TotalEnergies sees its net profits collapse in the third quarter

With more than 2 billion euros less, TotalEnergies' net profit collapsed at the end of 2024. At a time when the State was hoping to tax part of these profits, the news announced on Thursday comes at a rather bad time.

The French oil and gas group unveiled its results for the third quarter of 2024 on Thursday October 31: profit fell sharply, with almost 2 billion euros less than in the spring.

Oil prices have fallen significantly, the same for gas. We are returning to a form of normality in prices, because after the Covid crisis and the war in Ukraine, the entire world market was reorganized. For example, Russia now sells its oil to the Indians and the Chinese, American gas arrives in Europe, and in fact, there are no longer the tensions that we experienced over energy supplies. However, it was these tensions that caused the price surge.

With falling barrel prices, TotalEnergies is seeing its refining margins shrink. And it doesn't take much for its net profit to decline: -65% compared to the same period last year.

This probably means the end of superprofits for Totalenergie. We must see how prices will evolve depending on the result of the American presidential election, because this promises to have consequences on the evolution of the situation in the Middle East and in Ukraine. But if the end of the year remains on the same trend as this 3rd quarter, TotalEnergies should reap around 10-12 billion euros in profits at the end of 2024. This is roughly what the oil giant was doing before the Covid, between 2014 and 2020. Far from the almost 20 billion euros in profits earned in recent years, which were very exceptional.

This reduction comes at a time when MPs want to put a surtax on large companies which make large profits. Of course, TotalEnergies is still making profits: 9 billion euros recorded since January, but most of its profits are made by the firm abroad. In France, 80% of TotalEnergies' activity concerns refining, which is precisely what brings it the least, or even costs it, because refining is in sharp decline.

In fact, if the drop in oil prices is good news for consumers and motorists, it promises to be bad news for the taxpayer. And politicians hoping to make millions of euros by taxing the oil giant could be disappointed.