French oil giant TotalEnergies posted a drop in its second-quarter profits on Thursday, joining other oil majors in slumped earnings amid falling energy prices.
The company recorded $5.6bn (€5.09bn) in net income, a drop from the $6.5bn posted in the first quarter of this year and almost half the $9.8bn posted during the same period last year amid record profits for the oil and gas industry.
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Profits fall just shy of analyst expectations, which predicted a net income of $5.2bn. As expected, the company confirmed in its results documents some $2bn in share buybacks for this year’s third quarter.
Exploration and production reported an adjusted net operating income of $2.3bn and cash flow of $4.4bn, with the company’s overall production of 2.5 million barrels of oil equivalent per day up 2% year-on-year. This uptick was attributed to new project start-ups such as the Ikike field in Nigeria, Mero 1 in Brazil and Block 10 in Oman.
The company’s liquid natural gas (LNG) business posted cash flow of $1.8bn, with an adjusted net operating income of $1.3bn, reflecting falling gas prices.
TotalEnergies CEO Patrick Pouanne said at a board meeting on Wednesday that results came in a “favourable by softening oil and gas environment”.
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By GlobalDataThe company’s average margin on oil refining more than halved to $42.7 per tonne compared with this year’s first quarter and was down more than two-thirds compared with the same time last year.
The company said European refining was impacted by higher Chinese exports and a quicker-than-expected reorganisation of Russian exports following EU sanctions on oil and oil products imposed at the start of this year.
Also in this quarter’s highlights was the recent acquisition of renewables producer Total Eren by TotalEnergies, announced earlier this week. The company’s power business saw its net operating income cash flow increase to $450m and $491m, respectively, for the quarter.
