TotalEnergies SE (TTE) Q3 2025 Earnings Call Highlights: Strong Cash Flow and Dividend Growth ...

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Cash Flow: Increased by 4% in the third quarter despite a drop in oil prices. Adjusted Net Income: Increased steadily in the third quarter. Hydrocarbon Production Growth: Increased by more than 4% year-on-year in the third quarter. Cash Flow Margin: New project barrels have a cash flow margin roughly twice higher than the base portfolio. Downstream Cash Flow: Increased by almost $500 million in the third quarter. Net Investments: Decreased by $3.5 billion quarter-over-quarter. Gearing: Decreased to close to 17% from nearly 18%. Shareholder Returns: $4.5 billion in dividends and buybacks in the third quarter. Dividend Growth: Third interim dividends increased by close to 8% in EUR and more than 10% in USD compared to 2024. Share Buyback: Authorized up to $1.5 billion for the fourth quarter of 2025. Refining Margin: European refining margin improved to $63 per ton, up close to 80% from the second quarter. Return on Equity: 14.2% for the 12 months ending September 30th. Exploration and Production Segment: Generated $2.2 billion in the third quarter, up 10% quarter-over-quarter. Integrated Power Cash Flow: $0.6 billion, up 9% quarter-over-quarter. Downstream Adjusted Operating Income: $1.1 billion, up more than 30% quarter-over-quarter. Working Capital Release: $1.3 billion positive contribution to cash in the third quarter. Net Investments in Third Quarter: Decreased to $3.1 billion, including $0.4 billion of divestment net of acquisitions.

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Release Date: October 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

TotalEnergies SE (NYSE:TTE) reported a 4% increase in cash flow for the third quarter despite a $10 per barrel drop in oil prices year-on-year. The company achieved strong production growth in hydrocarbons, with new projects contributing significantly to cash flow. TotalEnergies SE (NYSE:TTE) increased its third interim dividend by close to 8% in euros and more than 10% in dollars compared to 2024. The company authorized up to $1.5 billion in share buybacks for the fourth quarter of 2025. TotalEnergies SE (NYSE:TTE) anticipates further strengthening of its balance sheet with gearing forecasted to decline to 15-16% by year-end.

Negative Points

The company faces potential tax challenges in France, with ongoing debates about taxing share buybacks. There is heightened competition in the LNG market, making it harder to achieve trading profits. The refining utilization rate is expected to be lower in the fourth quarter due to planned turnarounds. The company is cautious about the impact of new EU regulations on Russian LNG imports, which could affect future operations. TotalEnergies SE (NYSE:TTE) faces challenges in the chemicals sector due to overcapacity and competition from low-cost regions.

Story Continues

Q & A Highlights

Q: Can you clarify the situation regarding the tax issues in France and the potential impact on share buybacks? A: Patrick Pouyanne, CEO, explained that there is significant fiscal creativity in the French parliament, but he believes that the government will ultimately make reasonable decisions. He emphasized that TotalEnergies does not generate significant profits in France, and the company is largely unaffected by these tax discussions. He reassured that the company's global operations are not impacted by the French political situation.

Q: Are you able to capture the extraordinary refining margins currently, and how are the improvements at your refineries progressing? A: Patrick Pouyanne, CEO, stated that TotalEnergies is capturing high refining margins, with recent margins around $75 per ton. He noted that the company has completed turnarounds at key refineries like Port Arthur and Donges, which are now fully operational. He expressed optimism about maintaining strong refining margins despite upcoming turnarounds at other facilities.

Q: How do you see the upstream margin mix evolving with the growth trajectory over the next several years? A: Patrick Pouyanne, CEO, highlighted that the upstream margin is improving due to new projects with higher margins. He mentioned that the Iraqi contracts are favorable and contribute positively to margins. The company expects upstream free cash flow to grow faster than production, driven by high-margin new barrels.

Q: Can you provide insights into the LNG market's competitiveness and the impact on trading profits? A: Patrick Pouyanne, CEO, acknowledged that the LNG market has become more competitive, with trading profits normalizing after exceptional years. He emphasized that TotalEnergies' trading strategy is asset-based, focusing on leveraging its growing volume of assets and long-term contracts to generate value.

Q: What are your thoughts on the EU's proposed ban on Russian LNG imports from 2027, and how would it affect your operations? A: Patrick Pouyanne, CEO, stated that the company is analyzing the new EU regulation to understand its scope. He mentioned that TotalEnergies is committed to being sanction-compliant and is assessing the potential impact on its contracts. The company is prepared to redirect cargos if necessary, depending on the final interpretation of the regulation.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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