(Bloomberg) – TotalEnergies SE said its third-quarter profit and cash flow may rise slightly after oil and gas output increased and refining margins jumped from a year earlier, outweighing a drop in crude prices.
Despite a drop in oil price of $10 per barrel year-on-year, the results and cash flow from business segments should be flat to 5% higher thanks to accretive hydrocarbon production growth and improved results of the downstream businesses, the French energy giant said in a trading update on Wednesday.
Oil and gas production for the third quarter is estimated to have risen by 4% from a year earlier to 2.5 million barrels of oil equivalent per day, the company said. Results and cash flow from exploration and production should come in more than 4% higher from the second quarter, while downstream results and cash flow are expected to improve by $400 million to $600 million year-on-year thanks to a wider refining margin in Europe.
TotalEnergies shares rose as much as 2.6% after the trading update brought some positive sings ahead of third-quarter earnings slated to be published on Oct. 30. The French company’s stock has been under pressure in recent quarters as dwindling profits have forced the oil supermajor to pare share buybacks to curb a rise in its debt.
Cash flow from the group’s liquefied natural gas and power businesses for the third quarter should be in line with the previous three months, TotalEnergies said. The gearing ratio — a measure of the company’s indebtedness — should improve by 0.5% to 1% from the end of the second quarter, thanks to an expected positive contribution from working capital of $1 to $2 billion.
