TotalEnergies exceeds expectations in the fourth quarter profit and signals a stronger 2025
TotalEnergies, the French oil giant, beat the expectations for its fourth-quarter earnings Wednesday. Higher trading profits on the gas market helped to offset the impact of low fuel prices and weak demand.
The adjusted net income for 2024's final quarter was $4.4 billion. This is down 15% on the $5.2 billion of the previous year, but still slightly above the $4.1 billion in the third quarter. According to a LSEG analyst consensus, the results exceeded expectations of $4.2 billion.
The company expects to see higher gas prices, production upstream and sales of power in early 2025. At 0842 GMT, its shares were up by 1.3%.
At a recent press conference, CEO Patrick Pouyanne stated that he expected the company to continue to invest in renewable energy sources in the U.S. He also added that the exports of U.S. Liquefied Natural Gas are likely to double in the next few years.
The French company is the U.S. largest LNG exporter, with over 10 million tons of LNG under contract.
Total has announced an increase of 7% in its dividend for 2024, to 3,22 euros per share. It also confirmed that it will buy back shares at a rate of $2 billion each quarter by 2025.
RBC analyst Biraj Burkhataria stated that Total's dividend growth announcement was "higher" than expected. He also added that the reported gearing of 8% "should ease any concerns about debt levels". Western oil majors face reduced economic activity, and new African and Asian refining facilities are causing them to compete with each other. This has caused the profit margins of converting crude oil to fuel products last year to fall. This trend is expected continue into 2025.
Total's European refinery margin for the fourth-quarter was $25.90 per ton, half of the $50.10 realized by late 2023. Meanwhile, crude oil prices are nearly $10 lower per barrel than last year.
Shell, Chevron, and ExxonMobil reported their fourth-quarter results last week. All three companies were hit hard by the decline in refining profit margins.
Total ended the year with a positive note, thanks to its integrated division of LNG. The traders were able to capture higher profits because of market volatility. This resulted in a 35% increase in earnings to $1.4 billion.
(source: Reuters)
