ByTsvetana Paraskova– Feb 05, 2025, 5:40 AM CST
Strong LNG trading helped TotalEnergies (NYSE: TTE) book consensus-beating earnings for the fourth quarter of 2024 despite weakening refining margins and lower oil prices.
The French supermajor on Wednesday reported adjusted net income of $4.4 billion for Q4, up by 8% compared to the third quarter, thanks to strong performance in its Integrated LNG and Integrated Power divisions.
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TotalEnergies previewed last month that its fourth-quarter results would benefit from higher LNG production and prices and stronger gas trading.
While lower than the profit for the same period of 2023, TotalEnergies’ fourth-quarter earnings beat the analyst consensus estimate of $4.2 billion.
Cash flow from operations also rose sequentially in the fourth quarter, by 5% to $7.2 billion.
For the full year, TotalEnergies reported adjusted net income of $18.3 billion, down by 21% from 2023, and cash flow of $29.9 billion, down by 17%, “in a softer environment mainly affected by a sharp decline in refining margins, after two exceptional years,” CEO Patrick Pouyanné said in a statement.
“Integrated LNG results meaningfully increased sequentially with adjusted net operating income and cash flow of $1.4 billion, up 35% and 63%, respectively, compared to the third quarter, driven by 6% production growth, average LNG prices above $10/Mbtu and LNG trading performance back to the level of the fourth quarter 2023, taking advantage of higher market volatility,” the executive added.
But the downstream division saw significantly lower profits in 2024 compared to 2023 due to a 44% plunge in European refining margins and downgraded operations in some units.
Despite the weaker profits for 2024, TotalEnergies’s board will propose a 7% increase of the 2024 dividend compared to 2023. The board also confirmed a shareholder return policy for 2025 targeting more than 40% of CFFO handed as payout to shareholders. The company also plans $2 billion of share buybacks per quarter in 2025, “a level which will be pursued under reasonable market conditions.”
Last week, another European supermajor, Shell, raised its fourth-quarter dividend by 4% and announced a new share buyback program even as it reported earnings below expectations for the last quarter of 2024. Declining refining margins hit the earnings of Big Oil in 2024, including those of U.S. supermajors ExxonMobil and Chevron.
By Tsvetana Paraskova for Oilprice.com
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