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Total Profit Increases 35 Percent in 2Q

Posted on: Thursday, 4 August 2005, 15:01 CDT

PARIS - French oil company Total SA said Thursday its second-quarter profit surged 35 percent as a rise in crude oil prices more than offset a decline in production.

Total, one of the world's largest oil companies, said net earnings rose to 3.08 billion euros ($3.79 billion) in the quarter, from 2.28 billion euros a year earlier.

Total also announced it had withdrawn its bid for a blocking stake in Novatek, Russia's biggest gas producer after state-controlled monopoly Gazprom, citing regulatory delays.

The company's shares fell 1.3 percent to close at 208.60 euros ($256.97) in Paris trading.

Total credited a strong refining margin and a further recovery in its petrochemicals operations for the jump in profit.

Stripping out a restructuring charge for chemicals operation and an amortization charge stemming from the 54 billion euros merger of Sanofi-Synthelabo SA and Aventis SA a year ago, adjusted net profit rose 33 percent to 2.91 billion euros ($3.58 billion) from 2.19 billion euros in the first quarter of 2004.

Total holds a 13 percent interest in the combined company - Sanofi Aventis SA. The adjusted net profit came in below an average of analyst forecast of 3.01 billion euros ($3.7 billion).

Operating profit rose 37 percent to 5.54 billion euros ($6.82 billion) from 4.03 billion euros, while revenue climbed 14 percent to 33.07 billion euros ($40.7 billion) from 29.13 billion euros.

Total's numbers were reported under the new International Financial Reporting Standards introduced this year.

Operating profit at its petrochemicals division more than doubled to 381 million euros ($468 million) from 148 million euros, reflecting the continued recovery of the business.

Production of oil and natural gas fell 4 percent to an average of 2.51 million barrels a day in the second quarter from 2.60 million barrels a day in the same period of 2004.

The company attributed the drop to maintenance operations in Norway and some contracts entitling it to fewer barrels when prices climb above a certain level.

Total also announced the withdrawal of its $1 billion bid for the Novatek stake, which had been agreed to last year.

"As a result of the numerous delays, which are difficult to understand, that have occurred since the filing of the application in September 2004, Total has just informed the Russian antitrust authorities of its decision to withdraw its application concerning the acquisition of 25 percent plus one share of Novatek," the report said.

Novatek sold a combined 19 percent stake in an initial public offering last month.

Source: Associated Press/AP Online

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