(News Bulletin 247) – The oil major published its annual and fourth quarter results this Wednesday. The group posts a new profit record, thanks to a basis of comparison distorted by heavy exceptional charges. The stock falls on the Paris Stock Exchange.

After the British major BP, Totalenergies in turn unveils its annual results. Over the whole of 2023, the group led and chaired by Patrick Pouyanné generated a net profit of 21.38 billion dollars, or nearly 20 billion euros.

In 2022, the company had recorded a net profit of 20.53 billion dollars, or approximately 19 billion euros. But this account line had been weighed down by the heavy depreciations passed by the company on its Russian assets ($15 billion), in particular on its 19.4% stake in the Russian natural gas producer Novatek.

By erasing this exceptional charge which somewhat distorts the basis of comparison, Totalenergies’ results fall significantly compared to 2022, due to the drop in market prices of oil and gas.

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The adjusted net income, which excludes exceptional items, stood at $23.218 billion compared to $36.2 billion for 2022, showing a decrease of 36%.

Adjusted gross operating income (Ebitda) fell 30% year-on-year in 2023 to $50 billion. Cash generation, for its part, fell by 21% to $36 billion.

A falling barrel price

“In an uncertain environment, Totalenergies is relying on its balanced transition strategy combining growth in hydrocarbons, particularly LNG (liquefied natural gas), and electricity to post solid results over the year, in line with its objectives” , declared Patrick Pouyanné in a press release.

In the fourth quarter alone, Totalenergies recorded a profit of $5.06 billion and an adjusted profit of $5.23 billion, down 31% year-on-year.

The group suffered from the drop in market prices for hydrocarbons. The average oil price, measured by North Sea Brent, stood at $84.3 per barrel over the last three months of 2023 compared to $88.8 per barrel a year earlier. The average price of gas has been divided by more than two.

“In a declining Brent environment, exploration-production achieved a solid quarter with adjusted net operating income of $2.8 billion and cash flow of $4.7 billion,” commented Patrick Pouyanné.

Towards fewer share buybacks in 2024?

Totalenergies’ adjusted gross operating profit (Ebitda) fell 27% to $11.7 billion. Hydrocarbon production, for its part, fell by 12% in the fourth quarter, to 2,462 thousand barrels of oil equivalent per day. Cash flow (CFFO) was $8.5 billion.

According to a consensus cited by Royal Bank of Canada, analysts were expecting adjusted net income of $5.3 billion and cash flow of $8.6 billion for the latest quarter. “Totalenergies’ results are slightly below consensus expectations,” concludes the Canadian bank.

Concerning its shareholder return policy, Totalenergies indicated that it would propose a dividend of 3.01 euros per share for 2023, an increase of 7.1% over one year.

The oil group will also carry out a $2 billion share buyback program in the first quarter of 2024, “a level which will remain the basis for quarterly buybacks in the current environment”.

In other words, TotalEnergies should repurchase $8 billion of its own shares in 20234 compared to $9 billion in 2023.

Overall, Royal Bank of Canada considers the publication “neutral”, “without fireworks”.

The market chooses to take its profits in view of these results which are slightly lower than expected. The Totalenergies share dropped 1.1% around 9:10 a.m., showing the most pronounced decline in the CAC 40. The day before the stock had been buoyed (+1.8%) by the good results of its British comparable BP.