French oil giant Total SA on Friday said that 2012 started favorably and reiterated its output guidance, reporting a 12.8% increase in net income in the fourth quarter on the strength of high oil prices and in spite of weak downstream markets and stable output.
The group confirmed it targets a 2.5% increase in output on average per year from 2012 to 2015. But some investors said the group's plans lacked detail on how it would attain its targets.
In the European morning, shares in Total were trading down 1.2% to €40.65 while the CAC-40 benchmark index was down 0.75%.
Total reported fourth quarter net profit of €2.29 billion ($3.04 billion), up from €2.03 billion a year earlier. The group's adjusted net income, an earnings benchmark that strips out non-performance-related inputs that is closely watched by investors, came in slightly above expectations.
"In a period of economic slowdown, ongoing tensions on the global oil supply supported the Brent price above $110 per barrel in 2011. This environment has been favorable for the upstream, but it was difficult for the downstream activities, notably in Europe," Total's Chairman and Chief Executive Christophe de Margerie said.
The group's hydrocarbon output was stable in the last quarter of 2011 from a year earlier, at 2.384 million barrels of oil equivalent per day (mboe/d) from 2.387 mboe/d a year earlier.
Total has seen its 2011 oil output limited by the Libyan outages, but Libyan output has been coming back and other big projects, such as the ramp-up of the Pazflor deep-offshore Angolan field, has also contributed to higher volumes.
In 2012, output is expected to grow 2% to 3%, depending on the evolution of the situations in Libya and Syria, it said.
But the lack of further detail on Total's output projections is a disappointment for investors, said Alphavalue trading firm's analysts, who rate the company at "Reduce."
Total, Europe's third-largest oil company, said the year started favorably for the upstream business due to continued high oil prices while it noted that refining margins improved "appreciably" after a sharp fall in 2011. Earnings for European and U.S. oil majors have been badly hit by weak refining in the most recent quarter.
The group plans to invest a net amount of $20 billion in 2012, after having invested $22.2 billion in 2011, which was 40% higher than the 2010 level.
Around 80% of the group's investments will be focused in exploration and production, Total's Chief Financial officer Patrick de la Chevardiere said.
Over the 2012-2014 period, the group plans to invest an average net amount of $23 billion per year.
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