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Gas prices falling: Totalenergies records decline in profits
Falling gas prices weighed on energy company Totalenergies in the first quarter. Find out how the French group is dealing with the challenges of the weaker gas market.
Gas prices falling: Totalenergies records decline in profits
The French energy group Totalenergies recorded a decline in adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) by almost a fifth to 11.5 billion US dollars (around EUR 10.7 billion) in the first quarter due to lower gas prices. The operating result with liquid gas also fell by around 40 percent. This decline was caused by a mild winter in Europe, which negatively impacted the company's business due to reduced heating needs.
Despite the decline in Ebitda, Totalenergies recorded a slight increase in profit of three percent to $5.7 billion, with the lower profit contribution being due, among other things, to a reduced tax rate. Adjusted net income, however, fell 22 percent to $5.1 billion, but remained slightly above analysts' expectations. The robust oil market had a positive effect on the overall result and was able to partially compensate for the weakness in the gas market.
Last year, Totalenergies, like other companies in the industry, was able to benefit from massive increases in oil and gas prices, which were influenced by geopolitical events such as Russia's attack on Ukraine. For the coming second quarter, Totalenergies announced that it would invest another two billion dollars in share buybacks in order to further strengthen earnings.