Feb 8, 2023
TotalEnergies Hikes Dividend, Buybacks on Record 2022 Profit
(Bloomberg) -- TotalEnergies SE raised its dividend and will buy back a further $2 billion of shares after surging oil and gas prices lifted 2022 profit to a record $36.2 billion.
The French energy giant capped another stellar quarter for Big Oil, with most companies pledging more generous returns to investors while also paying down debt and in some cases boosting investment. Norway’s Equinor ASA also raised shareholder payouts on Wednesday.
TotalEnergies’ fourth-quarter dividend will be 74 euro cents a share, and increase of 7.3% from the prior period. The buyback will be completed this quarter. Shares of the company fell 1.1% to 56.89 euros as of 9:05 a.m. in Paris.
“Oil and gas prices as well as refining margins remained strong in supply-constrained markets,” Chief Executive Officer Patrick Pouyanne said in a statement. TotalEnergies was able to benefit from this favorable environment by boosting production and raising sales of liquefied natural gas by 22%, he said.
Adjusted net income was $7.56 billion in the fourth quarter, 11% higher than a year earlier and in line with analyst expectations. For 2022 as a whole, profit doubled from the prior year.
TotalEnergies sees oil staying above $80 a barrel this year and expects “tensions on European gas prices” to continue because of limited growth in LNG production and rising demand. Refining margins in Europe, particularly for fuels like diesel, will be supported by the effect of Europe’s embargo on Russian oil products, it said.
See also: TotalEnergies, BP Refining Margins Swing Before New Russia Ban
The company expects oil and gas production, excluding its holding in Russian LNG producer Novatek PJSC, to increase this year by 2% to 2.5 million barrels equivalent a day. It plans to invest $16 billion to $18 billion in 2023, $5 billion of which will go to low-carbon energy. Capital expenditure in 2022 was $16.3 billion.
Surging profits, at a time when most people are suffering from a cost-of-living crisis, has put the oil industry in the cross-hairs of politicians around the world. TotalEnergies and its peers have already been hit with windfall taxes in the UK and Europe. The French company said its global tax bill more than doubled to $33 billion last year, with most of it paid in countries where it produces oil and gas.
(Updates with share price in third paragraph.)
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