TOTAL NET INCOME $13.6 BLN UP 28%
TOTAL - Fourth quarter and full-year 2018 results
Total's Board of Directors met on February 6, 2019, and approved the Group's 2018 accounts. Commenting on the results, Chairman and CEO Patrick Pouyanné said:
"Benefiting from the rise of oil prices to $71/b on average in 2018 compared to $54/b in 2017, while remaining volatile, the Group reported adjusted net income of $13.6 billion in 2018, an increase of 28%, a return on average capital employed close to 12%, the highest among the majors, and a pre-dividend breakeven below 30 $/b.
These excellent results reflect the strong growth of more than 8% for the Group's hydrocarbon production, which reached a record level of 2.8 Mboe/d in 2018 and led to a 71% increase in Exploration & Production's adjusted net operating income. The year was highlighted by the start-up of Ichthys in Australia, Yamal LNG in Russia, deep-water projects Kaombo North in Angola and Egina in Nigeria, as well as the counter-cyclical acquisitions of Maersk Oil and new offshore licenses in the UAE.
In addition, the Group maintained its financial discipline. Net investments were $15.6 billion in 2018, in line with its objective, and $4.2 billion in cost reduction was achieved.
Debt-adjusted cash flow (DACF) was $26 billion in 2018, driven largely by the 31% increase in cash flow from Exploration & Production. The Group's balance sheet was solid with a gearing ratio of 15.5%, below the target limit of 20%.
The Group is continuing to expand along the value chain of integrated gas and low-carbon electricity. With its acquisition of Engie's LNG assets Total is the second largest publicly-traded player in the LNG business, and its position will be strengthened with the 2019 start-up of the Cameron LNG project. In addition, the Group accelerated its growth in low-carbon electricity, notably with the acquisition of Direct Energie.
In an environment of lower European refining margins, the Downstream relied on the availability of its units and the diversity of its portfolio to generate $6.5 billion of cash flow and profitability of more than 25%. The Group is continuing to implement its strategy for growth in petrochemicals by launching projects in the US, Saudi Arabia, South Korea and Algeria. Total has also continued to expand Marketing & Services in fast-growing areas, notably in Mexico, Brazil and Angola.
Conforming to the shareholder return policy announced in February 2018, the Group increased the 2018 dividend by 3.2% and bought back $1.5 billion of its shares in 2018. Given the solid financial position, which is benefiting from growing cash flow, the Board of Directors confirmed the shareholder return policy for 2019. It plans to increase the interim dividend by 3.1% to 0.66 euros per share, end the scrip dividend option following the general assembly meeting, and continue the share buyback policy in the amount of $1.5 billion in a 60 $/b environment."
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