Earnings slide at TotalEnergies as energy prices ease

(Sharecast News) - TotalEnergies posted a decline in earnings on Wednesday, as oil and gas prices came off record highs. Adjusted net income fell 36% in 2023, to $23.2bn, while adjusted earnings before interest, tax, depreciation and amortisation slid 30% to $50m.

In the fourth quarter, net income was $5.2bn, down 19% on the previous three months and 36% year-on-year.

Oil and gas prices surged to record highs after Russia invaded Ukraine, causing profits to rocket across the sector, but have since moderated.

Looking to the current year, Paris-based TotalEnergies noted that Brent prices started 2024 around $80 per barrel "in an uncertain economic environment", including geopolitical tensions in the Middle East.

LNG markets were also likely to "remain in tension" due to limited capacity additions expected in 2024 and growing demand because of lower LNG prices.

The firm added that it expected a return of around 10% on its integrated power division in 2024. Of the forecast $17bn to $18bn net investments in 2024, around $5bn will be dedicated to the unit.

Chief executive Patrick Pouyanne struck an upbeat tone, noting: "In an uncertain environment, TotalEnergies' balanced transition strategy, which combines growth in oil and gas in particular in LNG, and integrated power, delivered strong results in 2023."

The firm also increased its 2023 dividend, proposing a 7.1% hike to €3.01 per share.