TotalEnergies' 1Q cash flow boosts investment, dividend
TotalEnergies hinted today at the prospect of opportunistic acquisitions and confirmed a dividend increase of 5pc and further share buybacks, after strong cash flow generation during the first quarter of this year.
"The board of directors decided to give priority to countercyclical opportunities to accelerate the company's transformation," said chief executive Patrick Pouyanne.
In its results the French firm reported adjusted net income of $9.0bn that beat the analysts' consensus estimate of $7.4bn. This figure was also three times greater than the year-earlier period and a 32pc improvement on the fourth quarter 2021. Cash flow from operations during the first quarter came in at $7.6bn, was a 36pc improvement on a year earlier but down on the immediately preceding quarter's $11.6bn.
But the company also reported a record $4.1bn writedown, mainly related to its 10pc stake in Russia's 19.8mn t/yr Arctic LNG 2 project. Its net profit fell to $4.9bn from $5.8bn a year earlier.
TotalEnergies' oil and gas production was flat during the quarter at 2.84mn b/d of oil equivalent (boe/d) — 1pc down on the year-earlier period and only marginally lower than the 2.85mn boe/d reported for the fourth quarter 2021.
The profit performance was led by its Refining & Chemicals and Integrated Gas, Renewables & Power (iGRP) business segments. The former's adjusted net operating income rose more than four fold from a year earlier to $1.12bn. This was due to higher distillate margins in Europe arising from lower imports of Russian products, as well as what it described as "overperformance" by its crude and products trading activities.
The iGRP segment's adjusted net operating income rose by 11pc from the preceding quarter to $3.05bn, which was more than thre times greater than for first-quarter 2021. TotalEnergies attributed this to higher LNG prices and a "very good performance" from its gas, LNG and electricity trading activities.
TotalEnergies said it would distribute a first 2022 interim dividend of €0.69/share — representing an increase of 5pc — and it would buy back up to $3bn of its shares in the first half of the year. It said it will maintain "capital discipline" with net investments this year towards $15bn — the top end of its $13bn-15bn capital expenditure budget — with 25pc of this being invested in renewables and electricity.
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