TotalEnergies Q2 earnings fall 6% on weak refined product and gas demand

By America Hernandez

PARIS -French oil major TotalEnergies (EPA:) reported a 6% fall in second-quarter earnings on Thursday, worse than analysts expected, hurt by lower refined product and gas sales and as European refining margins tumbled.

Adjusted net income for the three months to June 30 was $4.7 billion, down from $4.96 billion a year earlier and $5.1 billion in the first quarter, the company said.

Analysts had expected income to be flat at $4.96 billion in a consensus of estimates compiled by LSEG.

Still, Total confirmed it would buy back up to $2 billion in shares in the third quarter.

Biraj Borkhataria, head of global energy transition research at RBC Europe, said the results were “modestly disappointing”.

Shares in the company were down 1.7% at 61.4 euros as of 0805 GMT.

Total, which generates most of its income from oil and gas production and sales, is the first Western oil major to report first-half results.

Earnings in recent quarters have fallen from 2022 records — when they were buoyed by a spike in energy prices following Russia’s invasion of Ukraine — but they remain above pre-pandemic levels as demand continues to rise, in particular for seaborne liquefied (LNG).

Total’s income from oil production was 14% higher than last year, reflecting a higher crude price, but earnings from its refining and chemicals unit were down 36%, while its integrated LNG business was down 13%.

The company blamed subdued diesel demand in Europe, coupled with lower prices as market volatility from the Russian supply disruption normalises.

Its average refining margin of $44.90 per metric ton, while slightly higher than last year, represents a 37% fall compared with the first quarter of 2024.

Peers BP (NYSE:) and Exxon (NYSE:) had also warned this month that lower refining margins and weaker gas demand would dent profits this quarter.

Total confirmed net investment guidance of between $17 billion and $18 billion for the year.