Total’s net quarterly profit comes in 35% lower as Coronavirus sweeps oil demand

Total (EPA: FP) said on Tuesday that its net quarterly profit saw a decline ascribed to historically low oil prices as Coronavirus swept off demand.

At £1.44 billion, Total’s net profit in the first quarter came in 35% lower than £2.25 billion in the same quarter last year. It was, however, stronger than the experts’ forecast of £1.12 billion, as per Refinitiv.

The French oil major also declared 58 pence per share of quarterly dividend on Tuesday that was reported in line with the comparable quarter last year. The company also proposed a new option to enable its investors to receive the final 2019 dividend in cash as usual or in new company shares at a discounted price. Approval for the proposal will be based on voting at Total’s shareholders’ meeting scheduled for 29^th May.

CEO Patrick Pouyanne of Total also commented on Tuesday and said:

“The Group is facing exceptional circumstances. The COVID-19 health crisis, which is affecting the world economy and creating major uncertainties, and the oil market crisis, with the sharp drop in oil prices since March.”

The CEO has agreed to a 25% cut on salary for the rest of 2020.

As Coronavirus pushes the global economy into recession with governments resorting to lockdowns to minimize the fast transmission of the flu-like virus, demand for oil is currently at an all-time low.

Brent crude and WTI futures are around 60% down in 2020

Brent crude that is known as an international benchmark was reported more than 6.6% up in early trading on Tuesday at £23.29 per barrel. U.S West Texas Intermediate, on the other hand, was up roughly 10% to trade at £17.90 per barrel. Owing to rising expectations that demand for fuel will recover in the upcoming months, WTI futures were reported trading higher for the 5^th consecutive day while it was the 6^th session in a row for Brent futures to extend gains.

Despite the recent gains, however, both benchmarks are currently around 60% down year to date.

At £28.79 per share, Total was seen around 7% up in the early session on Tuesday. The oil and gas company, however, is roughly 35% down year to date in the stock market. Its performance in 2019 was reported slightly upbeat with an annual gain of less than 5%.

Total is currently valued at £73.22 billion and has a price to earnings ratio of 8.48.