TotalEnergies SE stuck to plans for shareholder payouts and capital spending even as second-quarter profit missed estimates.
Oil and gas companies have seen earnings retreat from last year’s highs as the market chaos unleashed by Russia’s war in Ukraine eased, pulling prices down. Yet they’re still channeling generous sums to shareholders in a bid to keep them on side as some investors retreat from fossil fuels.
Total’s adjusted net income slumped 49% from a year earlier to $4.96 billion, the French major said Thursday, citing lower natural gas prices and dwindling refining margins. That missed analyst estimates of $5.34 billion.
The shares were little changed at 10:23 a.m. in Paris, and are down about 8% this year. Shell Plc, which also reported lower profit Thursday, traded down 1.9% in London.
Total is boosting investment in renewables and gas while cutting exposure to petroleum with sales of Canadian oil-sands assets and some of its European service stations. It recently took a stake in a liquefied natural gas terminal to be built in Texas, acquired wind leases in Germany, bought out a French clean-power firm and agreed on a $10 billion oil, gas and power project in Iraq.
Cash from operations shrank 37% to $15 billion in the first half due to falling hydrocarbon prices. But cash at Total’s power division neared $1 billion, more than it generated during the whole of 2022, Chief Executive Officer Patrick Pouyanne said. The LNG business posted lower quarterly earnings amid weaker European demand and “softer trading results in less volatile markets.”
The company bought back $2 billion of its shares in the first and second quarters and plans to repurchase the same amount in the third. It announced an interim dividend of €0.74 a share, unchanged from the first quarter and up 7.3% from a year earlier.
As Total pursues the divestment of its Canadian oil business, the company will allocate at least 40% of cash flow from operations this year to shareholders — the high end of a previously announced range — it reiterated Thursday.
The firm also kept its plan for $16 billion to $18 billion of capital expenditure, including $5 billion in low-carbon energies such as wind, solar and biomethane.
(Updates with shares in fourth paragraph.)