Oil major, TotalEnergies, has announced a sharp upswing in profit for full-year 2021, reporting an adjusted net income of $18.1 billion and a net income of $16.1 billion, attributed to the huge rebound in energy prices.
This compared with an adjusted net income of $4.1 billion and a net loss of $7.2 billion in 2020, higher than what analysts polled by Refinitiv expected for full-year 2021 adjusted net income ($17.1 billion).
For the final quarter of 2021, TotalEnergies reported adjusted earnings of $6.8 billion, again, surpassing analyst expectations of $6.1 billion, while generating cash flow of $9.8 billion in the quarter.
TotalEnergies CEO Patrick Pouyanné said in a statement that: “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 above $30/Mbtu and sent European power prices to record levels.”
Financial Results from Various Operations
Regards exploration and production activities, the company benefited hugely as oil prices kept galloping over the course of the year, recording adjusted net operating income of $10.4 billion and was a strong contributor to the Company’s net cash flow with $12.2 billion.
In line with upstream operations, and as part of its strategy to maintain capital discipline, the company invested in low-cost and low-emission project. The Company increased its presence in Brazil and Uganda while divesting interests in maturing assets.
Downstream operations also posted strong results with $3.5 billion in adjusted net operating income and cash flow of $5.5 billion, or more than $3 billion in net cash flow, due to the rise in energy prices.
The Company’s Integrated Gas, Renewables & Power (iGRP) segment recorded adjusted net operating income of $2.8 billion and cash flow of $2.4 billion in the fourth quarter, bringing full-year results and cash flow to $6.2 billion and $6.1 billion, respectively.
Patrick Pouyanné said that the firm’s “multi-energy model demonstrated its ability to take full advantage of the very favorable environment, particularly in the LNG and electricity sectors.”
TotalEnergies also announced a final dividend of 0.66 euros ($0.75) per share, taking the total for 2021 to 2.64 euros per share.
The company outlined an increase in interim dividends of 5% in 2022 and said it plans $2 billion in share buybacks for the first half of the year. Net debt was reduced to $20.8 billion by the end of 2021, down from $29.3 billion when compared to the end of 2020.
According to CNBC News, the Company’s shares were little changed during early morning trade on the London Stock exchange. The firm’s stock price is up more than 16 per cent year-to-date.
In line with its climate goals, the Company has outlined plans to become a net-zero carbon emissions company by 2050. However, Climate Action 100+, the influential investor group, finds the firm’s targets only partially aligned with the Paris Agreement.
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