Europe 1 with AFP 12:06 p.m., February 7, 2024

After a historic year in 2022, French company TotalEnergies recorded a new record net profit in 2023. Results fueled in particular by its liquefied gas strategy in a depressed context for gas and oil prices.

After a historic 2022, French company TotalEnergies recorded a new record net profit in 2023, results fueled in particular by its liquefied gas strategy in a depressed context for gas and oil prices. The 4th largest global major improved its net profit by 4% compared to 2022, to 21.4 billion dollars (19.8 billion euros) for a turnover of 237 billion dollars. At the origin of these revenues, the "growth of hydrocarbons, in particular liquefied natural gas (LNG), and electricity", said the group's CEO Patrick Pouyanné on Wednesday.

A balance sheet below forecasts

Patrick Pouyanné also spoke to the press about his “lowest production cost” on the market in the oil sector and his LNG purchase/sale strategy. This balance sheet, however, falls short of analysts' forecasts, who expected between 21 and 22 billion euros in net profit. This growth is misleading because it benefits from a favorable basis of comparison compared to last year's result which would have been even higher if it had not been reduced by a huge depreciation linked to the withdrawal of activities in Russia. And in fact, adjusted profit for 2023, the reference indicator for investors, fell by 36% to $23.2 billion, compared to 2022, due to Russian disengagement.

The French group closed the ball on Wednesday on the annual results of the oil and gas majors, whose profits have declined against a backdrop of falling hydrocarbon prices. The entire sector benefited in 2022 from the surge in gas and oil prices, in a market disrupted by the post-pandemic economic recovery and the Russian invasion of Ukraine. Preceding the results of TotalEnergies, the giant Shell published last week a profit more than halved in 2023, penalized by the drop in hydrocarbon prices. The other British company, BP, and the American companies Exxon-Mobil and Chevron have also suffered from the decline in hydrocarbons.

While its billions in profits give rise each quarter to debates fueled by politicians and NGOs, TotalEnergies has already made a point of publishing on Tuesday, the day before the publication of its results, its "contributions and commitments" for France. He notably announced that he would pay “320 million euros in profit tax and solidarity tax on electricity for 2023”. But the group, questioned by AFP, did not specify the share of taxes on this amount.

4th mandate in sight for Patrick Pouyanné

The group has diversified into renewable electricity: “we are the most profitable so we can combine profitability and transition,” said its CEO on Wednesday. But it also remains widely criticized for its continued investments in fossil fuels, which are harmful to the climate.

In 2023, TotalEnergies notably announced projects or acquisitions in Namibia, Suriname and Brazil, and it strengthened its position in the United States in LNG, an energy highly coveted by Europe which seeks to replace Russian gas. Its strategy "seems ready to move the world a little further away from its climate objectives", the NGO Global Witness reacted on Wednesday, also drawing attention to dividends for 2023 which it believes will largely cover the damage from the great drought. and extreme events suffered by France in 2022.

“No less than 16.6 billion dollars went to shareholders in 2023, while only 5.5 billion were invested in its renewable branch,” underlined Lucie Pinson, of Reclaim Finance. In September, the group further fueled criticism by announcing its intention to increase its hydrocarbon production by 2 to 3% per year in the next five years, while several oil companies such as Enel, Shell and BP announced in 2023 a downward revision of some of their energy transition objectives.

Under pressure from climate and human rights activists, the group is the target of several legal actions against its strategy or against its gas and oil projects, including the very controversial Tilenga/Eacop project in Uganda and Tanzania. It maintains that these projects are still necessary to meet global demand, and argues that it also devotes a third of its investments to low-carbon energies, particularly in wind and solar power. TotalEnergies intends to maintain its target of 35 GW of renewable electricity capacity in 2025, before 100 GW in 2030, an ambitious objective.

The publication of TotalEnergies' results will launch a special year 2024 for the group, which is celebrating its 100th anniversary in March and should reappoint its CEO Patrick Pouyanné for a fourth term at its next general meeting in May.