Petrochemicals dent Total’s profit in Q1
FRENCH oil company Total saw its revenues grow strongly in the first quarter of the year but said on Friday that a drop in European demand for petrochemicals hit profits.
While energy prices have soared amid unrest in the Middle East and tension in Iran, the economic slowdown in Europe has weighed on demand.
Those high prices have buoyed Total’s production business, but other sectors are struggling amid the poor economic environment.
France’s largest company by market value reported on Friday that net profit fell 7 percent to $4.9 billion for January to March.
Revenues, however, rose 11 percent to 51.2 billion euro, beating the average expectation of analysts surveyed by FactSet of 48 billion euro.
Total stock opened significantly lower on Friday, but recouped those losses and was up 0.1 percent by the afternoon.
In addition to weak demand for petrochemicals, the company said the sale of a Spanish oil company decreased refining output. That business was also hurt by a decrease in refining margins.
In the business group that includes refining and chemicals, adjusted net operating income dropped 77 percent over the same quarter last year.
The company has also suffered a couple of natural gas leaks in recent weeks, one in the North Sea and another in Nigeria.
The company said Friday that the process of “killing” the well on the Elgin platform off the coast of Scotland could start as early as the end of next week or the beginning of the following one.
CEO Patrick de la Chevardiere said that it was still unclear when production would restart but that it could be before the end of the year. The loss of production at Elgin, where the leak was discovered March 25, is costing the company $1.5 million each day.