Total Energies; Better FCF And Net Debt Reported

Total Energies (TTE FP Equity) 4Q23 results beat on revenues but missed on net profit. FCF is higher and net debt lower (credit positives) and, much as there’s a new equity buyback in here, longer-term equity payout targets are lower than FY23’s payout.

• Revenues were 9% ahead of expectations (if 14% lower y/y), adjusted EBITDA was in line with consensus (and 27% lower), net profit missed by 7%. In better news, FCF was EUR8.5bn (7.4bn expected) and daily production was bang in line.
• Net debt and leases have fallen to USD14.6bn (from 24.0bn at Sep-23), representing gearing of 10.9% (from 17.4%). This is driven by a big decrease in working capital consumption.
• The outlook statement looks reasonable but no major refining turnarounds expected, 1Q24 production seen >2.4mboe/d (2.48m expected) and capex of USD17-18bn for FY24. An equity buyback of EUR2bn is announced with a longer-term target of 40% of CFFO to be paid out to equity holders. This is below the FY23 payout (46%) implying a minor credit positive.

Conf call is 0930 London time, available at https://voda.akamaized.net/total/1936063_65b77308a91ac/