Creditreform Rating has revised the outlook for the corporate issuer rating of Total S.A. and changed it to negative from stable. The main reasons behind this decision are the drop in oil prices combined with the decline in refining margins, as well as the overall economic and social implications of the coronavirus pandemic, with a looming global economic slowdown. Creditreform Rating affirms the rating at AA-, but expects a deterioration of the financial metrics of Total if these effects persist.
Creditreform Rating has carried out an unsolicited rating of Total S.A. The rating has been set to AA- with stable outlook. The current rating of AA- attests Total S.A. a very high level of creditworthiness, which represents a low default risk. The rating result of Total S.A. reflects its large size, stable market position, sustainably strong earnings capacity, sound investment and financial policies, as well as its solid liquidity. The Company´s activities comprise the upstream and downstream businesses and are geographically very well-diversified, whereby the processing facilities and distribution of petroleum products are chiefly concentrated in Europe. In the 2018 financial year, as well as in 2019, the Group managed to significantly increase its production based on a range of new projects and start-ups in the Exploration & Production segment, while focusing on maintaining a solid pre-dividend breakeven. The downstream activities Refining & Chemicals and Marketing & Services contribute to the positive results, generating additional cash flows and helping to offset negative developments in crude oil and natural gas prices. The Company has been preparing to the global shift in energy mix and expanding into relatively new businesses, such as low carbon electricity generation, energy efficiency projects and especially LNG.