French supermajor TotalEnergies (NYSE: TTE) reported lower-than-expected net income for the second quarter of the year amid lower LNG sales and prices and weaker refining margins.
TotalEnergies reported on Thursday an adjusted net income of $4.7 billion for the second quarter, down by 9% from the first quarter and also down from the $4.96 billion earnings for the second quarter of 2023.
The Q2 2024 adjusted net income missed the analyst consensus estimate of a net profit of $4.96 billion.
TotalEnergies' upstream production averaged 2.44 million barrels of oil equivalent per day (boepd), down by 1% quarter-on-quarter, due to higher planned maintenance, notably in the North Sea.
But oil and gas output in the second quarter rose by 3% annually, thanks to start-ups and ramp-ups of projects in Brazil, Oman, Norway, Nigeria, and Azerbaijan.
The adjusted net operating income of the Exploration & Production division rose by 5% quarter-to-quarter to $2.667 billion, as higher oil prices offset lower gas realizations and production, TotalEnergies said.
In the LNG division, the company - which is the world's second-largest LNG trader after Shell - saw LNG sales falling by 18% sequentially in the second quarter, "notably due to lower spot purchases, in a context of lower LNG demand in Europe."
Adjusted net operating income at the Integrated LNG division slipped by 6% from the first quarter, due to lower LNG prices and sales.
"Moreover, gas trading did not fully benefit in markets characterized by lower volatility than during first half of 2023," TotalEnergies noted.
In the downstream, the Refining & Chemicals business saw operating income plunge by 34% quarter-to-quarter, due to lower refining margins mainly in Europe and the Middle East that were partially offset by higher refinery utilization rates.
Looking ahead, TotalEnergies expects its oil and gas production to remain between 2.4 million boepd and 2.45 million boepd in the third quarter.
In the downstream, "Global refining margins, which have sharply decreased since the end of the first quarter 2024, remain impacted by low diesel demand in Europe, as well as by the market normalization following the disruption in Russian supply," TotalEnergies said.
By Tsvetana Paraskova for Oilprice.com
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