A boost in output helped cushion a drop in global oil prices

Paris (AFP) - TotalEnergies said Thursday its net profit plunged in the second quarter despite increased output as global oil and gas prices dropped.

Despite the 29 percent year-on-year drop in net profit in the second quarter to $2.7 billion – the lowest in four years – the French fossil fuel giant called its performance “robust” given the tough global outlook.

“We are faced with an unstable geopolitical and macroeconomic environment, which was dominated over the period by the 12-day war between Israel and Iran, as well as the trade war between the United States and some of its commercial partners,” TotalEnergies’ CEO and Chairman Patrick Pouyanne told investors.

“We do not control the markets. Today, volatility comes not just from supply and demand, but also from geopolitics,” he added.

The firm kept its revenue drop to 7.6 percent, to $49.6 billion, below the 10 percent fall in the price of Brent crude oil, the international benchmark.

That was thanks in part to a 2.5 percent boost in output, to an average of the equivalent of 2.5 million barrels of oil in the second quarter.

Debt however nearly doubled to $25.9 billion, while sales fell year-on-year by 7.6 percent to $49.6 billion.

Despite rising criticism from environmental activists, the oil company insists that fossil fuel extraction is necessary to respond to the world’s demand for energy and finance investment in renewables.

“TotalEnergies continued to successfully execute its balanced multi-energy strategy, supported by sustained growth in hydrocarbon and electricity production,” Pouyanne said earlier in a statement, hailing “robust financial results in the second quarter”.

The company confirmed a second interim dividend of 0.85 euros per shares, an increase of almost 7.6 percent from last year, and up to $2 billion in share buybacks in this quarter.