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TotalEnergies says its $3.1 billion investment in Adani Group is ‘healthy’

TotalEnergies SE has said that its $3.1 billion investment in the gas and renewables units of Indian conglomerate Adani Group is healthy.

The French energy giant, however, noted that the hydrogen partnership with the group is on hold for the moment.

The investment: Naijaonpoint gathered from Bloomberg that Total invested in assets such as Adani Total Gas Limited and Adani Green Energy Limited which represent 2.4% of the French firm’s capital employed last year.

Shares of the subsidiaries of the Indian conglomerate have slumped in recent weeks after Hindenburg Research accused Adani Group of stock manipulation. The Indian company has repeatedly denied the allegations.

Meanwhile, the shares of Adani Green and Adani Total Gas are still up by a factor of two and eight, respectively, since Total invested in them.

TotalEnergies CEO Patrick Pouyanne said during an earnings presentation in Paris on Wednesday that they conducted due diligence before and after investing in the Adani companies. He further noted that “these companies have assets and revenue and are healthy”. 

Pending contract: Meanwhile, TotalEnergies hasn’t yet signed a contract that was announced last year to extend its partnership with Adani through the production of green hydrogen, Pouyanne said. That will have to wait for the result of the audit launched by the Indian conglomerate in response to the allegations of Hindenburg Research, he said.

  • Dividend and share buybacks: Meanwhile, TotalEnergies raised its dividend and announced further share buybacks this year after the oil and gas major’s adjusted profits doubled in 2022 as fossil fuel prices soared.
  • The group was hit by close to $15 billion in impairments last year as it began to retreat from Russia. Windfall taxes in Britain and Europe dragged on earnings on a net basis in the fourth quarter, sending them down 44% year on year.
  • Its net profits still rose in 2022 overall, to a record $20.5 billion, and surpassed analysts’ expectations on an adjusted basis, reaching $36 billion as the group joined rivals from Shell to BP in posting bumper results.
  • The company increased its dividend by 6.4% to €2.81 per share, on top of a €1% share special payout it had already announced, and said it would buy back another $2 billion worth of shares in the first quarter of 2023.
  • The oil and gas group was boosted by strong income from liquefied natural gas trading, as Russia’s war in Ukraine sent commodity prices soaring.

The backstory: Total has been in the spotlight over its exposure to Adani Group as one of the biggest foreign investors in businesses owned by the Indian company, which is under scrutiny following allegations of accounting fraud from a short seller.

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