TotalEnergies Takes Hit from Weaker Refining Margins, Maintains Dividend

TotalEnergies Takes Hit from Weaker Refining Margins, Maintains Dividend
Earnings per share missed the Zacks Consensus Estimate by 5.4 percent.
Image by Weerapong Khodsom via iStock

TotalEnergies SE on Thursday reported $2.29 billion in net income for the third quarter, down 65.64 percent compared to the same three-month period last year and 39.42 percent quarter-on-quarter, with the company blaming a sharp fall in refining margins and lower oil prices.

Adjusted net income, which by the company’s definition is net income less special items and changes in inventory valuation and fair value, landed at $4.07 billion, down 36.87 percent year-on-year and 12.8 percent against the prior quarter in 2024, TotalEnergies reported on its website.

The adjustments included $1.1 billion in impairments linked to the Chapter 11 bankruptcy filing of joint venture SolarPower Corp., a solar panel maker, in the United States and divestments in South Africa.

The adjusted figure translates to $1.74 per share, missing the Zacks Consensus Estimate — an average of estimates by brokerage analysts — of $1.84 by 5.4 percent.

The French energy major shed 2.94 percent Thursday in Paris, closing at EUR 57.4 ($62.33); on Friday, it opened at EUR 57.53 ($62.48). In New York, it closed Thursday 1.59 percent lower at $62.56.

The board of directors declared $0.79 per share for TotalEnergies’ third interim dividend for 2024, making no change from the previous declarations for the year. The figure represents a 6.8 percent increase compared to 2023.

“In a volatile oil environment with sharply declining refining margins, TotalEnergies demonstrates the resilience of its integrated multi-energy model with $4.1 billion adjusted net income and $6.8 billion CFFO [cash flow from operations] in the third quarter of 2024”, declared chief executive Patrick Pouyanné.  The company noted a 66 percent quarter-on-quarter drop in refining margins in Europe.

TotalEnergies’ exploration and production segment generated $2.48 billion in adjusted net operating profit, down by both prior-year and prior-quarter comparisons. Production fell year-on-year to 1.94 million barrels of oil equivalent a day, stable compared to the second quarter of 2024.

A ramp-up in the second-phase project for Brazil’s Mero field “partially offset unplanned shutdowns in Ichthys LNG [in Australia] and security-related disruptions in Libya”, the quarterly report stated.

The integrated LNG segment had $1.06 billion in adjusted net operating profit, down year-over-year and sequentially “mainly due to lower hydrocarbon production for LNG”.

“Moreover, gas trading did not fully benefit from markets characterized by low volatility”, TotalEnergies added.

Sales of liquefied natural gas dropped year-over-year but increased sequentially to 9.5 million metric tons “notably due to higher spot volumes, in a context of seasonal inventory replenishment”.

Integrated power contributed $485 million, down compared to the third quarter of 2023 and the second quarter of 2024. Net power production totaled 11.1 terawatt hours, up year-on-year and quarter-on-quarter driven by “gas flexible capacities” in the United States.

Downstream, TotalEnergies posted $605 million in adjusted net profit from refining, chemicals and marketing and services, down year-on-year and quarter-on-quarter. Refinery throughput rose year-on-year and quarter-on-quarter thanks to the restart of France’s Donges refinery. Downstream sales fell year-on-year but grew quarter-on-quarter driven by sales in Europe.

To contact the author, email jov.onsat@rigzone.com


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