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TotalEnergies sees first quarter earnings drop on lower gas prices

The logo of TotalEnergies is seen at an electric vehicle fuelling station in La Defense business district in Courbevoie near Paris, France, Wednesday, March 1, 2023. (AP Photo
The logo of TotalEnergies is seen at an electric vehicle fuelling station in La Defense business district in Courbevoie near Paris, France, Wednesday, March 1, 2023. (AP Photo Copyright Aurelien Morissard/Copyright {2023} The AP. All rights reserved.
Copyright Aurelien Morissard/Copyright {2023} The AP. All rights reserved.
By Indrabati Lahiri
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Declining natural gas revenues dampened the company’s performance in the first quarter of 2024, with earnings down 22%, however its resilient oil business helped cap losses.

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French energy company TotalEnergies announced its first quarter 2024 earnings on Friday morning, announcing a 22% decline in Q1 2024 earnings, mainly due to shrinking natural gas profits.

However, a stronger-than-expected oil market did manage to offset this somewhat, although increasing crude oil prices could pose a problem for refining margins in the next few months, according to TotalEnergies.

Adjusted net income for the first quarter of the year surpassed market expectations, coming in at $5.1 billion (€4.75 billion), more than the $5 billion previously anticipated by London Stock Exchange Group (LSEG) analysts. However, it was still 22% less than the $6.5 billion seen in Q1 2023.

Adjusted EBITDA came in at $11.5 billion for the quarter, a 19% drop from the $14.2 billion seen in the first quarter of 2023. Cash flow from operating activities clocked in at $2.2 billion, a 58% plunge from Q1 2023’s $5.1 billion.

The company also announced that it would be rolling out share repurchase programmes worth around $2 billion this quarter.

Several oil and gas companies have seen declining profits in the last few months, as the bumper earnings made during the Russia-Ukraine war start to pull back. Other companies, such as Shell, have also seen increased pressure to transition faster to renewable energy in Europe, prompting it to consider expanding in the US instead.

TotalEnergies announces clean fuel joint venture with Vanguard Renewables

TotalEnergies has also recently announced a waste-to-clean fuels joint venture with Vanguard Renewables, owned by BlackRock. This would be primarily based in the US and would involve converting food bio waste into renewable natural gas (RNG).

Olivier Guerrini, vice president, Biogas at TotalEnergies, said in a press release, “TotalEnergies is pleased to partner with BlackRock and its portfolio company Vanguard Renewables, to accelerate the development of food bio waste processing into renewable natural gas in the United States.

“By expanding into this fast-growing market, our joint venture will create value for both companies while benefiting the food and farming sectors as well as providing a ready-to-use solution to industrial companies willing to decarbonise their energy supply.

“This joint venture is a new step for TotalEnergies in achieving its objective to produce a 10 TWh of renewable natural gas by 2030.”

Neil H. Smith, chief executive officer at Vanguard Renewables said, “We are thrilled to welcome TotalEnergies as a strategic partner, building on our mission of developing farm-based organics-to-renewable natural gas projects across the United States.

“This collaboration validated Vanguard’s leadership position in the RNG space in the US and brings together our expertise with TotalEnergies’ extensive experience in large-scale energy development, safety procedures and global partnerships.

“These 10 RNG projects, jointly undertaken by TotalEnergies and Vanguard Renewables as co-investment partners, further reinforce our commitment and ability to deliver on our mission of harnessing the power of waste to decarbonise our planet.”

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