TotalEnergies felt the effect of lower energy prices on its profitability in the second quarter, mitigated somewhat by a 2.5pc increase in production.
The company said today its second-quarter profit fell by 29pc from a year earlier to $2.69bn, while its cash flow from operations — excluding working capital movements — came in 15pc lower at $6.6bn. During the period the price of Brent crude averaged $67.9/bl, against $85/bl in the second quarter 2024, and TotalEnergies cautioned of "abundant supply that is fueled by Opec+'s decision to unwind some voluntary production cuts and weak demand that is linked to the slowdown in global economic growth."
Of TotalEnergies' upstream segments its Integrated LNG business put in the more robust performance. Its adjusted net operating income was down just 9.6pc at $1.04bn, as LNG production increased by nearly 10pc.
Exploration & Production operating profit fell by 26pc to $1.97bn as the segment's production remained flat compared with a year earlier at 1.96mn b/d of oil equivalent (boe/d).
TotalEnergies noted production had benefited from start-ups and ramp-ups at several projects over recent quarters. These include the Mero-2, Mero-3 and Mero-4 developments offshore Brazil, the Fenix field offshore Argentina, Tyra in Denmark, and the Anchor and Ballymore fields in the US Gulf of Mexico.
The company's overall production in the second quarter averaged 2.5mn boe/d, which was up by 2.5pc from 2.44mn boe/d in April-June last year but 2pc lower than in the first quarter of this year. TotalEnergies said it remains on track to deliver its objective of 3pc production growth for 2025.
A recent improvement in performance across TotalEnergies' downstream refining and chemicals businesses failed to translate into a better year-on-year result in the second quarter. The segment's adjusted net operating income of $389mn was well down from $639mn a year earlier. Throughputs in refining were up by 5.2pc on the year and refinery utilisation rate moved up to 90pc from 84pc, but refining margins were down by 21pc on a year earlier. Utilisation of TotalEnergies' chemicals plants was down from a year earlier.
Two segments that enjoyed a earnings boost in the quarter were Marketing & Services and Integrated Power. The downstream retail business' operating profit rose by 8.7pc on the year to $412mn, while Integrated Power's operating profit jumped by 14pc to $574mn.
The latter — which uses a business model of what TotalEnergies calls "clean firm power" with renewable capacity backed by gas-fired plants — saw net power production increase by 28pc on the year to 11.6TWh. This, Total said, was driven by growth in renewable energy production and by a 2024 acquisition of flexible gas capacities in the UK.
TotalEnergies confirmed its second interim dividend for 2025 will be €0.85/share — a 7.6pc increase compared with 2024 — and that it would continue its share buyback programme at a rate of $2bn/quarter.
The company expects capital spending this year will be within a $17bn-17.5bn range.
