French oil and gas major TotalEnergies raised its dividend and continued share buybacks on Wednesday, despite a 31% drop in its fourth quarter (Q4) earnings.
In its end of year results statement, the company hiked its final quarterly dividend for 2023 to €0.79 ($0.85) per share, up from €0.74 previously, which will see a 7.1% increase in the full-year payout to €3.01 per share.
TotalEnergies said its interim dividend for this year will also be €0.79 per share, and that it has completed $9bn in buybacks. Of this, $1.5bn was linked to the sale of its Canadian assets to Suncor, a $1.3bn deal that went through at the end of November.
The company’s adjusted net income for Q4 was $5.2bn, down 24% from $6.5bn in the previous quarter and $7.6bn year-on-year. This falls just shy of analysts’ average forecasts of $5.4bn, according to data from the London Stock Exchange Group.
Earnings before interest, taxes, depreciation and amortization (EBITDA) ended on $11.7bn for the quarter, down 27% year-on-year. TotalEnergies’ combined production of oil and gas came in at 2.483 million barrels per day, down 12% year-on-year.
Its adjusted net income for 2023 fell 36% from its 2022 profits to $23.2bn. EBITDA was down for the year to $50bn, down 30% year-on-year.
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TotalEnergies said the slump is due to lower oil and gas prices and lower refining margins compared with the “exceptional” environment seen in 2022, when the oil and gas industry saw record profits following Russia’s invasion of Ukraine and the subsequent global energy crisis. CEO Patrick Pouyanne said “robust” performance in its liquefied natural gas (LNG) operations offset the 2023 downturn somewhat.
In its outlook for 2024, the company warned that a weakness in refining margins would impact its earnings. It expects new investments to be between $17bn and $18bn, of which $5bn will be dedicated to its integrated power business, which includes renewables, battery storage and natural gas.
In a results presentation, Pouyanne emphasised the company’s LNG successes and said there are strong opportunities in Texas, US, for the company’s renewables business and the development of battery storage.
However, the focus for the company will remain on hydrocarbons despite international calls to phase out fossil fuels immediately. “We will continue to drill,” he said. “A third of investments set aside for 2024 will be dedicated to new petrol and gas projects.”