High gas prices boost TotalEnergies' 3Q profits

TotalEnergies' third-quarter profits rose sharply, partially thanks to the soaring price of gas, which it expects to remain at high levels until the second quarter of next year.

The firm reported a profit, including inventory effects, of $4.65bn in the July-September period, compared with $202mn a year earlier, and more than double the level of the second quarter.

"The global economic recovery, notably in Asia, drove all energy prices sharply higher in the third quarter," chief executive Patrick Pouyanne said. TotalEnergies' integrated gas, renewables and power segment made an adjusted net profit of $1.6bn and had cash flow of $1.7bn in the quarter, both record highs, boosted by what it called an "outperformance" of its trading unit.

"Barring an exceptionally mild winter, the low inventory level for gas and expected sustained demand are likely to keep gas prices in Europe and Asia at high levels until the second quarter 2022," the firm said.

TotalEnergies' third-quarter oil and gas production rose by 4pc on the year to 2.814mn b/d of oil equivalent (boe/d) on project start ups and ramp ups at North Russkoye in Russia and Iara in Brazil, the resumption of output in Libya, the increase in gas demand, and the higher Opec+ production quotas.

"Given the outlook for Opec+ quotas and seasonal gas demand in the fourth quarter of 2021, TotalEnergies expects fourth-quarter 2021 hydrocarbon production to be in the range of 2.85mn-2.9mn boe/d," the firm said. It expects its average LNG sales price to rise to over $12/mn Btu in the fourth quarter, from $9.10/mn Btu in prior three months.

TotalEnergies' refinery throughput reached 1.225mn b/d in July-September, up from 1.212mn b/d a year earlier as margins improved in Europe. Utilisation rates reached 69pc, up from 57pc a year earlier.

The firm's net debt gearing — including leases — fell to 22.1pc at the end of September from 22.9pc at the end of June. Excluding leases, it was 17.7pc as of 30 September, down from 18.5pc three months earlier and below the company's target of 20pc.

TotalEnergies kept its third interim dividend stable for 2021 at €0.66/share to be paid in April, and confirmed its previously-announced plan to buy back $1.5bn worth of shares in the fourth quarter.

By Rowena Edwards