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Total profit beats forecasts on cost-cutting drive

Oil giant Total reported that net profit fell 2 percent in the second quarter but not as much as predicted by analysts, as the company sped up its cost-cutting drive.

Adjusted net profit came in at $3.085 billion in the second three months of 2015, year-on-year, better than the $2.61 billion figure expected by analysts polled by Reuters. Shares of the Total opened 2.3 percent higher on Wednesday, following the results.

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Revenues fell 29 percent over the period to $44.715 billion, against a backdrop of global lower oil prices, however.

Since last June, oil prices have more than halved from a high of around $114 a barrel to currently trade at $53.06 a barrel for Brent crude.

Total CEO Patrick Pouyanne said that oil prices had affected the results, but productivity had increased.

"Oil prices recovered slightly in the second quarter to about $60/b but remain more than 40 percent lower than a year ago. Despite the sharply lower oil price, Total reported adjusted net income of $3.1 billion, a decrease of only 2 percent compared to the same period last year, thanks to productivity gains in all the business segments," he said in a statement.

Total is not the only oil major to have been hit by the drop in oil prices. On Tuesday, BP reported a second-quarter replacement cost loss of $6.3 billion and warned that low oil prices are here to stay. The replacement cost measure takes into account changes in the price of oil and is used across the industry to report earnings.

Against this backdrop of lower oil prices, Total has moved to cut costs across the business.

In its results statement on Wednesday, the French company said it expected to exceed its cost reduction target of $1.2 billion in 2015, and confirmed a capital expenditure reduction of between $23-24 billion in 2015.

Total's cost-cutting drive includes asset sales, and on Wednesday it announced it was selling 20 percent of its Laggan-Tormore gas field in the Shetland Islands in Scotland to SSE for £565 million ($881 million).