pandemic started has abated somewhat with the resilience shown by investors (helped by low-interest rate
2 days ago
US Space Force allows repurposed SpaceX rocket to launch GPS satellite

US Space Force allows repurposed SpaceX rocket to launch GPS satellite

A GPS navigation satellite built by Lockheed Martin is set to ride a reused SpaceX booster on a launch from Cape Canaveral, Florida, Thursday. It will be the first time a military
2 days ago
Disney boss says 40 pc ad revenue went to streaming sites, no plans of ad supported Disney+

Disney boss says 40 pc ad revenue went to streaming sites, no plans of ad supported Disney+

Walt Disney CEO Bob Chapel says the company’s advertising revenue for the upcoming fall television season was strong and went up by “double-digits” compared to 2019.
4 days ago
BlackRock ETFs breach $3 trillion mark in May

BlackRock ETFs breach $3 trillion mark in May

BlackRocks’ exchange-traded fund crossed $3 trillion for the first time in May, in sync with the ETF industry’s race to an all-time high of $9 trillion.
4 days ago
Flagship Pioneering, investor in Moderna raises $3.4 billion funds

Flagship Pioneering, investor in Moderna raises $3.4 billion funds

Flagship Pioneering, the bioplatform company, and the venture capital investor in Moderna, today announced that it had raised additional funding of $2.23 billion, which brings its
5 days ago