French energy giant TotalEnergies (TTEF.PA) posted a 22% decline in first-quarter earnings versus a year earlier on Friday as higher refining margins only partly offset a steep decline in profits from natural gas.
Adjusted net income for the three months to end-March came to $5.1 billion, slightly above the $5 billion in a consensus estimate of analysts forecasts compiled by LSEG.
Natural gas prices in Europe have tumbled 45% in the last year due to mild winter weather and easing worries over supplies.
Less volatility in the market also eroded trading opportunities, though Total managed to somewhat offset those lower earnings with better margins in refining.
Cash flow from operations came to $2.2 billion versus $5.1 billion a year earlier.
Hydrocarbon production was roughly stable versus the prior quarter at 2.46 million barrels of oil equivalent per day, as the startup of new liquefied natural gas (LNG) projects Mero 2 in Brazil and Akpo West in Nigeria offset the sale of Canadian oil sands assets in late 2023.
The company said it expected natural gas profits to rise again over winter 2024-2025 as demand recovers in Asia and as little new LNG capacity comes online.
It estimates a winter gas price of above $11/Mbtu, versus a current European price between $8-10/Mbtu.
While refining margins were strong in early 2024, Total said current higher oil prices around $90 per barrel are making refining less profitable going into the second quarter, with the trend likely to continue due to geopolitical tensions and decisions by OPEC+ countries to limit production via quotas.
The company also confirmed it plans $2 billion in share buybacks in the second quarter.
