Commenting on the results, Christophe de Margerie chief executive officer said:
“In the first quarter 2009, the Brent oil price fell by more than 50% compared to the first quarter 2008 and 20% compared to the fourth quarter 2008. Supported by OPEC production cuts, Brent has traded around the 40-50 $/b range. The price of natural gas declined significantly in the main markets. The European refining margin indicator, while higher than in the previous year, deteriorated progressively. The environment for chemicals suffered the full impact of the decline in demand. The dollar averaged 1.30 $/EUR.”
“In an environment dominated by global recession, our first quarter 2009 adjusted net income was $2.8 billion, a decrease of 44% compared to the first quarter 2008, the most limited decrease among the majors. The group invested $3.7 billion, a pace comparable to the same period in 2008, and generated $2 billion of net cash flow. The net-debt-to-equity ratio was 19% at March 31, 2009.”
“These results demonstrate the resilience and financial strength of the group and its capacity to pursue its development in a weak environment.”
“Total’s hydrocarbon production decreased, essentially due to the impact of OPEC reductions. The giant Akpo field in deep-offshore Nigeria started up at the end of the quarter and will contribute significantly to production for the rest of the year. Development is ongoing for four additional major projects for the group in 2009, Tahiti in the Gulf of Mexico, Yemen LNG, Tombua Landana in Angola and Qatargas II train B, which should start up between now and the end of the year.”
“While keeping its commitment to safety and the environment, Total initiated plans in all of its segments to reduce costs and optimize pending projects. In addition, the group announced a plan during the quarter to modernize its refining and petrochemicals activities in France within the framework of its strategy to adapt its industrial sites.”
“In addition, the group continued to seize targeted opportunities to strengthen its portfolio for the long term. Notably, Total entered into a strategic alliance for exploration in the Gulf of Mexico. This venture, along with recent contract extensions in key countries, reaffirms the group’s confidence in its model for organic growth to create value over the long term.”
“Total, as a leading player in most countries where it operates, continues, more than ever, to participate in the development of local economies. Our financial strength and discipline allow us to pursue our strategy of maintaining a strong investment program, an ongoing level of recruitment, and socially responsible actions to sustain our model for growth.”
Operating income:
In the first quarter 2009, the Brent price averaged $44.5 per barrel, a decrease of 54% compared to the first quarter 2008 and 20% compared to the fourth quarter 2008. The European refining margin indicator averaged $34.7 per tonne for the first quarter 2009; an increase compared to the first quarter 2008, but was poor in the month of March. Petrochemical margins continued to be affected by weak demand.
The euro-dollar exchange rate averaged $1.30 per euro in the first quarter 2009 compared to $1.50 per euro in the first quarter 2008 and $1.32 per euro in the fourth quarter 2008.
In this environment, the adjusted operating income from the business segments was $3,615 million, a decrease of 49% compared to the first quarter 2008. The decrease was 56%.
The effective tax rate for the business segments was 52% in the first quarter 2009 compared to 59% in the first quarter 2008, with the lower rate resulting mainly from the decrease in the share of the Upstream segment in adjusted operating income from business segments and the decrease in the effective tax rate for the Upstream segment. The effective tax rate for the business segments was 51% in the fourth quarter 2008.
Adjusted net operating income from the business segments was EUR2,050 million compared to EUR3,200 million in the first quarter 2008, a decrease of 36%.
The smaller decrease, relative to the decrease in adjusted operating income, is essentially due to the lower effective tax rate between the two quarters.
Adjusted net operating income from the business segments was $2.7 billion, a decrease of 44% compared to the first quarter 2008 and 31% compared to the fourth quarter 2008.
Net income:
Adjusted net income was EUR2,113 million compared to EUR3,254 million in the first quarter 2008, a decrease of 35%. Expressed in dollars, adjusted net income decreased by 44%.
This excludes the after-tax inventory effect, special items, and the group’s equity share of the amortization of intangibles related to the Sanofi-Aventis merger.
— The after-tax inventory effect had a positive impact on net income of EUR327 million in the first quarter 2009 and EUR274 million in the first quarter 2008
— Special items had a negative impact on net income of EUR87 million in the first quarter 2009, and were comprised mainly of provisions in the downstream and chemicals segments. Special items had a positive impact on net income of EUR145 million in the first quarter 2008
— The group’s share of the amortization of intangibles related to the Sanofi-Aventis merger had a negative impact on net income of EUR63 million in the first quarter 2009 and EUR71 million in the first quarter 2008
Reported net income (group share) was EUR2,290 million compared to EUR3,602 million in the first quarter 2008.
The effective tax rate for the group was 52% in the first quarter 2009.
The group did not buy back shares in the first quarter 2009.
Adjusted fully-diluted earnings per share, based on 2,235.4 million fully-diluted weighted-average shares, was EUR0.95 compared to EUR1.44 in the first quarter 2008, a decrease of 35%.
Adjusted fully-diluted earnings per share fell by 43% to $1.23.
Investments – divestments
Investments, excluding acquisitions and including net investments in equity affiliates and non-consolidated companies, were EUR2.7 billion ($3.6 billion) in the first quarter 2009 compared to EUR2.5 billion ($3.7 billion) in the first quarter 2008.
Acquisitions were EUR93 million in the first quarter 2009.
Asset sales in the first quarter 2009 were EUR359 million, consisting essentially of Sanofi-Aventis shares.
Net investments were $3.2 billion in the first quarter 2009 compared to $3.7 billion in the first quarter 2008.
Cash flow:
Cash flow from operating activities was EUR3,994 million in the first quarter 2009, a decrease of 25% compared to the first quarter 2008.
Adjusted cash flow was EUR3,372 million, a decrease of 22%.
Adjusted cash flow was $4.4 billion, a decrease of 32%.
Net cash flow for the group was EUR1,531 million compared to EUR2,871 million in the first quarter 2008.
Net cash flow for the group was $2 billion in the first quarter 2009.
Production:
In the first quarter 2009, hydrocarbon production was 2,322 thousand barrels of oil equivalent per day (kboe/d), a decrease of close to 4.5% compared to the first quarter 2008, mainly as a result of :
— 4% for OPEC reductions,
— 1.5% related to disruptions in Nigeria due to security issues, notably with the shutdown of the Soku gas plant,
— 1.5% for portfolio changes, mainly the dilution of PetroCede o in Venezuela,
— 2.5% for the price effect12,
The start-up of new projects, such as Jura in the North Sea and Moho Bilondo in Congo, offsets the natural decline.
