TotalEnergies's 'superprofit' renews windfall tax debate

TotalEnergies's 'superprofit' renews windfall tax debate

France has been riven by debate over 'superprofits' being earned by energy companies
France has been riven by debate over 'superprofits' being earned by energy companies. Photo: Christophe ARCHAMBAULT / AFP/File
Source: AFP

PAY ATTENTION: Click “See First” under the “Following” tab to see Briefly News on your News Feed!

TotalEnergies said Thursday surging global oil and gas prices helped it post a massive jump in profits in the third quarter as France is riven over taxing windfall profits of energy companies.

Net profits at the French company soared 43 percent from the same period last year to $6.6 billion, with record performances for its natural gas and liquefied natural gas (LNG) activities.

The firm has now earned $17.3 billion over the first nine months of the year, more than the $16 billion in profits it posted last year.

Total's bumper earnings may add fuel to the raging debate over what the French call superprofits by energy firms due to the spike in prices thanks to the Russian invasion of Ukraine.

France's opposition wants to impose a windfall tax to help fund measures to protect consumers from energy price hikes, but President Emmanuel Macron reiterated his opposition to such a measure in a prime-time television appearance on Wednesday evening.

Read also

Shell posts more bumper profits on high energy prices

TotalEnergies, which has been plagued by strikes in France that have led to petrol shortages at pumps, announced it would pay its workers a bonus.

PAY ATTENTION: Never miss breaking news – join Briefly News' Telegram channel!

"In this favorable environment, taking into account income and production taxes of $26 billion worldwide, the company is implementing a balanced value-sharing policy with an exceptional one-month-salary bonus in 2022 to all its employees worldwide," it said in a statement.

TotalEnergies profits
TotalEnergies profits. Photo: Sylvie HUSSON / AFP
Source: AFP

TotalEnergies also confirmed its announcement from last month to return to shareholders 35 to 40 percent of cash flow, and maintained its interim quarterly dividend at a higher rate from last year.

French Finance Minister Bruno Le Maire welcomed the company's bumper profits.

"I say so much the better," he reacted, noting that it would allow the firm to continue until mid-November its discount of 20 cents per litre at the pump, which comes in addition to the 30 cents per litre discount paid for by the state.

Read also

Euro and pound hold gains, stocks mostly rise as rate fears ease

"When a French company succeeds, I think all of us should be satisfied with its success and we should all be proud of having a big energy company like Total," he said on BFM Business television channel.

While TotalEnergies reached a pay hike deal with a majority of unions, one has held out and two refineries remain on strike despite the government forcing some employees back to work under threat of jail time.

Some 14 percent of French filling stations partially or completely lacked supplies as of Wednesday, down from more than a third last week.

Russian impairment

While oil and gas prices have recently cooled, they are still much higher than before Russia launched its invasion of Ukraine in February.

TotalEnergies noted that the average LNG price last quarter was up 50 percent from the previous quarter as European nations scrambled to replace Russian supplies and fill up their storage facilities ahead of winter.

Read also

Samsung Electronics says Q3 operating profit down 31% on-year

Its gas and renewables unit made a record net operating profit of $3.6 billion, a jump from $1.1 billion in the previous quarter.

That came despite a drop in its LNG production and sales from the previous quarter due to repair operations, with the company making spot purchases to maximise its facilities to process LNG and seize market opportunities.

The war has not been all a boon for TotalEnergies, which was involved in several gas projects in Russia.

It made a new $3.1 billion impairment charge due to its activities there, following write downs worth $7.6 billion in the first two quarters this year.

Despite slower global growth next year, TotalEnergies said it expects a cut of two million barrels per day by the OPEC oil cartel and its allies to support prices, as well as a European ban on Russian oil imports due to go into effect next month.

Read also

Asian markets rally with Wall St on rate hope, healthy earnings

"Gas prices should also remain high, driven by the need to import LNG into Europe to replace Russian gas imports," said Total.

PAY ATTENTION: Сheck out news that is picked exactly for YOU ➡️ find the “Recommended for you” block on the home page and enjoy!

Source: AFP

Authors:
AFP avatar

AFP AFP text, photo, graphic, audio or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP news material may not be stored in whole or in part in a computer or otherwise except for personal and non-commercial use. AFP will not be held liable for any delays, inaccuracies, errors or omissions in any AFP news material or in transmission or delivery of all or any part thereof or for any damages whatsoever. As a newswire service, AFP does not obtain releases from subjects, individuals, groups or entities contained in its photographs, videos, graphics or quoted in its texts. Further, no clearance is obtained from the owners of any trademarks or copyrighted materials whose marks and materials are included in AFP material. Therefore you will be solely responsible for obtaining any and all necessary releases from whatever individuals and/or entities necessary for any uses of AFP material.