French energy company TotalEnergies reported a 22% decline in Q1 2024 adjusted net income to $5.1bn on Friday. Higher refining margins partially offset a significant decrease in natural gas profits.
TotalEnergies CEO Patrick Pouyanné said: “In a context of sustained oil prices and refining margins but softening gas prices, the company announced first-quarter 2024 adjusted net income of $5.1bn and cash flow of $8.2bn, in line with its ambitious 2024 objectives.”
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Adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) fell 19% to $11.49bn in Q1 2024, and adjusted net operating income from business segments also fell 20% to $5.6bn from $6.9bn in Q1 2023.
In Q1 2024, adjusted net operating income from the company’s exploration and production business segment was $2.5bn, a 9% decrease from the previous quarter and a 4% decrease from the same quarter last year. According to the company, lower gas prices and production were the primary reasons for this decline.
Cash flow from operations, excluding working capital, was $4.4bn in Q1 2024, a 5% decrease from the previous quarter and a 9% decrease from the same quarter last year.
Hydrocarbon production remained consistent from the previous quarter, with output at 2.46 million barrels of oil equivalent (boe) per day. The recent launch of two liquefied natural gas (LNG) projects, Mero 2 in Brazil and Akpo West in Nigeria, helped balance the impact of the sale of Canadian oil sand assets towards the end of 2023.
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By GlobalData“TotalEnergies further deployed its multi-energy strategy in Oman, launching the fully-electric and very low emissions (3kg/boe) Marsa LNG project that targets in priority the marine fuels market and developing an 800MW portfolio of wind and solar projects, including the 300MW solar project that will supply Marsa LNG,” Pouyanné added.
Integrated LNG achieved adjusted net operating income of $1.2bn and cash flow of $1.3bn for the quarter in a softening and less volatile price environment.
The company has predicted that natural gas profits will increase again during the winter of 2024–25, mainly due to the demand recovery in Asia and the limited availability of new LNG capacity.
The company has estimated that during this winter, the gas price will be above $11 per British Thermal Unit (Btu), compared with the current European price of $8–10/Btu.
Although refining margins were strong earlier in 2024, Total has stated that the current higher oil prices of around $90 per barrel are making refining less profitable. This trend is likely to continue due to geopolitical tensions and decisions made by OPEC+ countries to limit production through quotas.
Strong refining margins led to downstream adjusted net operating income of $1.2bn and cash flow of $1.8bn.
“The company finalised the divestment of part of its European retail network to Alimentation Couche-Tard and advanced its development in sustainable aviation fuels through partnerships with Airbus and SINOPEC,” Pouyanné highlighted in the press release.
