France's Total swings back to profit on energy prices boom

[PARIS] TotalEnergies swung back to profit in 2021 thanks to surging oil and gas prices, and announced on Thursday (Feb 10) a US$2 billion share buyback scheme, an increase in dividends and a series of investments.

With net income of US$16 billion and adjusted net income of US$18.1 billion, the French oil major's results were at their highest since record years in 2007 and 2008 and followed bumper profits from rival BP.

That will allow it to buy back US$2 billion of shares in the first half of 2022, the company said, with CEO Patrick Pouyanne adding that the company could potentially go beyond that in the second half of the year.

TotalEnergies also announced an increase in interim dividends of 5 per cent for 2022, "given the structural growth in cash flow generated by the LNG (liquefied natural gas) and electricity business".

At the current pace, cash flow could reach US$32-35 billion in 2022, Pouyanne said.

The company said net investments should reach US$14-15 billion in 2022, including US$3.5 billion in renewables and electricity - key areas that have been targeted for growth.

TotalEnergies said it planned to have 16 GW of renewable gross capacity in operation by year-end. That will include over 6 GW in additional installed capacity this year.

The final quarter of 2021 was "exceptional", said Pouyanne, adding it was the strongest on record.

"In the fourth quarter, oil prices continued to rise, up 9 per cent compared to the previous quarter, while gas prices in Europe and Asia, driven by increasing demand, hit all-time highs ... and sent European power prices to record levels," he said in a statement.

Natural gas and electricity prices around the world have surged since the middle of last year because of tight gas supplies and higher demand as economies rebounded from pandemic shutdowns.

Total had posted a US$7.2 billion loss in 2020, hit by writedowns on assets as the pandemic hit fuel consumption.

Like its rivals, TotalEnergies has come under pressure from climate campaigners and some shareholders to speed up the shift from fossil fuels to cleaner sources of energy.

It said it would publish on March 24 a "sustainability and climate" progress report.

With rising energy prices pushing inflation up across Europe, the industry is also being urged to help ease the pain.

TotalEnergies anticipates 2022 hydrocarbon production growth of around 2 per cent. REUTERS