TotalEnergies Q3 Income Hits Three-year Low

Wedoany.com Report-Oct 31 , French oil major TotalEnergies reported third-quarter adjusted net income at a three-year low of $4.1 billion on Thursday, slightly missing expectations as refining margins and upstream outages dragged down earnings.

Adjusted net income was down 37% from a year earlier and 12.7% lower from the previous quarter's $4.7 billion. The result just missed analyst expectations of $4.2 billion, Reuters reported.

Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) fell 23.6% year on year to $10 billion.

Earlier this month, TotalEnergies warned its financial results would take a hit as its margin for converting crude oil into refined fuels tumbled 65%.

Global refining margins have dropped sharply in recent months in the face of weaker economies and the start-up of several new refineries in Asia and Africa, while oil prices fell 17% in the quarter - the largest quarterly decline in a year - on worries about the global oil demand outlook.

TotalEnergies shares were down 1.5% in early trading. RBC analyst Biraj Borkhataria said Total reported "weaker cash generation relative to expectations", and that while "divisional estimates were broadly in line with consensus ... estimates have been falling following the recent trading update."

The company confirmed $2 billion in share buybacks for the fourth quarter and decided a third interim dividend of 0.79 euros per share for 2024.

In addition to a 83% drop in quarterly refining and chemicals division profits year-on-year, Total's integrated LNG division also made 21% less than the third quarter last year, with the company citing low gas market volatility as a hamper on trading profits. Integrated power, which includes renewables, was down 4% from a year ago.

TotalEnergies took a $1.1 billion impairment related to the August bankruptcy filing of US subsidiary SunPower, and its exit of several South African offshore blocks.

Quarterly hydrocarbon production of 2.4 million barrels of oil-equivalent per day was at the low end of guidance given at half year due to security-related disruptions in Libya and an outage at the Ichthys LNG plant in Australia.