TotalEnergies Posts Rise in Q3 Income as Ukraine Conflict Pushes Up Gas Prices

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TotalEnergies Posts Rise in Q3 Income as Ukraine Conflict Pushes Up Gas Prices

By Scott Kanowsky -- TotalEnergies SE (EPA: TTEF ) reported a surge in third quarter core income, as a spike in gas prices caused by the war in Ukraine helped the French group overcome a new multi-billion dollar impairment charge. 

Adjusted earnings before interest, taxes, debt and amortization grew by 74% year-on-year during the three-month period to $19.42 billion.

Much of this uptick was driven by TotalEnergies' integrated gas, renewables and power unit, which posted record operating income thanks to a 54% rise in the average selling price of liquefied natural gas compared to the prior quarter. That helped offset the impact of an unplanned shutdown of production at its operations in the Kashagan oil field in the Caspian Sea.

Meanwhile, net profit, which factors in an impairment expense of $3.1 billion, increased to $6.6 billion. TotalEnergies said the charge was "related to Russia," but did not provide further details.

Earlier this month, chief executive officer Patrick Pouyanné told a forum in London that TotalEnergies will keep shipping liquefied natural gas from Russia as long as there are no European sanctions on the fuel. But Pouyanne stressed that the company is no longer investing in fresh projects in the country.

TotalEnergies said the elevated quarterly earnings have led it to announce an extra interim dividend of $0.69 a share later this year, marking its third payout to stakeholders in 2022.

Looking ahead, TotalEnergies warned that oil and gas markets are facing "strong volatility." However, it expects a recent output cut by OPEC+ countries and an upcoming European ban on Russian energy exports to continue to support oil prices in 2023 despite an anticipated slowdown in global economic activity next year.

"Gas prices should also remain high, driven by the need to import [liquefied natural gas] into Europe to replace Russian gas imports," it added.

Shares in the group were higher in early-afternoon trading on Thursday.


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