European major, TotalEnergies, reported a profit of US$20.5 billion to International Financial Reporting Standards (IFRS). The company said this includes nearly US$15 billion in provisions related to Russia, for an adjusted net income of US$36.2 billion.
Return on equity was 32% and return on capital employed was 28%, TotalEnergies said, demonstrating the quality of its global portfolio.
This was concluded after fourth quarter IFRS net income came in at US$3.3 billion, including impairment of US$4.1 billion related to its Russia exit, for an adjusted net income of US$7.6 billion.
Chief Executive Officer, Patrick Pouyanne, said the Q4 earnings were brought down from the previous quarter highs due to uncertainties about the demand outlook, but that fourth quarter oil and gas prices as well as refining margins remained strong in supply-constrained markets. He said the fourth quarter earnings were owed to this favourable environment and the increases in hydrocarbon production (+5%) and liquefied natural gas (LNG) sales (+22%), thanks to Total’s unique position in Europe.
Total’s Q3 earnings had come in at US$6.6 billion on account of high gas prices.
Specific to exploration and production, Total posted adjusted net operating income of US$3.5 billion and cash flow of US$5 billion in the fourth quarter, raising its full year contribution to the company’s cash flow to US$26 billion in 2022. In the quarter, Total made two new discoveries at Cyprus and Brazil.
The company said it implemented a balanced cash allocation in 2022, between shareholders (37.2% payout), investments (US$16.3 billion or 36% of cash flow, including US$4 billion in low-carbon energies), and deleveraging (reducing net debt by US$12.2 billion, or 27% of cash flow) to end 2022 with gearing of 7%. In addition, Total moved to share profits with its employees (bonus of up to one month’s salary and wage increases considering the inflation rate observed in the various countries) and with its customers through rebates on various energy products to mitigate the increase in energy prices. It said governments have also benefited from more than US$33 billion in taxes worldwide, more than double the amount in 2021, mostly paid to producing countries.
TotalEnergies is involved in petroleum and other projects around the world. Offshore Guyana, the company has interests in three blocks—Orinduik, Kanuku and Canje.
