TotalEnergies Misses Forecasts As Q2 Earnings Plunge By 49%

TotalEnergies (NYSE: TTE) reported on Thursday an adjusted net income of $4.96 billion for the second quarter of 2023, down by 49% on the year, slightly missing analyst estimates in what the supermajor described as “a favorable but softening environment."

The Q2 earnings missed the average analyst estimate of $5.34 billion and a forecast of $5.12 billion in adjusted earnings compiled by FactSet.

Despite the profit miss, TotalEnergies kept its second 2023 interim dividend of 0.74 euros per share, which is 7.25% higher compared to the three interim dividends paid for 2022 and identical to the final ordinary dividend for fiscal year 2022 and to the first 2023 interim dividend.

TotalEnergies, which is also one of the world’s top LNG traders, booked a lower adjusted net operating income from its integrated LNG business, down by 40% year-on-year. This reflected lower LNG prices – averaging $10 per million British thermal units (MMBtu) for the second quarter – and “softer trading results in less volatile markets.”

TotalEnergies’ adjusted operating income in the downstream also dropped, by 55% year over year, amid lower refining margins.

Despite the lower profits, TotalEnergies’ board of directors confirmed its plans for 2023 to have shareholder distributions of more than 40% of cash flow.

TotalEnergies is joining other major European oil and gas firms in reporting much lower earnings for the second quarter of this year, compared to the first quarter and to the same period of 2022, amid much lower oil and gas prices and lower trading results in a less volatile market.

Shell’s second-quarter adjusted earnings slumped by 47% from the first quarter, as lower oil and gas prices, refining margins, and LNG trading impacted the supermajor’s performance in Q2.

Norway’s Equinor booked 57% lower adjusted earnings for the second quarter compared to the same period of 2022 as oil and natural gas prices slumped from last year’s high levels.

By Tsvetana Paraskova for Oilprice.com

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