Elf cuts budget as profits fall

ELF Aquitaine, the state-controlled French oil company, is cutting capital expenditure in an effort to boost profits, writes Gail Counsell.

Loik Le Floch-Prigent, Elf's chairman, who yesterday revealed net profits for 1992 down 36.7 per cent at Fr6.2bn ( pounds 756m), said he hoped a 10-15 per cent cut in this year's investment budget would mean higher profits, even without an upturn in the world economy.

Like other oil companies, Elf has been hit by a weak oil price, poor refining margins, a falling dollar and declining demand.

Last week, Elf, which owns a quarter of Enterprise, the UK oil company, said its separately quoted Elf Sanofi pharmaceutical arm was buying the couturier Yves Saint Laurent for pounds 400m. Health, where operating income rose 12.5 per cent to Fr1.8bn, was the only one of Elf's four divisions to improve on 1991's performance.