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  • Feb 18th, 2005
  • Comments Off on France’s Total pumps record profits on surging oil
Total SA earned more than a million euros an hour in 2004, as runaway oil prices and strong refining margins lifted it to a record French corporate profit of nearly 100 billion euros ($13 billion) Total, among the most generous in the industry for sharing cash windfalls with shareholders via dividends and share buybacks, said it planned to increase its 2004 dividend by 15 percent to 5.40 euros per share. This beat market expectations of a dividend of 5.20 euros per share.

The stock rose 1.3 percent to 174.80 euros by 1240 GMT, in line with a generally stronger DJ Stoxx European oil and gas index.

"Total reported above consensus numbers and raised the dividend by more than expected, but the results also reflected the pressure on the industry with low reserve replacement and increased capital expenditure guidance," CSFB said in a note. Net profit at the world's fourth largest oil group by market value soared 37 percent to 9.61 billion euros in 2004 while the fourth-quarter figure more than doubled to 3.24 billion euros.

Adjusted for special items, net profit was up 21 percent last year at 8.89 billion euros and 35 percent higher in the fourth quarter at 2.37 billion euros.

Special items boosted quarterly net profit by 871 million euros, including a hefty 1.69 billion euro gain linked to the dilution of Total's stake in French drugmaker Sanofi-Aventis which helped offset asset writedowns in the chemicals business.

Total Chairman Thierry Desmarest told reporters the company had no plans to sell its 13 percent stake in Sanofi - valued at 10 billion euros - in the short-term.

Operating profit rose to 5.08 billion euros in the quarter from 3.21 billion a year ago, also beating a forecast of 4.75 billion.

"The combination of very high oil prices, a sharp increase in refining margins and a rebound in petrochemical margins during the second half of the year allowed the group to reach a new record level of earnings," Desmarest said in a statement.

Copyright Reuters, 2005


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