TotalEnergies on Thursday reported a 35% fall in third-quarter adjusted net income from last year’s record high, hurt by a drop in energy prices, but it maintained its share buyback operation as conflicts push oil prices back up.
The French energy company’s adjusted net income stood at $6.5 billion, down from the year-earlier $10 billion but just beating an analyst forecast of $6.4 billion, according to a consensus established from LSEG data.
Second quarter adjusted net income was $5 billion.
TotalEnergies confirmed $9 billion in share buybacks for the full year.
Its shares dipped 0.34% in early trading.
Profits were buoyed by the company’s increase in renewable capacity and integration as well as persistently high oil prices despite crude falling from a decade-plus high last year following Russia’s invasion of Ukraine.
Oil prices remained buoyant at around $90 per barrel at the beginning of the fourth quarter, it said.
A 2 million barrel-per-day increase in petroleum products this year was driven by an increase in global fuel demand led by emerging countries, notably due to a recovery in the aviation sector and demand from China’s petrochemical industry, TotalEnergies added.
CEO Patrick Pouyanne said during a conference call with analysts that fuel prices are still expected to be “supported by the action of OPEC+ countries in a tense geopolitical context,” while the conflict between Israel and Hamas makes flows from the Middle East uncertain.
He added, however, that the conflict should not have significant operational consequences for the group’s activities.
Abu Dhabi and Qatar are among the group’s main sources of cash flow in the region, and the situation there is under control, he said, adding that oil prices would continue to rise overall if the situation worsened.
The company also said that its electricity business’ adjusted operating income and cash flow both exceeded $500 million for the first time in the third quarter on increased renewable power generation.
Net power production totaled 8.9 terawatt-hours (TWh), up 4% year-on-year due to increased output from renewables following the full integration renewable company Total Eren and solar build-out in the United States.
Refining throughput fell, however, down 7% year-on-year in the third quarter 2023, as maintenance at the Port Arthur refinery in the United States and the Antwerp refinery in Belgium outweighed an increase in refinery throughput in France.