TotalEnergies (NYSE: TTE) saw its first-quarter earnings decline amid weak refining margins, but the French supermajor remains confident it can sustain $2-billion buybacks in the second quarter despite lower oil prices.
TotalEnergies reported on Wednesday an adjusted net income of $4.2 billion for the first quarter, down by 5% from the fourth quarter of 2024 and down by 18% from a year earlier.
As previously advised, TotalEnergies raised its first-quarter oil and gas production by 4% on the year, to the top end of its 2.5 to 2.55 million barrels of oil equivalent per day (boe/d) range. At 2.55 million boe/d, the group’s output increased thanks to the continued ramp-up of projects in Brazil, the United States, Malaysia, Argentina, and Denmark.
“The start-ups of the Ballymore offshore field in the United States during the second quarter and Mero-4 in Brazil expected in the third quarter will continue to add high-margin barrels and further reinforce the Company’s 2025 hydrocarbon production growth objective of more than 3%,” chief executive Patrick Pouyanné said in a statement.
TotalEnergies reported strong results in the Exploration & Production division, with adjusted net operating income of $2.5 billion and cash flow of $4.3 billion, up by 6% and 9% quarter-to-quarter, respectively.
In LNG, TotalEnergies – the world’s second-largest LNG trader after Shell – noted that the gas trading business “encountered the unexpected downturn of European markets following new heightened uncertainties on the evolution of the Russian-Ukrainian conflict.”
The downstream division was the drag on the company’s Q1 results, with weak refining margins and declining petrochemical and biofuel margins in Europe. Downstream posted an adjusted net operating income of $500 million, and a cash flow of $1.1 billion, below expectations, due to operational performance at Donges and Port Arthur, Pouyanné said.
Nevertheless, TotalEnergies expressed confidence it will reach its 2025 underlying growth objective. Also taking into account the strength of its balance sheet, the company’s board of directors confirmed the distribution of the first interim dividend of €0.85/share for fiscal year 2025, up by 7.6% from 2024 and in line with the dividend growth guidance announced in February. The board also decided to “continue share buybacks for up to $2 billion in the second quarter despite a softening price environment with Brent below $70/b since the beginning of April and an uncertain geopolitical and macroeconomic context,” Pouyanné added.
TotalEnergies joins Eni and Equinor in reaffirming its shareholder distribution policy despite rising market uncertainties and falling oil prices.
UK’s BP, however, on Tuesday reduced by $1 billion its quarterly share buyback program after reporting weaker-than-expected earnings, significantly lower cash flow, and rising net debt for the first quarter.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com
- Crude Oil Inventory Gain Outshone By Product Draws
- Oil Prices Drop as Supply Concerns Continue
- World Bank: Get Ready for a Commodity Price Freefall
