TotalEnergies investors were pleased with the company’s latest quarterly financial results, which included a $2 billion share buyback for the upcoming quarter and a nearly 7% increase in the first interim dividend to €0.79 per share. Despite a 22% decrease in adjusted net income to $5.1 billion, the company’s earnings were still above market expectations. The decline in cash flow by 15% from the same quarter last year was attributed to the historically higher base recorded in the corresponding quarter in 2023 due to the impact of the Russia-Ukraine war on energy prices at the time. Overall, the financial results were positively received by investors, with TotalEnergies’ share price experiencing an uptick at the end of the week.
TotalEnergies Chief Executive Officer, Patrick Pouyanné, commented on the results, noting that they were in line with the company’s ambitions, particularly in the context of sustained oil prices and refining margins, although gas prices were softening. In light of growing investor confidence in the company, Pouyanné expressed serious consideration for a primary listing in New York to attract a larger and more favorable investor base. This strategy echoes similar moves by other European supermajors, such as Shell, who are also considering relocating their primary listings to the U.S. if better valuations can be achieved.
TotalEnergies reported an average oil and gas production of 2.46 million barrels of oil equivalent per day, with a 6% quarter-on-quarter growth in liquefied natural gas (LNG) production. This increase was attributed to start-ups at projects in Brazil and Nigeria. Despite this positive growth, the company anticipates a marginal decline in output in the second quarter, ranging from 2.4 million boepd to 2.45 million boepd due to planned maintenance activities. However, production upticks at projects in Brazil and Denmark are expected to partially offset these declines.
The announcement of potential primary listings in the U.S. adds to a trend of European energy companies exploring opportunities in American markets to attract more investors and potentially achieve higher valuations. TotalEnergies, like its competitors, is looking to leverage the U.S. investor base while weighing the benefits of a move from European exchanges. The company’s strong financial performance in the first quarter of 2024, despite challenges in the energy market, has set a positive tone for potential strategic decisions moving forward.
TotalEnergies also disclosed that it had authorized a $2 billion share buyback for the upcoming quarter, alongside raising its first interim dividend. The decision to return capital to shareholders, despite a decline in net income and cash flow, reflects the company’s commitment to maintaining shareholder satisfaction and confidence. The buyback and dividend increase, coupled with the company’s better-than-expected financial results, have contributed to an increase in TotalEnergies’ share price, reflecting a positive response from the market.
Overall, TotalEnergies’ impressive financial performance in the first quarter of 2024, despite challenges in the energy market and global geopolitical tensions, has positioned the company well for future growth strategies and investor engagement. The company’s focus on rewarding shareholders through buybacks and dividend increases, along with its exploration of potential listings in New York, demonstrates a proactive approach to maximizing shareholder value and expanding its investor base. As TotalEnergies celebrates its 100th year in 2024, its continued leadership in the energy sector and strategic initiatives underline its commitment to sustainable growth and value creation.