TotalEnergies misses earnings estimates on weak LNG sales, refining margins

French giant TotalEnergies (NYSE: TTE) reported lower-than-expected net income for the second quarter of the year due to lower LNG sales and prices and lower refining margins.

TotalEnergies on Thursday reported adjusted net income of $4.7 billion for the second quarter, down 9% from the first quarter and also down from profit of $4.96 billion for the second quarter of 2023.

Adjusted net income for Q2 2024 fell short of analysts’ expectations of a net profit of $4.96 billion.

TotalEnergies averaged 2.44 million barrels of oil equivalent per day (boepd), down 1% quarter-on-quarter, impacted by higher planned maintenance, particularly in the North Sea.

However, oil and gas production rose 3% year-on-year in the second quarter, helped by the launch and expansion of projects in Brazil, Oman, Norway, Nigeria and Azerbaijan.

Exploration & Production adjusted net operating income rose 5% quarter over quarter to $2.667 billion as higher oil prices offset lower gas realizations and production, according to TotalEnergies.

In the LNG division, the company – the world’s second-largest LNG trader after Shell – saw LNG sales fall 18% sequentially in the second quarter, “primarily due to lower spot purchases against a backdrop of lower LNG demand in Europe”.

Integrated LNG division adjusted net operating income decreased 6% compared to the first quarter due to lower LNG prices and sales.

“Moreover, gas trading did not fully benefit from markets that were less volatile than in the first half of 2023,” TotalEnergies noted.

In the Downstream segment, Refining and Chemicals reported a 34% quarter-on-quarter decline in operating income, impacted by lower refining margins, primarily in Europe and the Middle East, partially offset by higher refining capacity utilization rates.

TotalEnergies forecasts third-quarter oil and gas production to range from 2.4 million boe/d to 2.45 million boe/d.

In the downstream segment, “global refining margins, which have fallen sharply since the end of the first quarter of 2024, continue to be impacted by weak demand for diesel in Europe, as well as market normalization following supply disruptions from Russia,” TotalEnergies said.

Author: Tsvetana Paraskova for Oilprice.com

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