By America Hernandez
PARIS -French oil major TotalEnergies (EPA:TTEF) reported a worse than expected 6% fall in second-quarter earnings on Thursday, hurt by lower refined product and gas sales and as European refining margins tumbled.
Adjusted net income for the three months to June 30 was $4.7 billion, down from $4.96 billion a year earlier and $5.1 billion in the first quarter. Analysts had expected a flat outcome versus a year earlier.
Still, Total confirmed it would buy back up to $2 billion of shares in the third quarter and reiterated net investment guidance of $17-$18 billion for the year.
RBC Europe analyst Biraj Borkhataria said the results were "modestly disappointing".
Total shares were down 1.22% at 61.7 euros as of 1421 GMT.
Total is the first Western oil major to report first-half results.
Unlike larger peers, it is continuing to invest in renewable energy assets as part of a push to build an integrated power business, while also exploring new hotspots like Namibia and Guyana.
Income from oil production in the quarter was 14% higher than last year, reflecting higher crude prices but earnings were down 36% at its refining and chemicals unit, and fell 13% at its integrated LNG business.
The company blamed subdued diesel demand in Europe and lower prices as market volatility from the Russian supply disruption normalises.
Its average refining margin of $44.90 per metric ton is down 37% from the first quarter. CEO Patrick Pouyanne said refining margins were "normalising", and expected to be around $40 or $45 per ton in the long term, rather than $70 or $80.
BP (NYSE:BP) and Exxon (NYSE:XOM) also warned this month that lower refining margins and weaker gas demand would dent profits this quarter.
Pouyanne told analysts that Total would press ahead with several key projects this year - including a new U.S. upstream investment to follow April's purchase of a Texas shale gas stake.
"I can tell you we are working on another deal ... on upstream there will be more to come, for sure," he said.
On Namibia's Venus oil discovery, high volumes of gas in the reservoir make the development complex, Pouyanne said.
In Mozambique, where Total's $20 billion LNG project has been frozen under force majeure since 2021, Pouyanne said he hoped to chart a path toward a restart by year-end, after October's presidential election.