TotalEnergies announced that it will halve its share buyback program in the first quarter. The company set the amount at 750 million dollars, a lower level than the one it had been sustaining since 2022 when Brent reached over 100 dollars per barrel.
Fourth-quarter results and the drop in oil prices
The decision sends a cautious signal to the market. With weaker crude oil and natural gas prices, the group prefers to maintain financial flexibility. CEO Patrick Pouyanné explained that they are starting from the lower end of the guidance announced months ago and will be able to adjust upwards if the environment improves.
On the other hand, fourth-quarter results reflect the direct impact of the drop in commodity prices. Adjusted net income fell to US$3.8 billion compared to US$4.4 billion in the same period last year, a figure close to the market consensus.
The company detailed that Brent crude oil fell about 15% year-on-year in the quarter and liquefied natural gas fell about 18%. To compensate for this environment, TotalEnergies increased oil and gas oil and gas production by approximately 5%.
At the same time, the refining and chemicals area showed a significant improvement. Profits in this segment reached 1 billion, driven by higher margins in Europe. The company linked this performance to changes in the fuel market following sanctions against Russian companies and European restrictions on imports of derivatives.
Similarly, the adjustment in share buybacks places TotalEnergies within a more cautious strategy in the face of oil and gas volatility. Other European oil companies have also moderated their programs, while some U.S. majors are holding their plans steady.
Finally, the core message is clear: shareholder return continues, but with greater discipline. The pace of buybacks will depend on the performance of Brent, LNG and the strength of results in the coming quarters.
Source and photo: TotalEnergies