UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
July 27, 2023
Commission File Number 001-10888
TotalEnergies SE
(Translation of registrant’s name into English)
2, place Jean Millier
La Défense 6
92400 Courbevoie
France
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN THE REGISTRATION STATEMENT ON FORM F-3 (NOS. 333-255641, 333-255641-01, 333-255641-02 AND 333-255641-03) OF TOTALENERGIES SE, TOTALENERGIES CAPITAL INTERNATIONAL, TOTALENERGIES CAPITAL CANADA LTD. AND TOTALENERGIES CAPITAL AND THE REGISTRATION STATEMENT ON FORM S-8 (NO. 333-271464) OF TOTALENERGIES SE, AND TO BE PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.
TotalEnergies SE is providing on this Form 6-K its results for the second quarter of 2023 and six months ended June 30, 2023, a description of certain recent developments relating to its business, as well as a capitalization table as of June 30, 2023.
EXHIBIT INDEX
Exhibit No. | Description |
| |
Exhibit 99.1 | Results for the Second Quarter of 2023 and Six Months ended June 30, 2023 |
| |
Exhibit 99.2 | |
| |
Exhibit 99.3 | |
| |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| TotalEnergies SE | ||
| | | |
| | | |
Date: July 27, 2023 | By: | /s/ MARIE-SOPHIE WOLKENSTEIN | |
| | Name: | Marie-Sophie Wolkenstein |
| | Title: | Company Treasurer |
Exhibit 99.1
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The terms "TotalEnergies", "TotalEnergies company" and "Company" in this exhibit are used to designate TotalEnergies SE and the consolidated entities directly or indirectly controlled by TotalEnergies SE.
The financial information on pages 1-40 of this exhibit concerning TotalEnergies with respect to the second quarter of 2023 and six months ended June 30, 2023 has been derived from TotalEnergies’ unaudited consolidated balance sheets as of June 30, 2023, unaudited statements of income, comprehensive income, cash flow and business segment information for the second quarter of 2023 and six months ended June 30, 2023 and unaudited consolidated statements of changes in shareholders’ equity for the six month ended June 30, 2023 on pages 33 et seq. of this exhibit.
The following discussion should be read in conjunction with the aforementioned financial statements and with the information, including TotalEnergies’ audited consolidated financial statements and related notes, provided in TotalEnergies’ Annual Report on Form 20-F for the year ended December 31, 2022, filed with the Securities and Exchange Commission (“SEC”) on March 24, 2023.
| A. | KEY FIGURES |
2Q23 | 1H23 | |||||||||||||
vs | In millions of dollars, except effective tax rate, | vs | ||||||||||||
2Q23 |
| 1Q23 |
| 2Q22 |
| 2Q22 |
| earnings per share and number of shares |
| 1H23 |
| 1H22 |
| 1H22 |
56,271 | 62,603 | 74,774 | -25% | Sales | 118,874 | 143,380 | -17% | |||||||
4,088 |
| 5,557 |
| 5,692 |
| -28% | Net income (TotalEnergies share) |
| 9,645 |
| 10,636 |
| -9% | |
267 |
| 960 |
| (1,546) |
| ns | Net income (loss) from equity affiliates |
| 1,227 |
| (1,503) |
| ns | |
11,105 | 14,167 | 18,737 | -41% | Adjusted EBITDA(1)(2) | 25,272 | 36,161 | -30% | |||||||
5,582 |
| 6,993 |
| 10,500 |
| -47% | Adjusted net operating income(3) from business segments |
| 12,575 |
| 19,958 |
| -37% | |
2,349 |
| 2,653 |
| 4,719 |
| -50% | Exploration & Production |
| 5,002 |
| 9,734 |
| -49% | |
1,330 |
| 2,072 |
| 2,215 |
| -40% | Integrated LNG |
| 3,402 |
| 5,348 |
| -36% | |
450 | 370 | 340 | +32% | Integrated Power | 820 | 258 | x3.2 | |||||||
1,004 |
| 1,618 |
| 2,760 |
| -64% | Refining & Chemicals |
| 2,622 |
| 3,880 |
| -32% | |
449 |
| 280 |
| 466 |
| -4% | Marketing & Services |
| 729 |
| 738 |
| -1% | |
1.64 |
| 2.21 |
| 2.16 |
| -24% | Fully-diluted earnings per share ($) |
| 3.86 |
| 4.02 |
| -4% | |
2,448 |
| 2,479 |
| 2,592 |
| -6% | Fully-diluted weighted-average shares (millions) |
| 2,460 |
| 2,602 |
| -5% | |
4,271 |
| 3,433 |
| 2,819 |
| +51% | Organic investments(4) |
| 7,704 |
| 4,800 |
| +60% | |
320 |
| 2,987 |
| 2,076 |
| -85% | Net acquisitions(5) |
| 3,307 |
| 2,998 |
| +10% | |
4,591 |
| 6,420 |
| 4,895 |
| -6% | Net investments(6) |
| 11,011 |
| 7,798 |
| +41% | |
9,900 | 5,133 | 16,284 | -39% | Cash flow from operating activities(7) | 15,033 | 23,901 | -37% | |||||||
of which | ||||||||||||||
2,125 |
| (3,419) |
| 2,498 |
| -15% |
| (increase) decrease in working capital |
| (1,294) |
| (2,425) |
| ns |
(112) | (153) | (399) | ns | financial charges | (265) | (767) | ns |
| (1) | Adjusted results are defined as income using replacement cost, adjusted for special items, excluding the impact of changes for fair value; adjustment items are on page 22. |
| (2) | Adjusted EBITDA is a non-GAAP measure. The definition of Adjusted EBITDA is available in the “Glossary” on page 31 et seq. of this exhibit. The reconciliation of net income (TotalEnergies share) to adjusted EBITDA is set forth under “Reconciliation of Net Income (TotalEnergies Share) To Adjusted EBITDA” on page 22 of this exhibit. |
| (3) | Adjusted results are defined as income using replacement cost, adjusted for special items, excluding the impact of changes for fair value; adjustment items are on page 22. |
| (4) | Organic investments = net investments excluding acquisitions, asset sales and other operations with non-controlling interests. |
| (5) | Net acquisitions = acquisitions - asset sales - other transactions with non-controlling interests (see page 27). |
| (6) | Net investments = organic investments + net acquisitions (see “Investments – Divestments’” on page 27). |
| (7) | See also “C. TotalEnergies results – Cash Flow”. The reconciliation table for various cash flow figures is set forth under “Cash Flow” on page 27 of this exhibit. |
1
Key figures of environment, greenhouse gas emissions (GHG) and production
Environment* – liquids and gas price realizations, refining margins
|
|
| 2Q23 |
|
|
|
|
| 2H23 | |||||
vs | vs | |||||||||||||
2Q23 | 1Q23 | 2Q22 | 2Q22 | 1H23 | 1H22 | 1H22 | ||||||||
78.1 |
| 81.2 |
| 113.9 |
| -31% | Brent ($/b) |
| 79.7 |
| 107.9 |
| -26% | |
2.3 |
| 2.8 |
| 7.5 |
| -69% | Henry Hub ($/Mbtu) |
| 2.5 |
| 6.1 |
| -58% | |
10.5 |
| 16.1 |
| 22.2 |
| -53% | NBP ($/Mbtu)** |
| 13.3 |
| 27.2 |
| -51% | |
10.9 |
| 16.5 |
| 27.0 |
| -60% | JKM ($/Mbtu)*** |
| 13.7 |
| 29.1 |
| -53% | |
72.0 |
| 73.4 |
| 102.9 |
| -30% | Average price of liquids ($/b) |
| 72.7 |
| 96.3 |
| -25% | |
5.98 |
| 8.89 |
| 11.01 |
| -46% | Average price of gas ($/Mbtu) |
| 7.48 |
| 11.65 |
| -36% | |
9.84 |
| 13.27 |
| 13.96 |
| -30% | Average price of LNG ($/Mbtu) |
| 11.59 |
| 13.77 |
| -16% | |
42.7 |
| 87.8 |
| 145.7 |
| -71% | Variable cost margin – Refining Europe, VCM ($/t)**** |
| 65.0 |
| 101.0 |
| -36% |
*The indicators are shown on page 32.
** | NBP (National Balancing Point) is a virtual natural gas trading point in the United Kingdom for transferring rights in respect of physical gas and which is widely used as a price benchmark for the natural gas markets in Europe. NBP is operated by National Grid Gas plc, the operator of the UK transmission network. |
*** | JKM (Japan-Korea Marker) measures the prices of spot LNG trades in Asia. It is based on prices reported in spot market trades and/or bids and offers collected after the close of the Asian trading day at 16:30 Singapore time. |
**** | This indicator represents TotalEnergies’ average margin on variable cost for refining in Europe (equal to the difference between TotalEnergies European refined product sales and crude oil purchases with associated variable costs divided by volumes refined in tons). |
Greenhouse gas emissions (GHG)(1)
2Q23 |
| 1Q23 |
| 2Q22 |
| 2Q23 |
| Scope 1+2 emissions (MtCO2e) |
| 1H23 |
| 1H22 |
| 1H23 |
9.1 |
| 9.1 |
| 9.6 |
| -6% | Scope 1+2 from operated facilities(2) |
| 18.2 |
| 19.3 |
| -6% | |
7.9 |
| 7.6 |
| 8.1 |
| -2% | of which Oil & Gas |
| 15.5 |
| 16.0 |
| -3% | |
1.1 |
| 1.5 |
| 1.5 |
| -27% | of which CCGT |
| 2.6 |
| 3.3 |
| -21% | |
12.5 |
| 12.8 |
| 13.4 |
| -7% | Scope 1+2 - equity share |
| 25.3 |
| 27.4 |
| -8% |
Estimated 2Q23 and 1Q23 emissions.
Scope 1+2 emissions from operated installations were down 6% year-on-year in the second quarter of 2023, as a result of the decrease in the use of gas-fired power plants in a context of lower demand in Europe and the continuous decline in flaring on Exploration & Production facilities.
2Q23 |
| 1Q23 |
| 2Q22 |
| 2Q23 |
| Methane emissions (ktCH4) |
| 1H23 |
| 1H22 |
| 1H23 |
8 |
| 9 |
| 10 |
| -19% | Methane emissions from operated facilities |
| 18 |
| 20 |
| -13% | |
10 |
| 11 |
| 13 |
| -22% |
| Methane emissions - equity share |
| 21 |
| 24 |
| -15% |
Estimated 2Q23 and 1Q23 emissions.
Scope 3 emissions (MtCO2e) |
| 1H23 |
| 2022 |
Scope 3 from Oil, Biofuels and Gas Worldwide(3) |
| est. 180 |
| 389 |
(1) | The six greenhouse gases in the Kyoto protocol, namely CO2, CH4, N2O, HFCs, PFCs and SF6, with their respective GWP (Global Warming Potential) as described in the 2007 IPCC report. HFCs, PFCs and SF6 are virtually absent from the Company’s emissions or are considered as non-material and are therefore not counted. |
(2) | Scope 1+2 GHG emissions of operated facilities are defined as the sum of direct emissions of greenhouse gases from sites or activities that are included in the scope of reporting (as defined in the Company’s 2022 annual report on Form 20-F filed on March 24, 2023) and indirect emissions attributable to brought-in energy (electricity, heat, steam), excluding purchased industrial gases (H2). |
(3) | TotalEnergies reports Scope 3 GHG emissions, category 11, which correspond to indirect GHG emissions related to the use by customers of energy products, i.e., combustion of the products to obtain energy. The Company follows the oil & gas industry reporting guidelines published by IPIECA, which comply with the GHG Protocol methodologies. In order to avoid double counting, this methodology accounts for the largest volume in the oil, biofuels and gas value chains, i.e., the higher of the two production volumes or sales to end customers. The highest point for each value chain for 2023 will be evaluated considering realizations over the full year, TotalEnergies gradually providing quarterly estimates. |
2
Production*
| 2Q23 |
|
|
|
|
| 1H23 | |||||||
vs | vs | |||||||||||||
2Q23 | 1Q23 | 2Q22 | 2Q22 | Hydrocarbon production | 1H23 | 1H22 | 1H22 | |||||||
2,471 |
| 2,524 | 2,738 | -10% | Hydrocarbon production (kboe/d) |
| 2,498 |
| 2,791 |
| -10% | |||
1,416 |
| 1,398 | 1,268 | +12% | Oil (including bitumen) (kb/d) |
| 1,407 |
| 1,287 |
| +9% | |||
1,055 | 1,126 | 1,470 | -28% | Gas (including condensates and associated NGL) (kboe/d) | 1,091 | 1,504 | -27% | |||||||
2,471 | 2,524 | 2,738 | -10% | Hydrocarbon production (kboe/d) | 2,498 | 2,791 | -10% | |||||||
1,571 | 1,562 | 1,483 | +6% | Liquids (kb/d) | 1,567 | 1,505 | +4% | |||||||
4,845 | 5,191 | 6,835 | -29% | Gas (Mcf/d) | 5,017 | 6,997 | -28% | |||||||
2,471 | 2,524 | 2,412 | +2% | Hydrocarbon production excluding Novatek (kboe/d) | 2,498 | 2,460 | +2% |
* Company production = Exploration & Production production + Integrated LNG production.
Hydrocarbon production was 2,471 thousand barrels of oil equivalent per day (kboe/d) in the second quarter of 2023, up 2% year-on-year (excluding Novatek), comprised of:
| ● | +4% due to start-ups and ramp-ups, including Ikike in Nigeria, Mero 1 in Brazil, Johan Sverdrup Phase 2 in Norway and Block 10 in Oman, |
| ● | +1% due to the improvement of security conditions in Nigeria and Libya, |
| ● | +1% price effect, |
| ● | -1% portfolio effect, notably related to the end of the Bongkot operating licenses in Thailand, the exit from Termokarstovoye in Russia, partially offset by the entry into the producing fields of Sepia and Atapu in Brazil and SARB Umm Lulu in the United Arab Emirates, |
| ● | -3% due to natural decline of the fields. |
Compared to the first quarter of 2023, production was down 2% mainly due to planned maintenance operations in the North Sea and the end of the Bongkot operating licenses in Thailand, partially offset by the full effect of entry into the producing fields of SARB Umm Lulu in the United Arab Emirates, and the ramp-up of Johan Sverdrup Phase 2 in Norway.
B.ANALYSIS OF BUSINESS SEGMENT RESULTS
Financial information by business segment is reported in accordance with the internal reporting system and shows internal segment information that is used to manage and measure the performance of TotalEnergies and which is reviewed by the main operational decision-making body of TotalEnergies, namely the Executive Committee.
Management presents adjusted financial indicators to assist investors in better understanding, in conjunction with the Company’s financial results presented in accordance with IFRS, the economic performance of the Company. Adjustment items are of three types: inventory valuation effect, effect of changes in fair value, and special items.
Inventory valuation effect: in accordance with IAS 2, TotalEnergies values inventories of petroleum products in its financial statements according to the First-In, First-Out (FIFO) method and other inventories using the weighted-average cost method. Under the FIFO method, the cost of inventory is based on the historic cost of acquisition or manufacture rather than the current replacement cost. In volatile energy markets, this can have a significant distorting effect on the reported income. Accordingly, the adjusted results of the Refining & Chemicals and Marketing & Services segments are presented according to the replacement cost method. This method is used to assess the segments’ performance and facilitate the comparability of the segments’ performance with those of its main competitors. in the replacement cost method, which approximates the Last-In, First-Out (LIFO) method, the variation of inventory values in the statement of income is, depending on the nature of the inventory, determined using either the month-end price differential between one period and another or the average prices of the period rather than the historical value. The inventory valuation effect is the difference between the results under the FIFO and replacement cost methods.
3
Effect of changes in fair value: the effect of changes in fair value presented as an adjustment item reflects, for trading inventories and storage contracts, differences between internal measures of performance used by TotalEnergies’ Executive Committee and the accounting for these transactions under IFRS. IFRS requires that trading inventories be recorded at their fair value using period-end spot prices. In order to best reflect the management of economic exposure through derivative transactions, internal indicators used to measure performance include valuations of trading inventories based on forward prices. TotalEnergies, in its trading activities, enters into storage contracts, the future effects of which are recorded at fair value in TotalEnergies’ internal economic performance. IFRS precludes recognition of this fair value effect. Furthermore, TotalEnergies enters into derivative instruments to risk manage certain operational contracts or assets. Under IFRS, these derivatives are recorded at fair value while the underlying operational transactions are recorded as they occur. Internal indicators defer the fair value on derivatives to match with the transaction occurrence.
Special items: due to their unusual nature or particular significance, certain transactions qualifying as “special items” are excluded from the business segment figures. In general, special items relate to transactions that are significant, infrequent or unusual. In certain instances, certain transactions such as restructuring costs or asset disposals, which are not considered to be representative of the normal course of business, may qualify as special items although they may have occurred in prior years or are likely to occur again in following years.
For further information on the adjustments affecting operating income and net operating income on a segment-by-segment basis, and for a reconciliation of segment figures to figures reported in TotalEnergies’ interim consolidated financial statements, see pages 46 et seq. of this exhibit.
TotalEnergies measures performance at the segment level on the basis of performance indicators excluding the adjustment items, such as adjusted incomes and ROACE in order to facilitate the analysis of the financial performance and the comparison of income between periods. The definition of these performance indicators is available in the “Glossary” on page 31 et seq. of this exhibit.
The financial information is broken down by business segment prior to the consolidation and inter-segment adjustments.
Sales prices between business segments approximate market prices.
The profitable growth in the LNG and power integrated value chains are two of the key axes of TotalEnergies’ strategy.
In order to give more visibility to these businesses, the Board of Directors has decided that from the first quarter 2023, integrated LNG and integrated Power results, previously grouped in the integrated Gas, Renewables & Power (iGRP) segment, would be reported separately as two segments.
A new reporting structure for the business segments’ financial information has been put in place, effective January 1, 2023. It is based on the following five business segments:
- | An Exploration-Production segment; |
- | An integrated LNG segment covering LNG production and trading activities as well as biogas, hydrogen and gas trading activities; |
- | An integrated Power segment covering generation, storage, electricity trading and B2B-B2C distribution of gas and electricity; |
- | A Refining & Chemicals segment constituting a major industrial hub comprising the activities of refining, petrochemicals and specialty chemicals. This segment also includes the activities of Oil Supply, Trading and Marine Shipping; |
- | A Marketing & Services segment including the global activities of supply and marketing in the field of petroleum products; |
In addition, the Corporate segment includes holdings operating and financial activities.
This new segment reporting has been prepared in accordance with IFRS 8 and according to the same principles as the internal reporting followed by TotalEnergies' Executive Committee.
4
For the integrated LNG and integrated Power segments, the principles for the preparation of this segment information are as follows:
- | The management of balance sheet positions (including margin calls) related to centralized markets access for LNG, gas and power activities since 2022 has been fully included in the integrated LNG segment. |
- | Effects of changes in the fair value of gas and LNG positions are allocated to the operating income of integrated LNG segment. |
- | Effects of changes in the fair value of power positions are allocated to the operating income of integrated Power segment. |
Due to the change in the Company's internal organizational structure affecting the composition of the business segments, the segment reporting data for the years 2021 and 2022 has been restated.
5
B.1 Exploration & Production
1. Production
|
| 2Q23 |
|
|
|
| 1H23 | |||||||
vs | vs | |||||||||||||
2Q23 | 1Q23 | 2Q22 | 2Q22 | Hydrocarbon production | 1H23 | 1H22 | 1H22 | |||||||
2,033 |
| 2,061 |
| 2,276 | -11% | EP (kboe/d) |
| 2,047 |
| 2,314 |
| -12% | ||
1,512 |
| 1,500 |
| 1,430 | +6% | Liquids (kb/d) |
| 1,506 |
| 1,449 |
| +4% | ||
2,778 |
| 3,012 |
| 4,602 | -40% | Gas (Mcf/d) |
| 2,895 |
| 4,706 |
| -38% | ||
2,033 |
| 2,061 |
| 2,007 | +1% | EP excluding Novatek (kboe/d) |
| 2,047 |
| 2,040 |
| – |
2. Results
|
| 2Q23 |
|
|
|
| 1H23 | |||||||
vs | In millions of dollars, except tax on net operating | vs | ||||||||||||
2Q23 | 1Q23 | 2Q22 | 2Q22 | income and effective tax rate | 1H23 | 1H22 | 1H22 | |||||||
1,434 |
| 1,954 |
| 2,521 | -43% | External sales |
| 3,388 |
| 4,672 |
| -27% | ||
4,263 |
| 5,854 |
| 8,454 | -50% | Operating income |
| 10,117 |
| 16,054 |
| -37% | ||
2,359 |
| 2,524 |
| 910 | x2.6 | Net operating income |
| 4,883 |
| 4,889 |
| 0% | ||
(15) |
| 68 |
| (3,668) | ns | Net income (loss) from equity affiliates and other items |
| 53 |
| (3,426) |
| ns | ||
49.7% | 57.1% | 47.2% | – | Effective tax rate* | 53.9% | 47.1% | – | |||||||
(1,889) |
| (3,398) |
| (3,876) | ns | Tax on net operating income |
| (5,287) |
| (7,739) |
| ns | ||
(10) |
| 129 |
| 3,809 | ns | Adjustments affecting net operating income |
| 119 |
| 4,845 |
| ns | ||
2,349 |
| 2,653 |
| 4,719 | -50% | Adjusted net operating income** |
| 5,002 |
| 9,734 |
| -49% | ||
149 |
| 135 |
| 287 | -48% | including income from equity affiliates |
| 284 |
| 642 |
| -56% | ||
2,424 |
| 2,134 |
| 1,873 | +29% | Organic investments |
| 4,558 |
| 3,299 |
| +38% | ||
176 |
| 1,938 |
| 2,225 | -92% | Net acquisitions |
| 2,114 |
| 2,541 |
| -17% | ||
2,600 |
| 4,072 |
| 4,098 | -37% | Net investments |
| 6,672 |
| 5,840 |
| +14% |
* | Tax on adjusted net operating income / (adjusted net operating income - income from equity affiliates - dividends received from investments - impairment of goodwill + tax on adjusted net operating income). |
** | Detail of adjustment items shown in the business segment information starting on page 46 of this exhibit. |
Exploration & Production Net operating income was:
| ● | $2,359 million in the second quarter of 2023, down 7% quarter-on-quarter, |
| ● | $4,883 million in the first half 2023, in line with the first half 2022. |
Exploration & Production adjusted net operating income was:
| ● | $2,349 million in the second quarter of 2023, down 11% quarter-on-quarter, mainly due to lower oil and gas prices, |
| ● | $5,002 million in the first half 2023, down 49% compared to the first half 2022. |
Adjusted net operating income for the Exploration & Production segment excludes special items. In the second quarter of 2023, the exclusion of special items had a negative impact of $10 million on the segment’s adjusted net operating income, compared to a positive impact of $3,809 million in the second quarter of 2022.
The segment's cash flow from operating activities was:
| ● | $4,047 million in the second quarter of 2023, down 11% quarter-on-quarter, |
| ● | $8,583 million in the first half 2023, down 41% compared to the first half 2022. |
The segment’s operating cash flow before working capital changes without financial charges except those related to leases (DACF)1 was:
| ● | $4,364 million in the second quarter of 2023, down 11% quarter-on-quarter, mainly due to lower gas and oil prices, |
| ● | $9,271 million in the first half 2023, down 37% compared to the first half 2022. |
1 The definition of Operating cash flow before working capital changes and Debt adjusted cash flow (DACF) are available on the “Glossary” on page 31 et seq. of this exhibit. The reconciliation of Cash flow from operating activities to Debt adjusted cash flow (DACF) is set forth under “Cash flow by Segment” on page 28 et seq. of this exhibit. For information on the replacement cost method, refer to “B. Analysis of Business Segment Results”, above.
6
B.2 Integrated LNG
1.Production
2Q23 | 1H23 | |||||||||||||
vs | vs | |||||||||||||
2Q23 |
| 1Q23 |
| 2Q22 |
| 2Q22 |
| Hydrocarbon production for LNG |
| 1H23 |
| 1H22 |
| 1H22 |
438 |
| 463 |
| 462 |
| -5% | Integrated LNG (kboe/d) |
| 451 |
| 477 |
| -6% | |
59 | 62 | 53 | +11% | Liquids (kb/d) | 61 | 56 | +7% | |||||||
2,067 |
| 2,179 |
| 2,233 |
| -7% | Gas (Mcf/d) |
| 2,122 |
| 2,291 |
| -7% | |
438 |
| 463 |
| 405 |
| +8% | Integrated LNG excluding Novatek (kboe/d) |
| 451 |
| 419 |
| +8% |
|
|
| 2Q23 |
|
|
|
| 1H23 | ||||||
vs | vs | |||||||||||||
2Q23 | 1Q23 | 2Q22 | 2Q22 | Liquefied Natural Gas in Mt | 1H23 | 1H22 | 1H22 | |||||||
11.0 |
| 11.0 |
| 11.7 |
| -6% | Overall LNG sales |
| 22.0 |
| 24.9 |
| -12% | |
3.6 |
| 4.0 |
| 4.1 |
| -12% | Incl. Sales from equity production* |
| 7.6 |
| 8.6 |
| -12% | |
10.0 |
| 9.9 |
| 10.2 |
| -2% | Incl. Sales by TotalEnergies from equity production and third party purchases |
| 19.9 |
| 22.2 |
| -10% |
| * | The Company’s equity production may be sold by TotalEnergies or by the joint ventures. |
Hydrocarbon production for LNG was up 8% year-on-year in the second quarter of 2023 and first half 2023, due to the increased supply of NLNG following improved security conditions in Nigeria and the restart of Snøhvit in Norway during the second quarter of 2022.
LNG sales decreased year-on-year due to lower demand in Europe and are stable quarter-on-quarter, benefitting from the restart of Freeport LNG.
2. Results
|
|
| 2Q23 |
|
|
|
| 1H23 | ||||||
vs | In millions of dollars, except tax on net operating | vs | ||||||||||||
2Q23 | 1Q23 | 2Q22 | 2Q22 | income | 1H23 | 1H22 | 1H22 | |||||||
2,020 |
| 4,872 |
| 3,901 | -48% | External sales |
| 6,892 |
| 9,408 |
| -27% | ||
724 |
| 1,138 |
| 1,421 | -49% | Operating income |
| 1,862 |
| 3,262 |
| -43% | ||
1,059 |
| 1,737 |
| 1,755 | -40% | Net operating income |
| 2,796 |
| 840 |
| x3.3 | ||
472 |
| 804 |
| 626 | -25% | Net income (loss) from equity affiliates and other items |
| 1,276 |
| (1,869) |
| ns | ||
(137) |
| (205) |
| (292) | ns | Tax on net operating income |
| (342) |
| (553) |
| ns | ||
271 |
| 335 |
| 460 | -41% | Adjustments affecting net operating income |
| 606 |
| 4,508 |
| -87% | ||
1,330 |
| 2,072 |
| 2,215 | -40% | Adjusted net operating income* |
| 3,402 |
| 5,348 |
| -36% | ||
432 |
| 786 |
| 1,192 | -64% | including income from equity affiliates |
| 1,218 |
| 2,596 |
| -53% | ||
382 |
| 396 |
| 171 | x2.2 | Organic investments |
| 779 |
| 110 |
| x7.1 | ||
205 |
| 759 |
| (36) | ns | Net acquisitions |
| 964 |
| (56) |
| ns | ||
587 |
| 1,155 |
| 135 | x4.3 | Net investments |
| 1,743 |
| 54 |
| x32.3 |
* | Detail of adjustment items shown in the business segment information starting on page 46 of this exhibit. |
7
Integrated LNG Net operating income was:
| ● | $1,059 million in the second quarter of 2023, down 39% quarter-on-quarter, |
| ● | $2,796 million in the first half 2023, 3.3 times higher compared to the first half 2022. |
Integrated LNG adjusted net operating income was:
| ● | $1,330 million in the second quarter of 2023, down 28% year-on-year (excluding Novatek) and 36% quarter-on-quarter, mainly due to lower spot and forward LNG prices, |
| ● | $3,402 million in the first half 2023, down 26% year-on-year (excluding Novatek), due to lower prices and LNG sales, as well as exceptional trading results in the first quarter 2022. |
Adjusted net operating income for the iLNG segment excludes special items and the impact of changes in fair value. In the second quarter of 2023, the exclusion of special items had a positive impact of $271 million on the segment’s adjusted net operating income, compared to a positive impact of $460 million in the second quarter of 2022.
The segment’s cash flow from operating activities was:
| ● | $1,332 million in the second quarter of 2023 down 62% quarter-to-quarter, |
| ● | $4,868 million in the first half 2023, down 19% compared to the first half 2022. |
The segment’s operating cash flow before working capital changes without financial charges except those related to leases (DACF)2 was:
| ● | $1,801 million in the second quarter of 2023, down 15% year-on-year (excluding Novatek), and 13% quarter-on-quarter due to lower LNG prices, partially offset by higher margins secured in 2022 on LNG cargoes to be delivered in 2023, |
| ● | $3,882 million in the first half 2023, down 16% year-on-year (excluding Novatek), for the same reasons. |
2 The definition of Operating cash flow before working capital changes and Debt adjusted cash flow (DACF) are available on the “Glossary” on page 31 et seq. of this exhibit. The reconciliation of Cash flow from operating activities to Debt adjusted cash flow (DACF) is set forth under “Cash flow by Segment” on page 28 et seq. of this exhibit. For information on the replacement cost method, refer to “B. Analysis of Business Segment Results”, above.
8
B.3 Integrated Power
1. Capacities, productions, clients and sales
2Q23 | 1H23 | |||||||||||||
vs | vs | |||||||||||||
2Q23 |
| 1Q23 |
| 2Q22 |
| 2Q22 |
| Integrated Power |
| 1H23 |
| 1H22 |
| 1H22 |
74.7 |
| 70.4 |
| 50.7 |
| +47% | Portfolio of renewable power generation gross capacity (GW) (1),(2) |
| 74.7 |
| 50.7 |
| +47% | |
19.0 |
| 17.9 |
| 11.6 |
| +63% | o/w installed capacity |
| 19.0 |
| 11.6 |
| +63% | |
5.7 |
| 6.2 |
| 5.2 |
| +11% | o/w capacity in construction |
| 5.7 |
| 5.2 |
| +11% | |
50.0 |
| 46.3 |
| 33.9 |
| +47% | o/w capacity in development |
| 50.0 |
| 33.9 |
| +47% | |
46.9 |
| 44.4 |
| 38.4 |
| +22% | Portfolio of renewable power generation net capacity (GW) (2) |
| 46.9 |
| 38.4 |
| +22% | |
8.9 |
| 8.4 |
| 5.8 |
| +53% | o/w installed capacity |
| 8.9 |
| 5.8 |
| +53% | |
3.9 |
| 4.0 |
| 3.7 |
| +7% | o/w capacity in construction |
| 3.9 |
| 3.7 |
| +7% | |
34.1 |
| 32.0 |
| 28.9 |
| +18% | o/w capacity in development |
| 34.1 |
| 28.9 |
| +18% | |
5.8 |
| 5.8 |
| 5.8 |
| – | Gas-fired power generation gross installed capacity (GW) (2) |
| 5.8 |
| 5.8 |
| – | |
4.3 |
| 4.3 |
| 4.3 |
| – | Gas-fired power generation net installed capacity (GW) (2) |
| 4.3 |
| 4.3 |
| – | |
8.2 |
| 8.4 |
| 7.7 |
| +8% | Net power production (TWh) (3) |
| 16.6 |
| 15.2 |
| +9% | |
4.2 |
| 3.8 |
| 2.5 |
| +69% | Incl. power production from renewables |
| 8.1 |
| 4.7 |
| +70% | |
6.0 |
| 6.0 |
| 6.2 |
| -3% | Clients power – BtB and BtC (Million) (2) |
| 6.0 |
| 6.2 |
| -3% | |
2.8 |
| 2.8 |
| 2.7 |
| +1% | Clients gas – BtB and BtC (Million) (2) |
| 2.8 |
| 2.7 |
| +1% | |
11.5 |
| 15.5 |
| 12.3 |
| -7% | Sales power – BtB and BtC (TWh) |
| 27.0 |
| 28.6 |
| -6% | |
19.2 |
| 37.3 |
| 19.1 |
| – | Sales gas – BtB and BtC (TWh) |
| 56.4 |
| 54.1 |
| +4% |
(1) | Includes 20% of Adani Green Energy Ltd’s gross capacity effective first quarter 2021, 50% of Clearway Energy Group’s gross capacity effective third quarter 2022 and 49% of Casa dos Ventos’ gross capacity effective first quarter 2023. |
(2) | End of period data. |
(3) | Solar, wind, hydroelectric and combined-cycle gas turbine (CCGT) plants. |
Net power production was:
| ● | 8.2 TWh in the second quarter of 2023, up 8% year-on-year, as growing electricity generation from renewables was partially offset by lower generation from flexible capacity in a context of lower demand, |
| ● | 16.6 TWh in the first half 2023, up 9% year-on-year, for the same reasons. |
Gross installed renewable power generation capacity was 19 GW at the end of the second quarter of 2023, up by more than 1 GW quarter-on-quarter, including 0.5 GW installed in the USA and the connection of 0.3 GW from the Seagreen offshore wind project in the UK.
2. Results
2Q23 | 1H23 | |||||||||||||
vs | In millions of dollars, except tax on net operating | vs | ||||||||||||
2Q23 |
| 1Q23 |
| 2Q22 |
| 2Q22 |
| income |
| 1H23 |
| 1H22 |
| 1H22 |
6,249 |
| 8,555 |
| 6,380 |
| -2% | External sales |
| 14,804 |
| 13,167 |
| 12% | |
534 |
| 362 |
| (575) |
| ns | Operating income |
| 896 |
| (604) |
| ns | |
243 |
| 181 |
| (346) |
| ns | Net operating income |
| 424 |
| (413) |
| ns | |
(250) |
| (70) |
| 197 |
| ns | Net income (loss) from equity affiliates and other items |
| (320) |
| 192 |
| ns | |
(41) |
| (111) |
| 32 |
| ns | Tax on net operating income |
| (152) |
| (1) |
| ns | |
207 |
| 189 |
| 686 |
| -70% | Adjustments affecting net operating income |
| 396 |
| 671 |
| -41% | |
450 |
| 370 |
| 340 |
| +32% | Adjusted net operating income* |
| 820 |
| 258 |
| x3.2 | |
23 |
| 56 |
| 27 |
| -15% | including income from equity affiliates |
| 79 |
| 53 |
| +49% | |
753 |
| 577 |
| 170 |
| x4.4 | Organic investments |
| 1,330 |
| 489 |
| x2.7 | |
(42) |
| 519 |
| (22) |
| ns |
| Net acquisitions |
| 477 |
| 639 |
| -25% |
711 |
| 1,096 |
| 148 |
| x4.8 | Net investments |
| 1,807 |
| 1,128 |
| +60% |
* | Detail of adjustment items shown in the business segment information starting on page 46 of this exhibit. |
9
Integrated Power Net operating income was:
| ● | $243 million in the second quarter of 2023, up 34% quarter-on-quarter, |
| ● | $424 million in the first half 2023, compared to $(413) million in the first half 2022. |
Integrated Power adjusted net operating income was $450 million, up 22% quarter-on-quarter, due to the performance of its integrated electricity portfolio.
Adjusted net operating income for the Integrated Power segment excludes special items and the impact of changes in fair value. In the second quarter of 2023, the exclusion of special items had a positive impact of $207 million on the segment’s adjusted net operating income, compared to a positive impact of $686 million in the second quarter of 2022.
The segment’s cash flow from operating activities excluding margin calls, reported in the Integrated LNG segment since the implementation in 2022 of its centralized management was:
| ● | $2,284 million in the second quarter of 2023, compared to $(1,285) million in the first quarter 2023, |
| ● | $999 million in the first half 2023, compared to $(1,736) million in the first half 2022. |
The segment’s operating cash flow before working capital changes without financial charges except those related to leases (DACF)3 was:
| ● | $491 million in the second quarter of 2023, up 12% quarter-on-quarter, |
| ● | $931 million in the first half 2023, 2.7 times higher than the first half 2022. |
3 The definition of Operating cash flow before working capital changes and Debt adjusted cash flow (DACF) are available on the “Glossary” on page 31 et seq. of this exhibit. The reconciliation of Cash flow from operating activities to Debt adjusted cash flow (DACF) is set forth under “Cash flow by Segment” on page 28 et seq. of this exhibit. For information on the replacement cost method, refer to “B. Analysis of Business Segment Results”, above.
10
B.4 Downstream (Refining & Chemicals and Marketing & Services)
1. Results
|
| 2Q23 |
|
|
|
| 1H23 | |||||||
vs | In millions of dollars, except tax on net operating | vs | ||||||||||||
2Q23 | 1Q23 | 2Q22 | 2Q22 | income | 1H23 | 1H22 | 1H22 | |||||||
46,561 |
| 47,214 |
| 61,968 | -25% | External sales |
| 93,775 |
| 116,125 |
| -19% | ||
1,306 |
| 1,708 |
| 4,958 | -74% | Operating income |
| 3,014 |
| 7,955 |
| -62% | ||
1,024 |
| 1,559 |
| 4,243 | -76% | Net operating income |
| 2,583 |
| 6,604 |
| -61% | ||
67 |
| 295 |
| 447 | -85% | Net income (loss) from equity affiliates and other items |
| 362 |
| 561 |
| -35% | ||
(349) |
| (444) |
| (1,162) | ns | Tax on net operating income |
| (793) |
| (1,912) |
| ns | ||
429 |
| 339 |
| (1,017) | ns | Adjustments affecting net operating income |
| 768 |
| (1,986) |
| ns | ||
1,453 |
| 1,898 |
| 3,226 | -55% | Adjusted net operating income* |
| 3,351 |
| 4,618 |
| -27% | ||
686 |
| 290 |
| 586 | +17% | Organic investments |
| 976 |
| 878 |
| +11% | ||
(19) |
| (229) |
| (91) | ns | Net acquisitions |
| (248) |
| (125) |
| ns | ||
667 |
| 61 |
| 495 | +35% | Net investments |
| 728 |
| 753 |
| -3% |
| * | Detail of adjustment items shown in the business segment information starting on page 46 of this exhibit. |
B.5 Refining & Chemicals
1. Refinery and petrochemicals throughput and utilization rates
|
| 2Q23 |
|
|
|
| 1H23 | |||||||
vs | vs | |||||||||||||
2Q23 | 1Q23 | 2Q22 | 2Q22 | Refinery throughput and utilization rate* | 1H23 | 1H22 | 1H22 | |||||||
1,472 |
| 1,403 |
| 1,575 | -7% | Total refinery throughput (kb/d) |
| 1,437 |
| 1,448 |
| -1% | ||
364 |
| 357 |
| 395 | -8% | France |
| 360 |
| 324 |
| +11% | ||
601 |
| 596 |
| 648 | -7% | Rest of Europe |
| 598 |
| 627 |
| -5% | ||
507 |
| 450 |
| 532 | -5% | Rest of world |
| 479 |
| 497 |
| -4% | ||
82% | 78% | 88% |
| Utilization rate based on crude only** |
| 80% | 81% |
|
* | Includes refineries in Africa reported in the Marketing & Services segment. |
** | Based on distillation capacity at the beginning of the year. |
|
| 2Q23 |
|
|
|
| 1H23 | |||||||
vs | vs | |||||||||||||
2Q23 | 1Q23 | 2Q22 | 2Q22 | Petrochemicals production and utilization rate | 1H23 | 1H22 | 1H22 | |||||||
1,157 |
| 1,295 |
| 1,206 | -4% | Monomers* (kt) |
| 2,452 |
| 2,611 |
| -6% | ||
963 |
| 1,111 |
| 1,187 | -19% | Polymers (kt) |
| 2,074 |
| 2,461 |
| -16% | ||
67% | 75% | 71% | – |
| Steamcracker utilization rate** | 71% | 78% | – |
* | Olefins. |
** | Based on olefins production from steam crackers and their treatment capacity at the start of the year. |
Refining throughput was:
| ● | down 7% year-on-year in the second quarter of 2023, notably due to planned maintenance and unplanned shutdowns at the Antwerp refinery in Belgium, and logistical limitations linked to high inventory levels at the Normandy refinery in France, |
| ● | down 1% year-on-year in the first half 2023, reflecting the restart of the Donges refinery in France in the second quarter of 2022. |
The utilization rate on processed crude rose over the quarter to 82% given the end of strikes in France.
Polymer production was down year-on-year by 19% in the second quarter of 2023 and 16% in the first half 2023, due to the slowdown in global demand.
11
2. Results
|
|
| 2Q23 |
|
|
|
| 1H23 | ||||||
vs | In millions of dollars, except tax on net operating | vs | ||||||||||||
2Q23 | 1Q23 | 2Q22 | 2Q22 | income | 1H23 | 1H22 | 1H22 | |||||||
24,849 |
| 24,855 |
| 35,061 |
| -29% | External sales |
| 49,704 |
| 66,069 |
| -25% | |
812 |
| 1,426 |
| 4,029 |
| -80% | Operating income |
| 2,238 |
| 6,331 |
| -65% | |
628 |
| 1,153 |
| 3,512 |
| -82% | Net operating income |
| 1,781 |
| 5,445 |
| -67% | |
3 |
| 52 |
| 349 |
| -99% | Net income (loss) from equity affiliates and other items |
| 55 |
| 505 |
| -89% | |
(187) |
| (325) |
| (866) |
| ns | Tax on net operating income |
| (512) |
| (1,391) |
| ns | |
376 |
| 465 |
| (752) |
| ns | Adjustments affecting net operating income |
| 841 |
| (1,565) |
| ns | |
1,004 |
| 1,618 |
| 2,760 |
| -64% | Adjusted net operating income* |
| 2,622 |
| 3,880 |
| -32% | |
454 |
| 198 |
| 313 |
| +45% | Organic investments |
| 652 |
| 510 |
| +28% | |
(15) |
| 5 |
| (34) |
| ns | Net acquisitions |
| (10) |
| (34) |
| ns | |
439 |
| 203 |
| 279 |
| +57% | Net investments |
| 642 |
| 476 |
| +35% |
* | Detail of adjustment items shown in the business segment information starting on page 46 of this exhibit. |
Refining & Chemicals Net operating income was:
| ● | $628 million in the second quarter of 2023, down 46% quarter-on-quarter, |
| ● | $1,781 million in the first half 2023, down 67% compared to the first half 2022. |
Refining & Chemicals adjusted net operating income was:
| ● | $1,004 million in the second quarter of 2023, down 38% quarter-on-quarter, reflecting lower refining margins in Europe impacted at the start of the period by Chinese exports and the quicker than anticipated reorganization of Russian flows following the European embargo, although supported at the end of the quarter by higher gasoline exports to the US and lower diesel imports in Europe from China, |
| ● | $2,622 million in the first half 2023, down 32% year-on-year, for the same reasons. |
Adjusted net operating income for the Refining & Chemicals segment excludes any after-tax inventory valuation effect and special items. In the second quarter of 2023, the exclusion of the inventory valuation effect had a positive impact of $332 million on the segment’s adjusted net operating income, compared to a negative impact of $752 million in the second quarter of 2022. In the second quarter of 2023, the exclusion of special items had a positive impact of $44 million on the segment’s adjusted net operating income, compared to no impact in the second quarter of 2022.
The segment’s cash flow from operating activities was:
| ● | $1,923 million in the second quarter of 2023, compared to $(851) millions in the first quarter 2023, |
| ● | $1,072 million in the first half 2023, down 77% compared to the first half 2022. |
The segment’s operating cash flow before working capital changes without financial charges except those related to leases (DACF)4 was:
| ● | $1,329 million in the second quarter of 2023, down 55% year-on-year, |
| ● | $3,062 million in the first half 2023, down 30% compared to the first half 2022 as the second quarter of 2022 benefited from exceptional conditions. |
4 The definition of Operating cash flow before working capital changes and Debt adjusted cash flow (DACF) are available on the “Glossary” on page 31 et seq. of this exhibit. The reconciliation of Cash flow from operating activities to Debt adjusted cash flow (DACF) is set forth under “Cash flow by Segment” on page 28 et seq. of this exhibit. For information on the replacement cost method, refer to “B. Analysis of Business Segment Results”, above.
12
B.6 Marketing & Services
1. Petroleum product sales
|
|
| 2Q23 |
|
|
|
| 1H23 | ||||||
vs | vs | |||||||||||||
2Q23 | 1Q23 | 2Q22 | 2Q22 | Sales in kb/d* | 1H23 | 1H22 | 1H22 | |||||||
1,397 |
| 1,360 |
| 1,477 |
| -5% | Total Marketing & Services sales |
| 1,379 |
| 1,464 |
| -6% | |
799 |
| 757 |
| 817 |
| -2% | Europe |
| 778 |
| 804 |
| -3% | |
598 |
| 602 |
| 660 |
| -9% | Rest of world |
| 600 |
| 661 |
| -9% |
| * | Excludes trading and bulk refining sales. |
Sales of petroleum products were down year-on-year by 5% in the second quarter of 2023 and 6% in the first half 2023, as lower demand from commercial and industrial customers in Europe and the portfolio effect linked to the disposal of 50% of the fuel distribution business in Egypt were partially offset by the recovery in the aviation business.
2. Results
|
|
| 2Q23 |
|
|
|
| 1H23 | ||||||
vs | In millions of dollars, except tax on net operating | vs | ||||||||||||
2Q23 | 1Q23 | 2Q22 | 2Q22 | income | 1H23 | 1H22 | 1H22 | |||||||
27,712 |
| 22,359 |
| 26,907 |
| -3% | External sales |
| 44,071 |
| 50,056 |
| -12% | |
494 |
| 282 |
| 929 |
| -47% | Operating income |
| 776 |
| 1,624 |
| -52% | |
396 |
| 406 |
| 731 |
| -46% | Net operating income |
| 802 |
| 1,159 |
| -31% | |
64 |
| 243 |
| 98 |
| -35% | Net income (loss) from equity affiliates and other items |
| 307 |
| 56 |
| x5.4 | |
(162) |
| (119) |
| (296) |
| ns | Tax on net operating income |
| (281) |
| (521) |
| ns | |
53 |
| (126) |
| (265) |
| ns | Adjustments affecting net operating income |
| (73) |
| (421) |
| ns | |
449 |
| 280 |
| 466 |
| -4% | Adjusted net operating income* |
| 729 |
| 738 |
| -1% | |
232 |
| 92 |
| 273 |
| -15% | Organic investments |
| 324 |
| 368 |
| -12% | |
(4) |
| (234) |
| (57) |
| ns | Net acquisitions |
| (238) |
| (91) |
| ns | |
228 |
| (142) |
| 216 |
| +6% | Net investments |
| 86 |
| 277 |
| -69% |
| * | Detail of adjustment items shown in the business segment information starting on page 46 of this exhibit. |
Marketing & Services Net operating income was:
| ● | $396 million in the second quarter of 2023, down 2% quarter-on-quarter, |
| ● | $802 million in the first half 2023, down 31% compared to the first half 2022. |
13
Marketing & Services adjusted net operating income was:
| ● | $449 million in the second quarter of 2023, down 4% year-on-year, |
| ● | $729 million in the first half 2023, slightly down year-on-year, in line with lower sales. |
Adjusted net operating income for the Marketing & Services segment excludes any after-tax inventory valuation effect and special items. In the second quarter of 2023, the exclusion of the inventory valuation effect had a positive impact of $45 million on the segment’s adjusted net operating income, compared to a negative impact of $275 million in the second quarter of 2022. In the second quarter of 2023, the exclusion of special items had a positive impact of $8 million on the segment’s adjusted net operating income, compared to a positive impact of $10 million in the second quarter of 2022.
The segment’s cash flow from operating activities was:
| ● | $665 million in the second quarter of 2023, up 15% quarter-on-quarter, |
| ● | $(8) million in the first half 2023, compared to $1,478 million in the first half 2022. |
The segment’s operating cash flow before working capital changes without financial charges except those related to leases (DACF)5 was:
| ● | $756 million in the second quarter of 2023, up 29% year-on-year, |
| ● | $1,212 million in the first half 2023, up 16% compared to the first half 2022, as 2022 was negatively impacted by the tax effect of higher prices on the valuation of petroleum product inventories. |
5 The definition of Operating cash flow before working capital changes and Debt adjusted cash flow (DACF) are available on the “Glossary” on page 31 et seq. of this exhibit. The reconciliation of Cash flow from operating activities to Debt adjusted cash flow (DACF) is set forth under “Cash flow by Segment” on page 28 et seq. of this exhibit. For information on the replacement cost method, refer to “B. Analysis of Business Segment Results”, above.
14
C.TOTALENERGIES RESULTS
1. Net income (TotalEnergies share)
Net income (TotalEnergies share) was $4,088 million in the second quarter of 2023, 28% lower than $5,692 million in second quarter of 2022. Adjusted net income6 (TotalEnergies share) was $4,956 million in the second quarter of 2023 versus $9,796 million in the second quarter of 2022, due to lower gas prices and refining margins.
Adjusted net income excludes the after-tax inventory effect, special items and the impact of changes in fair value7. Adjustments to net income8 were $(868) million in the second quarter of 2023, consisting mainly of:
| ● | $(0.5) billion related to impairments, notably on upstream assets in Kenya and the Yunlin offshore wind project in Taiwan, |
| ● | $(0.4) billion of inventory effect. |
2. Fully-diluted shares and share buybacks
As of June 30, 2023, the number of diluted shares was 2,443 million.
As part of its shareholder return policy, TotalEnergies repurchased:
| ● | 32.8 million shares for cancellation in the second quarter of 2023 for $2 billion, |
| ● | 65.0 million shares for cancellation in the first half 2023 for $4 billion. |
3. Acquisitions - asset sales
Acquisitions were:
| ● | $482 million in the second quarter of 2023, mainly related to the acquisition of a 9.375% stake in the NFS LNG project in Qatar, the renewal of the license OML 130 in Nigeria, and the acquisition of a 5.06% stake in NextDecade in line with the launch of RGLNG project in the US, |
| ● | $3,738 million in the first half 2023, mainly related to the above items, as well as the acquisition of a 20% interest in the SARB and Umm Lulu concession in the United Arab Emirates, the acquisition of a 6.25% stake in the NFE LNG project in Qatar, and a 34% stake in a joint venture with Casa dos Ventos in Brazil. |
Divestments were:
| ● | $162 million in the second quarter of 2023, notably for the sale of shares in Maxeon, |
| ● | $431 million in the first half 2023, notably for the above item as well as the sale of 50% of the Marketing & Services subsidiary in Egypt. |
4. Cash flow
In the second quarter of 2023, cash flow from operating activities was $9,900 million compared to $8,485 million of operating cash flow before working capital changes9 in the second quarter of 2023, reflecting a $1.5 billion decrease in working capital requirements, mainly due to the effects of lower inventories, seasonality of payment of the gas and power marketing business, and despite a decrease in tax payables and the tax payment schedule notably in the Exploration & Production segment.
TotalEnergies’ cash flow from operating activities was $9,900 million in the second quarter of 2023, a decrease of 39% compared to $16,284 million in the second quarter of 2022.
6 Adjusted net income is a non-GAAP measure that the Company presents in order to evaluate the Company’s operating results and understanding its operating trends. The definition of Adjusted net operating income is available in the “Glossary” on page 31 of this exhibit.
7 Details shown on page 22 of this exhibit.
8 Details shown on pages 22 and 38 et seq. of this exhibit.
9 Operating cash flow before working capital changes is a non-GAAP measure. The definition of Operating cash flow before working capital changes is available in the “Glossary” on page 31 of this exhibit. The reconciliation of Cash flow from operating activities to Operating cash flow before working capital changes is set forth under “Cash flow” on page 27 of this exhibit. For information on the replacement cost method, refer to “B. Analysis of Business Segment Results”.
15
The change in working capital as determined using the replacement cost method excluding the mark-to-market effect of Integrated LNG and Integrated Power’s contracts, including capital gain from renewable project sales and including organic loan repayment from equity affiliates was a decrease of $1,415 million in the second quarter of 2023, compared to a decrease of $3,051 million in the second quarter of 2022.
In the second quarter of 2023, the change in working capital was a decrease of $2,125 million in accordance with IFRS. The difference of $710 million between IFRS and replacement cost method corresponds to the following adjustments: (i) the pre-tax inventory valuation effect of $252 million, (ii) plus the mark-to-market effect of Integrated LNG and Integrated Power’s contracts of $405 million, (iii) plus the capital gains from renewables project sale of $35 million and (iv) plus the organic loan repayments from equity affiliates of $18 million.
Operating cash flow before working capital changes10 was $8,485 million in the second quarter of 2023, down 36% compared to $13,233 million in the second quarter of 2022.
Operating cash flow before working capital changes without financial charges except those related to leases (DACF)11 was $8,596 million in the second quarter of 2023, down 37% compared to $13,631 million in the second quarter of 2022.
TotalEnergies’ net cash flow12 was:
| ● | $3,894 million in the second quarter of 2023 compared to $3,201 million in the first quarter 2023, reflecting the $1,136 million decrease in cash flow offset by the $1,829 million decrease in net investments to $4,591 million in the second quarter of 2023, |
| ● | $7,095 million in the first half 2023 compared to $17,061 million a year earlier, reflecting the $6,753 million decrease in cash flow and the $3,213 million increase in net investments to $11,011 million in the first half 2023. |
D.PROFITABILITY
Return on equity was 25.2% for the twelve months ended June 30, 2023.
| July 1, 2022 |
| April 1, 2022 |
| July 1, 2021 | |
In millions of dollars | June 30, 2023 | March 31, 2023 | June 30, 2022 | |||
Adjusted net income |
| 29,351 |
| 34,219 |
| 30,716 |
Average adjusted shareholders’ equity |
| 116,329 |
| 115,233 |
| 113,333 |
Return on equity (ROE) |
| 25.2% | 29.7% | 27.1% |
Return on average capital employed (ROACE)13 was 22.4% for the twelve months ended June 30, 2023.
| July 1, 2022 |
| April 1, 2022 |
| July 1, 2021 | |
In millions of dollars | June 30, 2023 | March 31, 2023 | June 30, 2022 | |||
Adjusted net operating income |
| 30,776 |
| 35,712 |
| 32,177 |
Average capital employed |
| 137,204 |
| 140,842 |
| 139,377 |
ROACE |
| 22.4% | 25.4% | 23.1% |
10 Operating cash flow before working capital changes is a non-GAAP measure. The definition of Operating cash flow before working capital changes is available in the “Glossary” on page 31 of this exhibit. The reconciliation of Cash flow from operating activities to Operating cash flow before working capital changes is set forth under “Cash flow” on page 27 of this exhibit. For information on the replacement cost method, refer to “B. Analysis of Business Segment Results”.
11 Debt adjusted cash flow (DACF) is a non-GAAP measure. The definition of Debt adjusted cash flow (DACF) is available in the “Glossary” on page 31 of this exhibit. The reconciliation of Cash flow from operating activities to Debt adjusted cash flow (DACF) is set forth under “Cash flow” on page 27 of this exhibit. For information on the replacement cost method, refer to “B. Analysis of Business Segment Results”.
12 Net cash flow is a non-GAAP measure. The definition of Net cash flow is available in the “Glossary” on page 31 of this exhibit. The reconciliation of Cash flow from operating activities to Net cash flow is set forth under “Cash flow” on page 27 of this exhibit.
13 Return on Average Capital Employed (ROACE) is a non-GAAP measure. The definition of Return on Average Capital Employed (ROACE) is available in the “Glossary” on page 31 of this exhibit.
16
E.Annual 2023 Sensitivities*
|
|
| Estimated | |||
Estimated impact | impact on cash | |||||
on adjusted net | flow from | |||||
Change | operating income | operations | ||||
Dollar |
| +/- 0.1 $ per € |
| -/+ 0.1 B$ |
| ~0 B$ |
Average liquids price** |
| +/- 10$/b |
| +/- 2.5 B$ |
| +/- 3.0 B$ |
European gas price – NBP / TTF |
| +/- 2 $/Mbtu |
| +/- 0.4 B$ |
| +/- 0.4 B$ |
Variable cost margin, European refining (VCM) |
| +/- 10 $/t |
| +/- 0.4 B$ | +/- 0.5 B$ |
| * | Sensitivities are revised once per year upon publication of the previous year’s fourth quarter results. Sensitivities are estimates based on assumptions about TotalEnergies’ portfolio in 2023. Actual results could vary significantly from estimates based on the application of these sensitivities. The impact of the $-€ sensitivity on adjusted net operating income is essentially attributable to Refining & Chemicals. |
** | In a 80 $/b Brent environment. |
F.SUMMARY AND OUTLOOK
Oil prices have remained buoyant at around $75/b for several months now, supported by OPEC+ actions. Demand for petroleum products should be supported as the summer driving season is ongoing and the global recovery for air travel continues.
European natural gas prices are currently around $10/Mbtu due to high inventories in Europe. Demand recovery in Asia and tension on supply capacities in Europe support forward prices above $15/Mbtu for the winter of 2023/2024.
Given the evolution of oil and gas prices in recent months and the lag effect on price formulas, TotalEnergies anticipates that its average LNG selling price should be between $9 and $10/Mbtu in the third quarter 2023.
For the third quarter 2023, TotalEnergies anticipates hydrocarbon production of around 2.5 Mboe/d, notably supported by the start-up of Absheron field in Azerbaijan. The utilization rate in refineries should remain above 80%.
The Company confirms 2023 guidance of net investments between $16 and $18 billion, including $5 billion in low-carbon energies.
17
FORWARD-LOOKING STATEMENTS
This document may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, notably with respect to the financial condition, results of operations, business activities and industrial strategy of TotalEnergies. This document may also contain statements regarding the perspectives, objectives, areas of improvement and goals of TotalEnergies, including with respect to climate change and carbon neutrality (net zero emissions). An ambition expresses an outcome desired by TotalEnergies, it being specified that the means to be deployed do not depend solely on TotalEnergies. These forward-looking statements may generally be identified by the use of the future or conditional tense or forward-looking words such as “envisions”, “intends”, “anticipates”, “believes”, “considers”, “plans”, “expects”, “thinks”, “targets”, “aims” or similar terminology. Such forward-looking statements included in this document are based on economic data, estimates and assumptions prepared in a given economic, competitive and regulatory environment and considered to be reasonable by TotalEnergies as of the date of this document.
These forward-looking statements are not historical data and should not be interpreted as assurances that the perspectives, objectives or goals announced will be achieved. They may prove to be inaccurate in the future, and may evolve or be modified with a significant difference between the actual results and those initially estimated, due to the uncertainties notably related to the economic, financial, competitive and regulatory environment, or due to the occurrence of risk factors, such as, notably, the price fluctuations in crude oil and natural gas, the evolution of the demand and price of petroleum products, the changes in production results and reserves estimates, the ability to achieve cost reductions and operating efficiencies without unduly disrupting business operations, changes in laws and regulations including those related to the environment and climate, currency fluctuations, as well as economic and political developments, changes in market conditions, loss of market share and changes in consumer preferences, or pandemics such as the COVID-19 pandemic. Additionally, certain financial information is based on estimates particularly in the assessment of the recoverable value of assets and potential impairments of assets relating thereto.
Except for its ongoing obligations to disclose material information as required by applicable securities laws, TotalEnergies does not have any intention or obligation to update forward-looking statements after the distribution of this document, even if new information, future events or other circumstances have made them incorrect or misleading.
For additional factors, you should read the information set forth under “Item 3. -3.1 Risk Factors”, “Item 4. Information on the Company”, “Item 5. Operating and Financial Review and Prospects” and “Item 11. Quantitative and Qualitative Disclosures about Market Risk” in TotalEnergies’ Form 20-F for the year ended December 31, 2022.
18
OPERATING INFORMATION BY SEGMENT
Company’s production (Exploration & Production + Integrated LNG)
2Q23 | 1H23 | |||||||||||||
vs | Combined liquids and gas | vs | ||||||||||||
2Q23 |
| 1Q23 |
| 2Q22 | 2Q22 |
| production by region (kboe/d) |
| 1H23 |
| 1H22 |
| 1H22 | |
537 |
| 583 |
| 907 | -41% | Europe |
| 559 |
| 933 |
| -40% | ||
481 |
| 494 |
| 460 | +5% | Africa |
| 488 |
| 479 |
| +2% | ||
767 |
| 718 |
| 680 | +13% | Middle East and North Africa |
| 743 |
| 675 |
| +10% | ||
443 |
| 441 |
| 420 | +5% | Americas |
| 442 |
| 403 |
| +10% | ||
243 |
| 288 |
| 271 | -10% | Asia-Pacific |
| 266 |
| 301 |
| -12% | ||
2,471 |
| 2,524 |
| 2,738 | -10% | Total production |
| 2,498 |
| 2,791 |
| -10% | ||
338 |
| 344 |
| 690 | -51% | includes equity affiliates |
| 341 |
| 702 |
| -51% |
2Q23 | 1H23 | |||||||||||||
vs | vs | |||||||||||||
2Q23 |
| 1Q23 |
| 2Q22 | 2Q22 |
| Liquids production by region (kb/d) |
| 1H23 |
| 1H22 |
| 1H22 | |
227 |
| 235 |
| 267 | -15% | Europe |
| 231 |
| 283 |
| -18% | ||
359 |
| 371 |
| 351 | +2% | Africa |
| 365 |
| 362 |
| +1% | ||
615 |
| 578 |
| 546 | +13% | Middle East and North Africa |
| 596 |
| 542 |
| +10% | ||
268 |
| 263 |
| 231 | +16% | Americas |
| 266 |
| 216 |
| +23% | ||
102 |
| 116 |
| 88 | +16% | Asia-Pacific |
| 109 |
| 102 |
| +6% | ||
1,571 |
| 1,562 |
| 1,483 | +6% | Total production |
| 1,567 |
| 1,505 |
| +4% | ||
153 |
| 150 |
| 201 | -24% | includes equity affiliates |
| 152 |
| 206 |
| -26% |
2Q23 | 1H23 | |||||||||||||
vs | vs | |||||||||||||
2Q23 |
| 1Q23 |
| 2Q22 | 2Q22 |
| Gas production by region (Mcf/d) |
| 1H23 |
| 1H22 |
| 1H22 | |
1,671 |
| 1,879 |
| 3,440 | -51% | Europe |
| 1,774 |
| 3,498 |
| -49% | ||
610 |
| 615 |
| 545 | +12% | Africa |
| 612 |
| 594 |
| +3% | ||
834 |
| 772 |
| 742 | +12% | Middle East and North Africa |
| 803 |
| 734 |
| +9% | ||
976 |
| 994 |
| 1,063 | -8% | Americas |
| 985 |
| 1,052 |
| -6% | ||
754 |
| 931 |
| 1,045 | -28% | Asia-Pacific |
| 843 |
| 1,119 |
| -25% | ||
4,845 |
| 5,191 |
| 6,835 | -29% | Total production |
| 5,017 |
| 6,997 |
| -28% | ||
1,004 |
| 1,054 |
| 2,633 | -62% | includes equity affiliates |
| 1,029 |
| 2,673 |
| -62% |
19
Downstream (Refining & Chemicals and Marketing & Services)
2Q23 | 1H23 | |||||||||||||
vs | vs | |||||||||||||
2Q23 |
| 1Q23 |
| 2Q22 | 2Q22 |
| Petroleum product sales by region (kb/d) |
| 1H23 |
| 1H22 |
| 1H22 | |
1,709 |
| 1,600 |
| 1,814 | -6% | Europe* |
| 1,655 |
| 1,724 |
| -4% | ||
599 |
| 667 |
| 734 | -18% | Africa |
| 633 |
| 747 |
| -15% | ||
918 |
| 849 |
| 922 | – | Americas |
| 883 |
| 849 |
| +4% | ||
665 |
| 623 |
| 705 | -6% | Rest of world |
| 644 |
| 618 |
| +4% | ||
3,892 |
| 3,739 |
| 4,176 | -7% | Total consolidated sales* |
| 3,815 |
| 3,939 |
| -3% | ||
424 |
| 387 |
| 409 | +4% | Includes bulk sales |
| 405 |
| 409 |
| -1% | ||
2,070 |
| 1,992 |
| 2,290 | -10% | Includes trading* |
| 2,031 |
| 2,065 |
| -2% |
* | 1Q23 data restated |
2Q23 | 1H23 | |||||||||||||
vs | vs | |||||||||||||
2Q23 |
| 1Q23 |
| 2Q22 | 2Q22 |
| Petrochemicals production* (kt) |
| 1H23 |
| 1H22 |
| 1H22 | |
1,026 |
| 1,047 |
| 1,023 | – | Europe |
| 2,073 |
| 2,282 |
| -9% | ||
619 |
| 607 |
| 603 | +3% | Americas |
| 1,226 |
| 1,240 |
| -1% | ||
475 |
| 753 |
| 768 | -38% |
| Middle East and Asia |
| 1,228 |
| 1,549 |
| -21% |
* | Olefins, polymers. |
20
INTEGRATED POWER
| 2Q23 |
| 1Q23 | |||||||||||||||||
|
| Onshore |
| Offshore |
|
|
|
| Onshore |
| Offshore |
|
| |||||||
Installed power generation gross capacity (GW) (1),(2) | Solar |
| Wind |
| Wind | Other | Total | Solar |
| Wind |
| Wind | Other | Total | ||||||
France |
| 0.8 |
| 0.6 |
| 0.0 |
| 0.1 |
| 1.6 |
| 0.8 |
| 0.6 |
| 0.0 |
| 0.2 |
| 1.5 |
Rest of Europe |
| 0.2 |
| 1.1 |
| 0.8 |
| 0.0 |
| 2.1 |
| 0.2 |
| 1.1 |
| 0.5 |
| 0.0 |
| 1.8 |
Africa |
| 0.1 |
| 0.0 |
| 0.0 |
| 0.0 |
| 0.2 |
| 0.1 |
| 0.0 |
| 0.0 |
| 0.0 |
| 0.2 |
Middle East |
| 1.2 |
| 0.0 |
| 0.0 |
| 0.0 |
| 1.2 |
| 1.2 |
| 0.0 |
| 0.0 |
| 0.0 |
| 1.2 |
North America |
| 3.5 |
| 2.1 |
| 0.0 |
| 0.1 |
| 5.6 |
| 3.0 |
| 2.1 |
| 0.0 |
| 0.1 |
| 5.1 |
South America |
| 0.4 |
| 1.0 |
| 0.0 |
| 0.0 |
| 1.4 |
| 0.4 |
| 0.9 |
| 0.0 |
| 0.0 |
| 1.3 |
India |
| 5.1 |
| 0.4 |
| 0.0 |
| 0.0 |
| 5.5 |
| 5.0 |
| 0.4 |
| 0.0 |
| 0.0 |
| 5.4 |
Asia-Pacific |
| 1.4 |
| 0.0 |
| 0.1 |
| 0.0 |
| 1.5 |
| 1.3 |
| 0.0 |
| 0.1 |
| 0.0 |
| 1.5 |
Total |
| 12.5 |
| 5.2 |
| 1.0 |
| 0.3 |
| 19.0 |
| 12.0 |
| 5.0 |
| 0.7 |
| 0.3 |
| 17.9 |
| 2Q23 |
| 1Q23 | |||||||||||||||||
|
| Onshore |
| Offshore |
|
|
|
| Onshore |
| Offshore |
|
| |||||||
Power generation gross capacity from renewables in construction (GW) (1),(2) | Solar | Wind |
| Wind | Other | Total | Solar |
| Wind |
| Wind | Other | Total | |||||||
France |
| 0.2 | 0.1 |
| 0.0 |
| 0.0 |
| 0.3 |
| 0.2 |
| 0.1 |
| 0.0 |
| 0.0 |
| 0.4 | |
Rest of Europe |
| 0.1 | 0.0 |
| 0.3 |
| 0.0 |
| 0.5 |
| 0.1 |
| 0.0 |
| 0.6 |
| 0.0 |
| 0.7 | |
Africa |
| 0.0 | 0.0 |
| 0.0 |
| 0.0 |
| 0.0 |
| 0.0 |
| 0.0 |
| 0.0 |
| 0.0 |
| 0.0 | |
Middle East |
| 0.1 | 0.0 |
| 0.0 |
| 0.0 |
| 0.1 |
| 0.0 |
| 0.0 |
| 0.0 |
| 0.0 |
| 0.0 | |
North America |
| 2.8 | 0.1 |
| 0.0 |
| 0.5 |
| 3.4 |
| 2.7 |
| 0.1 |
| 0.0 |
| 0.5 |
| 3.4 | |
South America |
| 0.1 | 0.2 |
| 0.0 |
| 0.0 |
| 0.3 |
| 0.1 |
| 0.6 |
| 0.0 |
| 0.0 |
| 0.7 | |
India |
| 0.4 | 0.1 |
| 0.0 |
| 0.0 |
| 0.5 |
| 0.4 |
| 0.1 |
| 0.0 |
| 0.0 |
| 0.5 | |
Asia-Pacific |
| 0.0 | 0.0 |
| 0.5 |
| 0.0 |
| 0.6 |
| 0.0 |
| 0.0 |
| 0.5 |
| 0.0 |
| 0.6 | |
Total |
| 3.8 | 0.5 |
| 0.9 |
| 0.6 |
| 5.7 |
| 3.6 |
| 0.9 |
| 1.2 |
| 0.5 |
| 6.2 | |
2Q23 | 1Q23 | |||||||||||||||||||
|
| Onshore |
| Offshore |
|
|
|
| Onshore |
| Offshore |
|
| |||||||
Power generation gross capacity from renewables in development (GW) (1),(2) | Solar | Wind | Wind | Other | Total | Solar | Wind | Wind | Other | Total | ||||||||||
France | 1.0 | 0.6 | 0.0 | 0.0 | 1.6 | 0.9 | 0.2 | 0.0 | 0.0 | 1.2 | ||||||||||
Rest of Europe |
| 5.4 |
| 0.4 |
| 4.4 |
| 0.1 |
| 10.3 |
| 3.6 |
| 0.4 |
| 4.4 |
| 0.1 |
| 8.4 |
Africa |
| 0.6 |
| 0.3 |
| 0.0 |
| 0.1 |
| 1.0 |
| 0.7 |
| 0.3 |
| 0.0 |
| 0.1 |
| 1.1 |
Middle East |
| 0.4 |
| 0.0 |
| 0.0 |
| 0.0 |
| 0.4 |
| 0.5 |
| 0.0 |
| 0.0 |
| 0.0 |
| 0.5 |
North America |
| 9.0 |
| 3.2 |
| 4.1 |
| 5.1 |
| 21.3 |
| 10.7 |
| 2.8 |
| 4.1 |
| 4.5 |
| 22.1 |
South America |
| 1.6 |
| 1.6 |
| 0.0 |
| 0.4 |
| 3.6 |
| 1.3 |
| 0.5 |
| 0.0 |
| 0.0 |
| 1.8 |
India |
| 4.2 |
| 0.1 |
| 0.0 |
| 0.0 |
| 4.3 |
| 4.6 |
| 0.2 |
| 0.0 |
| 0.0 |
| 4.8 |
Asia-Pacific |
| 3.2 |
| 0.4 |
| 2.9 |
| 0.9 |
| 7.5 |
| 2.4 |
| 0.4 |
| 2.9 |
| 0.7 |
| 6.4 |
Total |
| 25.5 |
| 6.6 |
| 11.4 |
| 6.5 |
| 50.0 |
| 24.7 |
| 4.8 |
| 11.4 |
| 5.4 |
| 46.3 |
(1) | Includes 20% of the gross capacities of Adani Green Energy Limited, 50% of Clearway Energy Group and, from 1Q23, 49% of Casa dos Ventos. |
(2) | End-of-period data. |
21
ADJUSTMENT ITEMS TO NET INCOME (TOTALENERGIES SHARE)
2Q23 |
| 1Q23 |
| 2Q22 | In millions of dollars |
| 1H23 |
| 1H22 | |
(377) |
| (159) |
| (4,546) | Special items affecting net income (TotalEnergies share) |
| (536) |
| (9,539) | |
– |
| 203 |
| – | Gain (loss) on asset sales |
| 203 |
| – | |
(5) |
| – |
| (8) | Restructuring charges |
| (5) |
| (11) | |
(469) |
| (60) |
| (3,719) | Impairments |
| (529) |
| (8,780) | |
97 |
| (302) |
| (819) | Other |
| (205) |
| (748) | |
(380) |
| (391) |
| 993 | After-tax inventory effect: FIFO vs. replacement cost |
| (771) |
| 2,033 | |
(111) |
| (434) |
| (551) | Effect of changes in fair value |
| (545) |
| (631) | |
(868) |
| (984) |
| (4,104) | Total adjustments affecting net income |
| (1,852) |
| (8,137) |
RECONCILIATION OF NET INCOME (TOTALENERGIES SHARE) TO ADJUSTED EBITDA
|
|
| 2Q23 vs |
|
|
|
| 1H23 vs | ||||||
2Q23 | 1Q23 | 2Q22 | 2Q22 | In millions of dollars | 1H23 | 1H22 | 1H22 | |||||||
4,088 |
| 5,557 |
| 5,692 |
| -28% | Net income - TotalEnergies share |
| 9,645 |
| 10,636 |
| -9% | |
868 |
| 984 |
| 4,104 |
| -79% | Less: adjustment items to net income (TotalEnergies share) |
| 1,852 |
| 8,137 |
| -77% | |
4,956 |
| 6,541 |
| 9,796 |
| -49% | Adjusted net income - TotalEnergies share |
| 11,497 |
| 18,773 |
| -39% | |
|
|
|
| Adjusted items | ||||||||||
61 |
| 74 |
| 89 |
| -31% | Add: non-controlling interests |
| 135 |
| 165 |
| -18% | |
2,715 |
| 4,090 |
| 5,274 |
| -49% | Add: income taxes |
| 6,805 |
| 9,998 |
| -32% | |
2,959 |
| 3,026 |
| 3,038 |
| -3% | Add: depreciation, depletion and impairment of tangible assets and mineral interests |
| 5,985 |
| 6,186 |
| -3% | |
92 |
| 99 |
| 98 |
| -6% | Add: amortization and impairment of intangible assets |
| 191 |
| 194 |
| -2% | |
724 |
| 710 |
| 572 |
| +27% | Add: financial interest on debt |
| 1,434 |
| 1,034 |
| +39% | |
(402) |
| (373) |
| (130) |
| ns | Less: financial income and expense from cash & cash equivalents |
| (775) |
| (189) |
| ns | |
11,105 |
| 14,167 |
| 18,737 |
| -41% | Adjusted EBITDA |
| 25,272 |
| 36,161 |
| -30% |
22
RECONCILIATION OF NET INCOME (TOTALENERGIES SHARE) TO ADJUSTED NET OPERATING INCOME AND ADJUSTED OPERATING INCOME
2nd quarter 2023 |
| statement |
|
|
|
|
(M$) | of income | Adjustments | Adjusted | |||
Sales |
| 56,271 |
| (76) |
| 56,195 |
Excise taxes |
| (4,737) |
| 0 |
| (4,737) |
Revenues from sales |
| 51,534 |
| (76) |
| 51,458 |
Purchases net of inventory variation |
| (33,864) |
| 485 |
| (33,379) |
Other operating expenses |
| (7,906) |
| 152 |
| (7,754) |
Exploration costs |
| (62) |
| 0 |
| (62) |
Depreciation, depletion and impairment of tangible assets and mineral interests |
| (3,106) |
| 147 |
| (2,959) |
Operating income |
| 6,596 |
| 708 |
| 7,304 |
Other income |
| 116 |
| 0 |
| 116 |
Other expense |
| (366) |
| 110 |
| (256) |
Other financial income |
| 413 |
| (12) |
| 401 |
Other financial expense |
| (173) |
| 0 |
| (173) |
Net income (loss) from equity affiliates |
| 267 |
| 395 |
| 662 |
Income taxes |
| (2,487) |
| (228) |
| (2,715) |
Less tax on cost of net debt |
| 31 |
| (36) |
| (5) |
Net operating income |
| 4,397 |
| 937 |
| 5,334 |
Financial interest on debt |
| (724) |
| 0 |
| (724) |
Financial income and expense from cash & cash equivalents |
| 510 |
| (108) |
| 402 |
Cost of net debt |
| (214) |
| (108) |
| (322) |
Tax on cost of net debt |
| (31) |
| 36 |
| 5 |
Net cost of net debt |
| (245) |
| (72) |
| (317) |
Consolidated net income |
| 4,152 |
| 865 |
| 5,017 |
TotalEnergies share |
| 4,088 |
| 868 |
| 4,956 |
Non-controlling interests |
| 64 |
| (3) |
| 61 |
1st quarter 2023 |
| statement |
|
|
|
|
(M$) | of income | Adjustments | Adjusted | |||
Sales |
| 62,603 |
| 76 |
| 62,679 |
Excise taxes |
| (4,370) |
| 0 |
| (4,370) |
Revenues from sales |
| 58,233 |
| 76 |
| 58,309 |
Purchases net of inventory variation |
| (38,351) |
| 872 |
| (37,479) |
Other operating expenses |
| (7,785) |
| 33 |
| (7,752) |
Exploration costs |
| (92) |
| (2) |
| (94) |
Depreciation, depletion and impairment of tangible assets and mineral interests |
| (3,062) |
| 36 |
| (3,026) |
Operating income |
| 8,943 |
| 1,015 |
| 9,958 |
Other income |
| 341 |
| (264) |
| 77 |
Other expense |
| (300) |
| 163 |
| (137) |
Other financial income |
| 258 |
| (10) |
| 248 |
Other financial expense |
| (183) |
| 0 |
| (183) |
Net income (loss) from equity affiliates |
| 960 |
| 119 |
| 1,079 |
Income taxes |
| (4,071) |
| (19) |
| (4,090) |
Less tax on cost of net debt |
| (24) |
| (12) |
| (36) |
Net operating income |
| 5,924 |
| 992 |
| 6,916 |
Financial interest on debt |
| (710) |
| 0 |
| (710) |
Financial income and expense from cash & cash equivalents |
| 393 |
| (20) |
| 373 |
Cost of net debt |
| (317) |
| (20) |
| (337) |
Tax on cost of net debt |
| 24 |
| 12 |
| 36 |
Net cost of net debt |
| (293) |
| (8) |
| (301) |
Consolidated net income |
| 5,631 |
| 984 |
| 6,615 |
TotalEnergies share |
| 5,557 |
| 984 |
| 6,541 |
Non-controlling interests |
| 74 |
| 0 |
| 74 |
23
RECONCILIATION OF NET INCOME (TOTALENERGIES SHARE) TO ADJUSTED NET OPERATING INCOME AND ADJUSTED OPERATING INCOME (CONT.)
2nd quarter 2022 | statement | |||||
(M$) |
| of income |
| Adjustments |
| Adjusted |
Sales |
| 74,774 |
| 15 |
| 74,789 |
Excise taxes |
| (4,329) |
| 0 |
| (4,329) |
Revenues from sales |
| 70,445 |
| 15 |
| 70,460 |
Purchases net of inventory variation |
| (45,443) |
| (580) |
| (46,023) |
Other operating expenses |
| (8,041) |
| 421 |
| (7,620) |
Exploration costs |
| (117) |
| 0 |
| (117) |
Depreciation, depletion and impairment of tangible assets and mineral interests |
| (3,102) |
| 64 |
| (3,038) |
Operating income |
| 13,742 |
| (80) |
| 13,662 |
Other income |
| 429 |
| 0 |
| 429 |
Other expense |
| (1,305) |
| 776 |
| (529) |
Other financial income |
| 231 |
| 0 |
| 231 |
Other financial expense |
| (136) |
| 0 |
| (136) |
Net income (loss) from equity affiliates |
| (1,546) |
| 3,490 |
| 1,944 |
Income taxes |
| (5,284) |
| 10 |
| (5,274) |
Less tax on cost of net debt |
| (22) |
| (35) |
| (57) |
Net operating income |
| 6,109 |
| 4,161 |
| 10,270 |
Financial interest on debt |
| (572) |
| 0 |
| (572) |
Financial income and expense from cash & cash equivalents |
| 245 |
| (115) |
| 130 |
Cost of net debt |
| (327) |
| (115) |
| (442) |
Tax on cost of net debt |
| 22 |
| 35 |
| 57 |
Net cost of net debt |
| (305) |
| (80) |
| (385) |
Consolidated net income |
| 5,804 |
| 4,081 |
| 9,885 |
TotalEnergies share |
| 5,692 |
| 4,104 |
| 9,796 |
Non-controlling interests |
| 112 |
| (23) |
| 89 |
24
RECONCILIATION OF NET INCOME (TOTALENERGIES SHARE) TO ADJUSTED NET OPERATING INCOME AND ADJUSTED OPERATING INCOME (CONT.)
1st half 2023 |
| statement |
|
|
| |
(M$) | of income | Adjustments | Adjusted | |||
Sales |
| 118,874 |
| 0 |
| 118,874 |
Excise taxes |
| (9,107) |
| 0 |
| (9,107) |
Revenues from sales |
| 109,767 |
| 0 |
| 109,767 |
Purchases net of inventory variation |
| (72,215) |
| 1,357 |
| (70,858) |
Other operating expenses |
| (15,691) |
| 185 |
| (15,506) |
Exploration costs |
| (154) |
| (2) |
| (156) |
Depreciation, depletion and impairment of tangible assets and mineral interests |
| (6,168) |
| 183 |
| (5,985) |
Operating income |
| 15,539 |
| 1,723 |
| 17,262 |
Other income |
| 457 |
| (264) |
| 193 |
Other expense |
| (666) |
| 273 |
| (393) |
Other financial income |
| 671 |
| (22) |
| 649 |
Other financial expense |
| (356) |
| 0 |
| (356) |
Net income (loss) from equity affiliates |
| 1,227 |
| 514 |
| 1,741 |
Income taxes |
| (6,558) |
| (247) |
| (6,805) |
Less tax on cost of net debt |
| 7 |
| (48) |
| (41) |
Net operating income |
| 10,321 |
| 1,929 |
| 12,250 |
Financial interest on debt |
| (1,434) |
| 0 |
| (1,434) |
Financial income and expense from cash & cash equivalents |
| 903 |
| (128) |
| 775 |
Cost of net debt |
| (531) |
| (128) |
| (659) |
Tax on cost of net debt |
| (7) |
| 48 |
| 41 |
Net cost of net debt |
| (538) |
| (80) |
| (618) |
Consolidated net income |
| 9,783 |
| 1,849 |
| 11,632 |
TotalEnergies share |
| 9,645 |
| 1,852 |
| 11,497 |
Non-controlling interests |
| 138 |
| (3) |
| 135 |
1st half 2022 |
| statement |
|
|
|
|
(M$) | of income | Adjustments | Adjusted | |||
Sales |
| 143,380 |
| 3 |
| 143,383 |
Excise taxes |
| (8,985) |
| 0 |
| (8,985) |
Revenues from sales |
| 134,395 |
| 3 |
| 134,398 |
Purchases net of inventory variation |
| (85,091) |
| (1,694) |
| (86,785) |
Other operating expenses |
| (15,664) |
| 635 |
| (15,029) |
Exploration costs |
| (978) |
| 725 |
| (253) |
Depreciation, depletion and impairment of tangible assets and mineral interests |
| (6,781) |
| 595 |
| (6,186) |
Operating income |
| 25,881 |
| 264 |
| 26,145 |
Other income |
| 572 |
| (22) |
| 550 |
Other expense |
| (3,595) |
| 2,797 |
| (798) |
Other financial income |
| 434 |
| (84) |
| 350 |
Other financial expense |
| (271) |
| 0 |
| (271) |
Net income (loss) from equity affiliates |
| (1,503) |
| 5,308 |
| 3,805 |
Income taxes |
| (10,088) |
| 90 |
| (9,998) |
Less tax on cost of net debt |
| (20) |
| (77) |
| (97) |
Net operating income |
| 11,410 |
| 8,276 |
| 19,686 |
Financial interest on debt |
| (1,034) |
| 0 |
| (1,034) |
Financial income and expense from cash & cash equivalents |
| 459 |
| (270) |
| 189 |
Cost of net debt |
| (575) |
| (270) |
| (845) |
Tax on cost of net debt |
| 20 |
| 77 |
| 97 |
Net cost of net debt |
| (555) |
| (193) |
| (748) |
Consolidated net income |
| 10,855 |
| 8,083 |
| 18,938 |
TotalEnergies share |
| 10,636 |
| 8,137 |
| 18,773 |
Non-controlling interests |
| 219 |
| (54) |
| 165 |
25
RECONCILIATION OF REVENUES FROM SALES TO ADJUSTED EBITDA AND NET INCOME (TOTALENERGIES SHARE)
2Q23 | 1H23 | |||||||||||||
vs | vs | |||||||||||||
2Q23 |
| 1Q23 |
| 2Q22 |
| 2Q22 |
| In millions of dollars |
| 1H23 |
| 1H22 | 1H22 | |
Adjusted items | ||||||||||||||
51,458 |
| 58,309 |
| 70,460 |
| -27% |
| Revenues from sales |
| 109,767 |
| 134,398 | -18% | |
(33,379) |
| (37,479) |
| (46,023) |
| ns |
| Purchases, net of inventory variation |
| (70,858) |
| (86,785) | ns | |
(7,754) |
| (7,752) |
| (7,620) |
| ns |
| Other operating expenses |
| (15,506) |
| (15,029) | ns | |
(62) |
| (94) |
| (117) |
| ns |
| Exploration costs |
| (156) |
| (253) | ns | |
116 |
| 77 |
| 429 |
| -73% |
| Other income |
| 193 |
| 550 | -65% | |
(164) |
| (38) |
| (431) |
| ns |
| Other expense, excluding amortization and impairment of intangible assets |
| (202) |
| (604) | ns | |
401 |
| 248 |
| 231 |
| +74% |
| Other financial income |
| 649 |
| 350 | +85% | |
(173) |
| (183) |
| (136) |
| ns |
| Other financial expense |
| (356) |
| (271) | ns | |
662 |
| 1,079 |
| 1,944 |
| -66% |
| Net income (loss) from equity affiliates |
| 1,741 |
| 3,805 | -54% | |
11,105 |
| 14,167 |
| 18,737 |
| -41% |
| Adjusted EBITDA |
| 25,272 |
| 36,161 | -30% | |
| Adjusted items | |||||||||||||
(2,959) |
| (3,026) |
| (3,038) |
| ns |
| Less: depreciation, depletion and impairment of tangible assets and mineral interests |
| (5,985) |
| (6,186) | ns | |
(92) |
| (99) |
| (98) |
| ns |
| Less: amortization of intangible assets |
| (191) |
| (194) | ns | |
(724) |
| (710) |
| (572) |
| ns |
| Less: financial interest on debt |
| (1,434) |
| (1,034) | ns | |
402 |
| 373 |
| 130 |
| x3.1 |
| Add: financial income and expense from cash & cash equivalents |
| 775 |
| 189 | x4.1 | |
(2,715) | (4,090) | (5,274) | ns | Less: income taxes | (6,805) | (9,998) | ns | |||||||
(61) | (74) | (89) | ns | Less: non-controlling interests | (135) | (165) | ns | |||||||
(868) |
| (984) |
| (4,104) |
| ns |
| Add: adjustment - TotalEnergies share |
| (1,852) |
| (8,137) | ns | |
4,088 |
| 5,557 |
| 5,692 |
| -28% |
| Net income - TotalEnergies share |
| 9,645 |
| 10,636 | -9% |
26
INVESTMENTS – DIVESTMENTS
2Q23 | 1H23 | |||||||||||||
vs | vs | |||||||||||||
2Q23 |
| 1Q23 |
| 2Q22 | 2Q22 |
| In millions of dollars |
| 1H23 |
| 1H22 |
| 1H22 | |
4,271 |
| 3,433 |
| 2,819 | +51% | Organic investments (a) |
| 7,704 |
| 4,800 |
| +60% | ||
328 |
| 205 |
| 98 | x3.3 | Capitalized exploration |
| 533 |
| 212 |
| x2.5 | ||
366 |
| 374 |
| 277 | +32% | Increase in non-current loans |
| 740 |
| 511 |
| +45% | ||
(84) |
| (229) |
| (174) | ns | Repayment of non-current loans, excluding organic loan repayment from equity affiliates |
| (313) |
| (609) |
| ns | ||
– |
| – |
| (190) | -100% | Change in debt from renewable projects (TotalEnergies share) |
| – |
| (190) |
| -100% | ||
482 |
| 3,256 |
| 2,464 | -80% | Acquisitions (b) |
| 3,738 |
| 3,864 |
| -3% | ||
162 |
| 269 |
| 388 | -58% | Asset sales (c) |
| 431 |
| 866 |
| -50% | ||
(35) |
| (3) |
| 176 | ns | Change in debt from renewable projects (partner share) |
| (38) |
| 174 |
| ns | ||
320 |
| 2,987 |
| 2,076 | -85% | Net acquisitions |
| 3,307 |
| 2,998 |
| +10% | ||
4,591 |
| 6,420 |
| 4,895 | -6% | Net investments (a + b - c) |
| 11,011 |
| 7,798 |
| +41% | ||
– | – | – | ns | Other transactions with non-controlling interests (d) | – | – | ns | |||||||
(18) |
| 6 |
| (238) | ns | Organic loan repayment from equity affiliates (e) |
| (12) |
| (725) |
| ns | ||
(35) |
| (3) |
| 366 | ns | Change in debt from renewable projects financing* (f) |
| (38) |
| 364 |
| ns | ||
64 |
| 60 |
| 37 | +73% | Capex linked to capitalized leasing contracts (g) |
| 124 |
| 73 |
| +70% | ||
1 | 1 | 4 | -75% | Expenditures related to carbon credits ( h ) | 2 | 4 | -50% | |||||||
4,473 |
| 6,362 |
| 4,982 | -10% | Cash flow used in investing activities |
| 10,835 |
| 7,360 |
| +47% |
* | Change in debt from renewable projects (TotalEnergies share and partner share). |
CASH FLOW
|
|
| 2Q23 |
|
|
|
| 1H23 | ||||||
vs | vs | |||||||||||||
2Q23 | 1Q23 | 2Q22 | 2Q22 | In millions of dollars | 1H23 | 1H22 | 1H22 | |||||||
9,900 |
| 5,133 |
| 16,284 | -39% | Cash flow from operating activities |
| 15,033 |
| 23,901 |
| -37% | ||
1,720 |
| (3,989) |
| 2,161 | -20% | Less (Increase) decrease in working capital** |
| (2,269) |
| (2,614) |
| ns | ||
(252) |
| (502) |
| 1,151 | ns | Less Inventory effect |
| (754) |
| 2,406 |
| ns | ||
(35) |
| (3) |
| (23) | ns | Less Capital gain from renewable project sales |
| (38) |
| (25) |
| ns | ||
(18) |
| 6 |
| (238) | ns | Less Organic loan repayments from equity affiliates |
| (12) |
| (725) |
| ns | ||
8,485 |
| 9,621 |
| 13,233 | -36% | Operating cash flow before working capital changes ( a )* |
| 18,106 |
| 24,859 |
| -27% | ||
(112) |
| (153) |
| (399) | ns | Financial charges |
| (265) |
| (767) |
| ns | ||
8,596 |
| 9,774 |
| 13,631 | -37% | Operating cash flow before working capital changes w/o financial charges (DACF) |
| 18,371 |
| 25,626 |
| -28% | ||
4,271 |
| 3,433 |
| 2,819 | +51% | Organic investments (b) |
| 7,704 |
| 4,800 |
| +60% | ||
4,214 |
| 6,188 |
| 10,414 | -60% | Free cash flow after organic investments, w/o net asset sales (a - b) |
| 10,402 |
| 20,059 |
| -48% | ||
4,591 |
| 6,420 |
| 4,895 | -6% | Net investments (c) |
| 11,011 |
| 7,798 |
| +41% | ||
3,894 |
| 3,201 |
| 8,338 | -53% | Net cash flow (a - c) |
| 7,095 |
| 17,061 |
| -58% |
| * | Operating cash flow before working capital changes, is defined as cash flow from operating activities before changes in working capital at replacement cost, excluding the mark-to-market effect of Integrated LNG and Integrated Power sectors’ contracts and including capital gain from renewable projects sale. Historical data have been restated to cancel the impact of fair valuation of Integrated LNG and Integrated Power sectors’ contracts. |
** | Changes in working capital are presented excluding the mark-to-market effect of Integrated LNG and Integrated Power sectors’ contracts. |
27
CASH FLOW BY SEGMENT
Exploration & Production segment
In millions of dollars |
| 2Q23 |
| 1Q23 |
| 2Q22 |
| 1H23 |
| 1H22 |
Cash flow from operating activities |
| 4,047 |
| 4,536 |
| 8,768 |
| 8,583 |
| 14,536 |
Less (Increase) decrease in working capital |
| (317) |
| (371) |
| 1,384 |
| (688) |
| (127) |
Less Inventory effect |
| – |
| – |
| – |
| – |
| – |
Less Capital gain from renewable project sales |
| – |
| – |
| – |
| – |
| – |
Less Organic loan repayments from equity affiliates |
| – |
| – |
| 1 |
| – |
| (23) |
= Operating cash flow before working capital changes w/o financial charges except those related to leases (DACF) |
| 4,364 |
| 4,907 |
| 7,383 |
| 9,271 |
| 14,686 |
Integrated LNG segment
In millions of dollars |
| 2Q23 |
| 1Q23 |
| 2Q22 |
| 1H23 |
| 1H22 |
Cash flow from operating activities |
| 1,332 |
| 3,536 |
| 3,802 |
| 4,868 |
| 6,021 |
Less (Increase) decrease in working capital* |
| (469) |
| 1,456 |
| 1,926 |
| 987 |
| 2,120 |
Less Inventory effect |
| – |
| – |
| – |
| – |
| – |
Less Capital gain from renewable project sales |
| – |
| – |
| – |
| – |
| – |
Less Organic loan repayments from equity affiliates |
| – |
| (1) |
| (236) |
| (1) |
| (703) |
= Operating cash flow before working capital changes w/o financial charges except those related to leases (DACF) |
| 1,801 |
| 2,081 |
| 2,112 |
| 3,882 |
| 4,604 |
* Changes in working capital are presented excluding the mark-to-market effect of Integrated LNG and Integrated Power sectors’ contracts.
Integrated Power segment
In millions of dollars |
| 2Q23 |
| 1Q23 |
| 2Q22 |
| 1H23 |
| 1H22 |
Cash flow from operating activities |
| 2,284 |
| (1,285) |
| 168 |
| 999 |
| (1,736) |
Less (Increase) decrease in working capital* |
| 1,844 |
| (1,715) |
| (57) |
| 129 |
| (2,052) |
Less Inventory effect |
| – |
| – |
| – |
| – |
| – |
Less Capital gain from renewable project sales |
| (35) |
| (3) |
| (23) |
| (38) |
| (25) |
Less Organic loan repayments from equity affiliates |
| (16) |
| (7) |
| – |
| (23) |
| – |
= Operating cash flow before working capital changes w/o financial charges except those related to leases (DACF) |
| 491 |
| 440 |
| 248 |
| 931 |
| 341 |
* Changes in working capital are presented excluding the mark-to-market effect of Integrated LNG and Integrated Power sectors’ contracts.
Refining & Chemicals segment
In millions of dollars |
| 2Q23 |
| 1Q23 |
| 2Q22 |
| 1H23 |
| 1H22 |
Cash flow from operating activities |
| 1,923 |
| (851) |
| 3,526 |
| 1,072 |
| 4,633 |
Less (Increase) decrease in working capital |
| 788 |
| (2,183) |
| (209) |
| (1,395) |
| (1,486) |
Less Inventory effect |
| (192) |
| (415) |
| 775 |
| (607) |
| 1,722 |
Less Capital gain from renewable project sales |
| – |
| – |
| – |
| – |
| – |
Less Organic loan repayments from equity affiliates |
| (2) |
| 14 |
| (3) |
| 12 |
| 1 |
= Operating cash flow before working capital changes w/o financial charges except those related to leases (DACF) |
| 1,329 |
| 1,733 |
| 2,963 |
| 3,062 |
| 4,396 |
Marketing & Services segment
In millions of dollars |
| 2Q23 |
| 1Q23 |
| 2Q22 |
| 1H23 |
| 1H22 |
Cash flow from operating activities |
| 665 |
| (673) |
| 580 |
| (8) |
| 1,478 |
Less (Increase) decrease in working capital |
| (31) |
| (1,042) |
| (381) |
| (1,073) |
| (254) |
Less Inventory effect |
| (60) |
| (87) |
| 376 |
| (147) |
| 684 |
Less Capital gain from renewable project sales |
| – |
| – |
| – |
| – |
| – |
Less Organic loan repayments from equity affiliates |
| – |
| – |
| – |
| – |
| – |
= Operating cash flow before working capital changes w/o financial charges except those related to leases (DACF) |
| 756 |
| 456 |
| 585 |
| 1,212 |
| 1,048 |
28
GEARING14 RATIO
In millions of dollars |
| 06/30/2023 | 03/31/2023 | 06/30/2022 | ||
Current borrowings (1) |
| 13,980 | 16,280 | 14,589 | ||
Other current financial liabilities |
| 443 | 597 | 401 | ||
Current financial assets (1),(2) | (6,397) | (7,223) | (7,697) | |||
Net financial assets classified as held for sale (1) |
| (41) | (38) | (14) | ||
Non-current financial debt (1) |
| 33,387 | 34,820 | 39,233 | ||
Non-current financial assets (1) |
| (1,264) | (1,101) | (692) | ||
Cash and cash equivalents |
| (25,572) | (27,985) | (32,848) | ||
Net debt (a) |
| 14,536 | 15,350 | 12,972 | ||
Shareholders’ equity – TotalEnergies share |
| 113,682 | 115,581 | 116,688 | ||
Non-controlling interests |
| 2,770 | 2,863 | 3,309 | ||
Shareholders’ equity (b) |
| 116,452 | 118,444 | 119,997 | ||
Net-debt-to-capital ratio = a / (a+b) |
| 11.1% | 11.5% | 9.8% | ||
Leases (c) | 8,090 | 8,131 | 7,963 | |||
Net-debt-to-capital ratio including leases (a+c) / (a+b+c) |
| 16.3% | 16.5% | 14.9% |
(1) Excludes leases receivables and leases debts.
(2) Including initial margins held as part of the Company's activities on organized markets.
RETURN ON AVERAGE CAPITAL EMPLOYED (ROACE)15
Twelve months ended June 30, 2023
Exploration & | Integrated | Refining & | Marketing | |||||||||
In millions of dollars |
| Production |
| Integrated LNG |
| Power |
| Chemicals |
| & Services |
| Company |
Adjusted net operating income |
| 12,747 |
| 9,223 |
| 1,537 |
| 6,044 |
| 1,541 |
| 30,776 |
Capital employed at 06/30/2022* |
| 70,248 |
| 41,606 |
| 12,568 |
| 7,958 |
| 7,475 |
| 137,035 |
Capital employed at 06/30/2023* |
| 68,530 |
| 34,598 |
| 17,804 |
| 9,698 |
| 8,796 |
| 137,372 |
ROACE15 |
| 18.4% | 24.2% |
| 10.1% | 68.5% | 18.9% | 22.4% |
* At replacement cost (excluding after-tax inventory effect).
Twelve months ended March 31, 2023
Exploration & | Integrated | Refining & | Marketing | |||||||||
In millions of dollars |
| Production |
| Integrated LNG |
| Power |
| Chemicals |
| & Services |
| Company |
Adjusted net operating income |
| 15,117 |
| 10,108 |
| 1,427 |
| 7,800 |
| 1,558 |
| 35,712 |
Capital employed at 03/31/2022* |
| 71,518 |
| 44,803 |
| 9,937 |
| 8,847 |
| 7,751 |
| 141,853 |
Capital employed at 03/31/2023* |
| 67,658 |
| 34,183 |
| 18,982 |
| 10,115 |
| 8,811 |
| 139,830 |
ROACE15 |
| 21.7% | 25.6% |
| 9.9% | 82.3% | 18.8% | 25.4% |
* | At replacement cost (excluding after-tax inventory effect). |
14 Gearing is a non-GAAP measure. The definition of Gearing is available in the “Glossary” on page 31 of this exhibit.
15 Return on Average Capital Employed (ROACE) is a non-GAAP measure. The definition of Return on Average Capital Employed (ROACE) is available in the “Glossary” on page 31 of this exhibit.
29
RECONCILIATION OF ROACE
For the ended year Jun 30, 2023 |
| For the ended year Jun 30, 2023 |
(M$) |
| (M$) |
Adjusted net operating income 3rd quarter 2022 |
| 10,313 |
Adjusted net operating income 4th quarter 2022 |
| 8,213 |
Adjusted net operating income 1st quarter 2023 |
| 6,916 |
Adjusted net operating income 2nd quarter 2023 |
| 5,334 |
Adjusted net operating income |
| 30,776 |
Balance sheet as of Jun 30, 2022 |
|
|
Property, plant and equipment, intangible assets, net |
| 138,474 |
Investments & loans in equity affiliates |
| 28,210 |
Other non-current assets |
| 9,196 |
Working capital |
| 2,693 |
Provisions and other non-current liabilities |
| (37,883) |
Assets and liabilities classified as held for sale |
| 243 |
Capital Employed (Balance sheet) |
| 140,932 |
Less inventory valuation effect |
| (3,897) |
Capital Employed (Business segment information) |
| 137,035 |
Balance sheet as of Jun 30, 2023 |
|
|
Property, plant and equipment, intangible assets, net |
| 135,891 |
Investments & loans in equity affiliates |
| 30,425 |
Other non-current assets |
| 7,412 |
Working capital |
| (7,401) |
Provisions and other non-current liabilities |
| (34,404) |
Assets and liabilities classified as held for sale |
| 7,157 |
Capital Employed (Balance sheet) |
| 139,080 |
Less inventory valuation effect |
| (1,708) |
Capital Employed (Business segment information) |
| 137,372 |
ROACE as a percentage |
| 22.4% |
For the ended year March 31, 2023 |
| For the ended year March 31, 2023 |
(M$) |
| (M$) |
Adjusted net operating income 2nd quarter 2022 |
| 10,270 |
Adjusted net operating income 3rd quarter 2022 |
| 10,313 |
Adjusted net operating income 4th quarter 2022 |
| 8,213 |
Adjusted net operating income 1st quarter 2023 |
| 6,916 |
Adjusted net operating income |
| 35,712 |
Balance sheet as of March 31, 2022 |
|
|
Property, plant and equipment, intangible assets, net |
| 136,954 |
Investments & loans in equity affiliates |
| 29,334 |
Other non-current assets |
| 9,822 |
Working capital |
| 3,591 |
Provisions and other non-current liabilities |
| (35,540) |
Assets and liabilities classified as held for sale |
| 775 |
Capital Employed (Balance sheet) |
| 144,936 |
Less inventory valuation effect |
| (3,083) |
Capital Employed (Business segment information) |
| 141,853 |
Balance sheet as of March 31, 2023 |
| |
Property, plant and equipment, intangible assets, net |
| 140,733 |
Investments & loans in equity affiliates |
| 29,997 |
Other non-current assets |
| 8,690 |
Working capital |
| (3,547) |
Provisions and other non-current liabilities |
| (34,410) |
Assets and liabilities classified as held for sale |
| 463 |
Capital Employed (Balance sheet) |
| 141,926 |
Less inventory valuation effect |
| (2,096) |
Capital Employed (Business segment information) |
| 139,830 |
ROACE as a percentage |
| 25.4% |
30
GLOSSARY
Adjusted EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) is a non-GAAP financial measure and its most directly comparable IFRS measure is Net income. It refers to the adjusted earnings before depreciation, depletion and impairment of tangible and intangible assets and mineral interests, income tax expense and cost of net debt, i.e., all operating income and contribution of equity affiliates to net income. This indicator can be a valuable tool for decision makers, analysts and shareholders alike to measure and compare the Company’s profitability with utility companies.
Adjusted net income is a non-GAAP financial measure and its most directly comparable IFRS measure is Net income. Adjusted net income refers to net income less adjustment items to net income. Adjustment items are inventory valuation effect, effect of changes in fair value, and special items. This indicator can be a valuable tool for decision makers, analysts and shareholders alike to evaluate the Company’s operating results and to understand its operating trends by removing the impact of non-operational results and special items.
Adjusted net operating income is a non-GAAP financial measure and its most directly comparable IFRS measure is Net income. Adjusted net operating income refers to Net operating income less adjustment items. Net operating income refers to Net income before net cost of net debt, i.e., cost of net debt net of its tax effects. This indicator can be a valuable tool for decision makers, analysts and shareholders alike to evaluate the Company’s operating results and understanding its operating trends, by removing the impact of non-operational results and special items and is used to evaluate the return on capital employed (ROACE) as explained below.
Adjusted operating income is a non-GAAP financial measure and its most comparable IFRS measure is Operating income. Adjusted operating income refers to Operating income less adjustment items. Operating income refers to Net operating income before Net income (loss) from equity affiliates and other items and Tax on net operating income. This indicator can be a valuable tool for decision makers, analysts and shareholders alike to evaluate the Company’s operating results and understand its operating trends, by removing the impact of non-operational results and special items.
Debt adjusted cash flow (DACF) is a non-GAAP financial measure and its most directly comparable IFRS measure is Cash flow from operating activities. DACF is defined as operating cash flow before working capital changes and without financial charges. This indicator can be a valuable tool for decision makers, analysts and shareholders alike because it corresponds to the funds theoretically available to the Company for investments, debt repayment and distribution to shareholders, and therefore facilitates comparison of the Company’s results of operations with those of other registrants, independent of their capital structure and working capital requirements. By exception, DACF at segment level excludes financial charges except those related to leases. This sub-indicator can be a valuable tool for decision makers, analysts and shareholders alike because it corresponds to the funds theoretically generated by the segment once we have excluded financial charges, except those related to leases.
Free cash flow after organic investments, without net asset sales is a non-GAAP financial measure and its most directly comparable IFRS measure is Cash flow from operating activities. Free cash flow after organic investments, without net asset sales refers to Operating cash flow before working capital changes minus organic investments. Organic investments refer to net investments excluding acquisitions, asset sales and other transactions with non-controlling interests. This indicator can be a valuable tool for decision makers, analysts and shareholders alike because it illustrates operating cash flow generated by the business post allocation of cash for organic investments.
Gearing is a non-GAAP financial measure and its most directly comparable IFRS measure is the ratio of total financial liabilities to total equity. Gearing is a Net-debt-to-capital ratio, which is calculated as the ratio of Net debt excluding leases to Equity + Net debt excluding leases. This indicator can be a valuable tool for decision makers, analysts and shareholders alike to assess the strength of the Company’s balance sheet.
Net cash flow is a non-GAAP financial measure and its most directly comparable IFRS measure is Cash flow from operating activities. Net cash flow refers to Operating cash flow before working capital changes minus net investments. Net investments is a non-GAAP financial measure and its most directly comparable IFRS measure is Cash flow used in investing activities. Net investments refer to Cash flow used in investing activities including other transactions with non-controlling interests, including change in debt from renewable projects financing, including expenditures related to carbon credits, excluding organic loan repayment from equity affiliates and excluding capex linked to capitalized leasing contracts. Net cash flow can be a valuable tool for decision makers, analysts and shareholders alike because it illustrates cash flow generated by the operations of the Company post allocation of cash for organic investments and net acquisitions (acquisitions - assets sales - other operations with non-controlling interests). This performance indicator corresponds to the cash flow available to repay debt and allocate cash to shareholder distribution or share buybacks.
31
Operating cash flow before working capital changes is a non-GAAP financial measure and its most directly comparable IFRS measure is Cash flow from operating activities. Operating cash flow before working capital changes is defined as cash flow from operating activities before changes in working capital at replacement cost, excluding the mark-to-market effect of Integrated Gas and Integrated Power contracts, including capital gain from renewable projects sales and including organic loan repayments from equity affiliates. This indicator can be a valuable tool for decision makers, analysts and shareholders alike to help understand changes in cash flow from operating activities, excluding the impact of working capital changes across periods on a consistent basis and with the performance of peer companies in a manner that, when viewed in combination with the Company’s results prepared in accordance with GAAP, provides a more complete understanding of the factors and trends affecting the Company’s business and performance. This performance indicator is used by the Company as a base for its cash flow allocation and notably to guide on the share of its cash flow to be allocated to the distribution to shareholders.
Return on Average Capital Employed (ROACE) is a non-GAAP financial measure and its most directly comparable IFRS measure is the ratio of Net operating income to average capital employed between the beginning and the end of the period. ROACE is the ratio of adjusted net operating income to average capital employed at replacement cost between the beginning and the end of the period. This indicator can be a valuable tool for decision makers, analysts and shareholders alike to measure the profitability of the Company’s capital employed in its business operations and is used by the Company to benchmark its performance internally and externally with its peers.
MAIN INDICATORS
|
|
| 2Q23 |
| 1Q23 |
| 4Q22 |
| 3Q22 |
| 2Q22 | |
€/$ |
| 1.08 |
| 1.07 |
| 1.02 |
| 1.01 |
| 1.06 | ||
Brent |
| ($/b) |
| 78.1 |
| 81.2 |
| 88.8 |
| 100.8 |
| 113.9 |
Average liquids price* |
| ($/b) |
| 72.0 |
| 73.4 |
| 80.6 |
| 93.6 |
| 102.9 |
Average gas price* (1) |
| ($/Mbtu) |
| 5.98 |
| 8.89 |
| 12.74 |
| 16.83 |
| 11.01 |
Average LNG price** (1) |
| ($/Mbtu) |
| 9.84 |
| 13.27 |
| 14.83 |
| 21.51 |
| 13.96 |
Variable Cost Margin, European refining*** |
| ($/t) |
| 42.7 |
| 87.8 |
| 73.6 |
| 99.2 |
| 145.7 |
* | Sales in $ / sales in volume for consolidated affiliates. |
** | Sales in $ / sales in volume for consolidated and equity affiliates. |
(1) | Does not take into account gas and LNG trading activities, which results are expected to be significantly higher compared to the third quarter 2021, capturing optimization opportunities generated by large LNG trading portfolio in the prevailing high gas spot price environment. |
*** | This indicator represents the average margin on variable costs realized by TotalEnergies’ European refining business (equal to the difference between the sales of refined products realized by TotalEnergies’ European refining and the crude purchases as well as associated variable costs, divided by refinery throughput in tons). |
Disclaimer: Data is based on TotalEnergies’ reporting and is not audited.
32
CONSOLIDATED STATEMENT OF INCOME
TotalEnergies
(unaudited)
| 2nd quarter |
| 1st quarter |
| 2nd quarter | |
(M$)(a) | 2023 | 2023 | 2022 | |||
Sales | | | | |||
Excise taxes | ( | ( | ( | |||
Revenues from sales | | | | |||
Purchases, net of inventory variation | ( | ( | ( | |||
Other operating expenses | ( | ( | ( | |||
Exploration costs | ( | ( | ( | |||
Depreciation, depletion and impairment of tangible assets and mineral interests | ( | ( | ( | |||
Other income | | | | |||
Other expense | ( | ( | ( | |||
Financial interest on debt | ( | ( | ( | |||
Financial income and expense from cash & cash equivalents | | | | |||
Cost of net debt | ( | ( | ( | |||
Other financial income | | | | |||
Other financial expense | ( | ( | ( | |||
Net income (loss) from equity affiliates | | | ( | |||
Income taxes | ( | ( | ( | |||
Consolidated net income | | | | |||
TotalEnergies share | | | | |||
Non-controlling interests | | | | |||
Earnings per share ($) | | | | |||
Fully-diluted earnings per share ($) | | | |
(a) Except for per share amounts.
33
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
TotalEnergies
(unaudited)
| 2nd quarter |
| 1st quarter |
| 2nd quarter | |
(M$) | 2023 | 2023 | 2022 | |||
Consolidated net income | | | | |||
Other comprehensive income |
| |||||
Actuarial gains and losses | | | | |||
Change in fair value of investments in equity instruments | ( | | ( | |||
Tax effect | ( | ( | ( | |||
Currency translation adjustment generated by the parent company | ( | | ( | |||
Items not potentially reclassifiable to profit and loss | | | ( | |||
Currency translation adjustment | ( | ( | | |||
Cash flow hedge | | | | |||
Variation of foreign currency basis spread | | ( | | |||
share of other comprehensive income of equity affiliates, net amount | | ( | | |||
Other | ( | | ( | |||
Tax effect | ( | ( | ( | |||
Items potentially reclassifiable to profit and loss | | ( | | |||
Total other comprehensive income (net amount) | | | | |||
Comprehensive income | | | | |||
TotalEnergies share | | | | |||
Non-controlling interests | | | |
34
CONSOLIDATED STATEMENT OF INCOME
TotalEnergies
(unaudited)
| 1st half |
| 1st half | |
(M$)(a) | 2023 | 2022 | ||
Sales | | | ||
Excise taxes | ( | ( | ||
Revenues from sales | | | ||
Purchases, net of inventory variation | ( | ( | ||
Other operating expenses | ( | ( | ||
Exploration costs | ( | ( | ||
Depreciation, depletion and impairment of tangible assets and mineral interests | ( | ( | ||
Other income | | | ||
Other expense | ( | ( | ||
Financial interest on debt | ( | ( | ||
Financial income and expense from cash & cash equivalents | | | ||
Cost of net debt | ( | ( | ||
Other financial income | | | ||
Other financial expense | ( | ( | ||
Net income (loss) from equity affiliates | | ( | ||
Income taxes | ( | ( | ||
Consolidated net income | | | ||
TotalEnergies share | | | ||
Non-controlling interests | | | ||
Earnings per share ($) | | | ||
Fully-diluted earnings per share ($) | | |
(a) Except for per share amounts.
35
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
TotalEnergies
(unaudited)
| 1st half |
| 1st half | |
(M$) | 2023 | 2022 | ||
Consolidated net income | | | ||
Other comprehensive income | ||||
Actuarial gains and losses | | | ||
Change in fair value of investments in equity instruments | | ( | ||
Tax effect | ( | ( | ||
Currency translation adjustment generated by the parent company | | ( | ||
Items not potentially reclassifiable to profit and loss | | ( | ||
Currency translation adjustment | ( | | ||
Cash flow hedge | | | ||
Variation of foreign currency basis spread | | | ||
share of other comprehensive income of equity affiliates, net amount | ( | | ||
Other | ( | ( | ||
Tax effect | ( | ( | ||
Items potentially reclassifiable to profit and loss | | | ||
Total other comprehensive income (net amount) | | | ||
Comprehensive income | | | ||
TotalEnergies share | | | ||
Non-controlling interests | | |
36
CONSOLIDATED BALANCE SHEET
TotalEnergies
| June 30, |
| March 31, |
| December 31, |
| June 30, | |
2023 | 2023 | 2022 | 2022 | |||||
(M$) | (unaudited) | (unaudited) | (unaudited) | |||||
ASSETS |
|
|
|
| ||||
Non-current assets |
|
|
|
|
|
|
|
|
Intangible assets, net |
| |
| |
| |
| |
Property, plant and equipment, net |
| |
| |
| |
| |
Equity affiliates : investments and loans |
| |
| |
| |
| |
Other investments |
| |
| |
| |
| |
Non-current financial assets |
| |
| |
| |
| |
Deferred income taxes |
| |
| |
| |
| |
Other non-current assets |
| |
| |
| |
| |
Total non-current assets |
| |
| |
| |
| |
Current assets |
|
|
|
|
|
| ||
Inventories, net |
| |
| |
| |
| |
Accounts receivable, net |
| |
| |
| |
| |
Other current assets |
| |
| |
| |
| |
Current financial assets |
| |
| |
| |
| |
Cash and cash equivalents |
| |
| |
| |
| |
Assets classified as held for sale |
| |
| |
| |
| |
Total current assets |
| |
| |
| |
| |
Total assets |
| |
| |
| |
| |
LIABILITIES & SHAREHOLDERS' EQUITY |
|
|
|
|
|
| ||
Shareholders’ equity |
|
|
|
|
|
| ||
Common shares |
| |
| |
| |
| |
Paid-in surplus and retained earnings |
| |
| |
| |
| |
Currency translation adjustment |
| ( |
| ( |
| ( |
| ( |
Treasury shares |
| ( |
| ( |
| ( |
| ( |
Total shareholders’ equity - TotalEnergies share |
| |
| |
| |
| |
Non-controlling interests |
| |
| |
| |
| |
Total shareholders’ equity |
| |
| |
| |
| |
Non-current liabilities |
|
|
|
|
|
| ||
Deferred income taxes |
| |
| |
| |
| |
Employee benefits |
| |
| |
| |
| |
Provisions and other non-current liabilities |
| |
| |
| |
| |
Non-current financial debt |
| |
| |
| |
| |
Total non-current liabilities |
| |
| |
| |
| |
Current liabilities |
|
|
|
| ||||
Accounts payable |
| |
| |
| |
| |
Other creditors and accrued liabilities |
| |
| |
| |
| |
Current borrowings |
| |
| |
| |
| |
Other current financial liabilities |
| |
| |
| |
| |
Liabilities directly associated with the assets classified as held for sale |
| |
| |
| |
| |
Total current liabilities |
| |
| |
| |
| |
Total liabilities & shareholders’ equity |
| |
| |
| |
| |
37
CONSOLIDATED STATEMENT OF CASH FLOW
TotalEnergies
(unaudited)
| 2nd quarter |
| 1st quarter |
| 2nd quarter | |
(M$) | 2023 | 2023 | 2022 | |||
CASH FLOW FROM OPERATING ACTIVITIES |
|
|
| |||
Consolidated net income | | | | |||
Depreciation, depletion, amortization and impairment | | | | |||
Non-current liabilities, valuation allowances and deferred taxes | | | | |||
(Gains) losses on disposals of assets | ( | ( | ( | |||
Undistributed affiliates’ equity earnings | | ( | | |||
(Increase) decrease in working capital | | ( | | |||
Other changes, net | | | | |||
Cash flow from operating activities | | | | |||
CASH FLOW USED IN INVESTING ACTIVITIES |
| |||||
Intangible assets and property, plant and equipment additions | ( | ( | ( | |||
Acquisitions of subsidiaries, net of cash acquired | ( | ( | ( | |||
Investments in equity affiliates and other securities | ( | ( | ( | |||
Increase in non-current loans | ( | ( | ( | |||
Total expenditures | ( | ( | ( | |||
Proceeds from disposals of intangible assets and property, plant and equipment | | | | |||
Proceeds from disposals of subsidiaries, net of cash sold | | | | |||
Proceeds from disposals of non-current investments | | | | |||
Repayment of non-current loans | | | | |||
Total divestments | | | | |||
Cash flow used in investing activities | ( | ( | ( | |||
CASH FLOW USED IN FINANCING ACTIVITIES |
| |||||
Issuance (repayment) of shares: |
| |||||
- Parent company shareholders | | - | | |||
- Treasury shares | ( | ( | ( | |||
Dividends paid: | ||||||
- Parent company shareholders | ( | ( | ( | |||
- Non-controlling interests | ( | ( | ( | |||
Net issuance (repayment) of perpetual subordinated notes | ( | - | ( | |||
Payments on perpetual subordinated notes | ( | ( | ( | |||
Other transactions with non-controlling interests | ( | ( | ( | |||
Net issuance (repayment) of non-current debt | ( | | | |||
Increase (decrease) in current borrowings | ( | ( | ( | |||
Increase (decrease) in current financial assets and liabilities | | | ( | |||
Cash flow from (used in) financing activities | ( | ( | ( | |||
Net increase (decrease) in cash and cash equivalents | ( | ( | | |||
Effect of exchange rates | | | ( | |||
Cash and cash equivalents at the beginning of the period | | | | |||
Cash and cash equivalents at the end of the period | | | |
38
CONSOLIDATED STATEMENT OF CASH FLOW
TotalEnergies
(unaudited)
| 1st half |
| 1st half | |
(M$) | 2023 | 2022 | ||
CASH FLOW FROM OPERATING ACTIVITIES |
|
| ||
Consolidated net income | | | ||
Depreciation, depletion, amortization and impairment | | | ||
Non-current liabilities, valuation allowances and deferred taxes | | | ||
(Gains) losses on disposals of assets | ( | ( | ||
Undistributed affiliates’ equity earnings | | | ||
(Increase) decrease in working capital | ( | ( | ||
Other changes, net | | | ||
Cash flow from operating activities | | | ||
CASH FLOW USED IN INVESTING ACTIVITIES |
|
| ||
Intangible assets and property, plant and equipment additions | ( | ( | ||
Acquisitions of subsidiaries, net of cash acquired | ( | ( | ||
Investments in equity affiliates and other securities | ( | ( | ||
Increase in non-current loans | ( | ( | ||
Total expenditures | ( | ( | ||
Proceeds from disposals of intangible assets and property, plant and equipment | | | ||
Proceeds from disposals of subsidiaries, net of cash sold | | | ||
Proceeds from disposals of non-current investments | | | ||
Repayment of non-current loans | | | ||
Total divestments | | | ||
Cash flow used in investing activities | ( | ( | ||
CASH FLOW USED IN FINANCING ACTIVITIES |
|
| ||
Issuance (repayment) of shares: |
|
| ||
- Parent company shareholders | | | ||
- Treasury shares | ( | ( | ||
Dividends paid: | ||||
- Parent company shareholders | ( | ( | ||
- Non-controlling interests | ( | ( | ||
Net issuance (repayment) of perpetual subordinated notes | ( | - | ||
Payments on perpetual subordinated notes | ( | ( | ||
Other transactions with non-controlling interests | ( | ( | ||
Net issuance (repayment) of non-current debt | | | ||
Increase (decrease) in current borrowings | ( | ( | ||
Increase (decrease) in current financial assets and liabilities | | | ||
Cash flow from (used in) financing activities | ( | ( | ||
Net increase (decrease) in cash and cash equivalents | ( | | ||
Effect of exchange rates | | ( | ||
Cash and cash equivalents at the beginning of the period | | | ||
Cash and cash equivalents at the end of the period | | |
39
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
TotalEnergies
(unaudited)
Paid-in | Shareholders’ | |||||||||||||||||
surplus and | Currency | equity - | Non- | Total | ||||||||||||||
Common shares issued | retained | translation | Treasury shares | TotalEnergies | controlling | shareholders’ | ||||||||||||
(M$) |
| Number |
| Amount |
| earnings |
| adjustment |
| Number |
| Amount |
| Share |
| interests |
| equity |
As of January 1, 2022 | |
| | | ( | ( |
| ( | | | | |||||||
Net income of the first half 2022 | - |
| - | | - | - |
| - | | | | |||||||
Other comprehensive income | - |
| - | | ( | - |
| - | | ( | | |||||||
Comprehensive Income | - |
| - | | ( | - |
| - | | | | |||||||
Dividend | - |
| - | ( | - | - |
| - | ( | ( | ( | |||||||
Issuance of common shares | |
| | | - | - |
| - | | - | | |||||||
Purchase of treasury shares | - |
| - | - | - | ( |
| ( | ( | - | ( | |||||||
Sale of treasury shares(a) | - |
| - | ( | - | |
| | - | - | - | |||||||
Share-based payments | - |
| - | | - | - |
| - | | - | | |||||||
Share cancellation | ( |
| ( | ( | - | |
| | - | - | - | |||||||
Net issuance (repayment) of perpetual subordinated notes | - |
| - | ( | - | - |
| - | ( | - | ( | |||||||
Payments on perpetual subordinated notes | - |
| - | ( | - | - |
| - | ( | - | ( | |||||||
Other operations with non-controlling interests | - |
| - | | — | - |
| - | | ( | ( | |||||||
Other items | - |
| - | ( | — | - |
| - | ( | | ( | |||||||
As of June 30, 2022 | |
| | | ( | ( |
| ( | | | | |||||||
Net income of the second half 2022 | - |
| - | | - | - |
| - | | | | |||||||
Other comprehensive income | - |
| - | ( | | - |
| - | ( | | ( | |||||||
Comprehensive Income | - |
| - | | | - |
| - | | | | |||||||
Dividend | - |
| - | ( | - | - |
| - | ( | ( | ( | |||||||
Issuance of common shares | - |
| - | ( | - | - |
| - | ( | - | ( | |||||||
Purchase of treasury shares | - |
| - | - | - | ( |
| ( | ( | - | ( | |||||||
Sale of treasury shares(a) | - |
| - | ( | - | |
| | - | - | - | |||||||
Share-based payments | - |
| - | | - | - |
| - | | - | | |||||||
Share cancellation | - |
| - | - | - | - |
| - | - | - | - | |||||||
Net issuance (repayment) of perpetual subordinated notes | - |
| - | - | - | - |
| - | - | - | - | |||||||
Payments on perpetual subordinated notes | - |
| - | ( | - | - |
| - | ( | - | ( | |||||||
Other operations with non-controlling interests | - |
| - | | | - |
| - | | | | |||||||
Other items | - |
| - | | - | - |
| - | | ( | ( | |||||||
As of December 31, 2022 | |
| | | ( | ( |
| ( | | | | |||||||
Net income of the first half 2023 | - |
| - | | - | - |
| - | | | | |||||||
Other comprehensive income | - |
| - | | | - |
| - | | ( | | |||||||
Comprehensive Income | - |
| - | | | - |
| - | | | | |||||||
Dividend | - |
| - | ( | - | - |
| - | ( | ( | ( | |||||||
Issuance of common shares | |
| | | - | - |
| - | | - | | |||||||
Purchase of treasury shares | - |
| - | - | - | ( |
| ( | ( | - | ( | |||||||
Sale of treasury shares(a) | - |
| - | ( | - | |
| | - | - | - | |||||||
Share-based payments | - |
| - | | - | - |
| - | | - | | |||||||
Share cancellation | ( |
| ( | ( | - | |
| | - | - | - | |||||||
Net issuance (repayment) of perpetual subordinated notes | - |
| - | ( | - | - |
| - | ( | - | ( | |||||||
Payments on perpetual subordinated notes | - |
| - | ( | - | - |
| - | ( | - | ( | |||||||
Other operations with non-controlling interests | - |
| - | | ( | - |
| - | | ( | ( | |||||||
Other items | - |
| - | ( | - | - |
| - | ( | - | ( | |||||||
As of June 30, 2023 | |
| | | ( | ( |
| ( | | | | |||||||
(a)
40
TotalEnergies
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FIRST SIX MONTHS 2023
(unaudited)
1) Basis of preparation of the consolidated financial statements
The consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and IFRS as published by the International Accounting Standards Board (IASB).
The interim consolidated financial statements of TotalEnergies SE and its subsidiaries (the Company) as of June 30, 2023, are presented in U.S. dollars and have been prepared in accordance with International Accounting Standard (IAS) 34 “Interim Financial Reporting”.
The accounting principles applied for the consolidated financial statements at June 30, 2023, are consistent with those used for the financial statements at December 31, 2022.
The preparation of financial statements in accordance with IFRS for the closing as of June 30, 2023 requires the General Management to make estimates, assumptions and judgments that affect the information reported in the Consolidated Financial Statements and the Notes thereto.
These estimates, assumptions and judgments are based on historical experience and other factors believed to be reasonable at the date of preparation of the financial statements. They are reviewed on an on-going basis by General Management and therefore could be revised as circumstances change or as a result of new information.
The main estimates, judgments and assumptions relate to the estimation of hydrocarbon reserves in application of the successful efforts method for the oil and gas activities, asset impairments, employee benefits, asset retirement obligations and income taxes. These estimates and assumptions are described in the Notes to the Consolidated Financial Statements as of December 31, 2022.
The consolidated financial statements as of December 31, 2022 were impacted by the Russian-Ukrainian conflict. The Russian assets were fully depreciated, except for those relating to Yamal LNG. As of June 30, 2023, in the absence of any new event, assessments and judgments taken into account in the valuation of assets remain in place.
Different estimates, assumptions and judgments could significantly affect the information reported, and actual results may differ from the amounts included in the Consolidated Financial Statements and the Notes thereto.
Furthermore, when the accounting treatment of a specific transaction is not addressed by any accounting standard or interpretation, the General Management of the Company applies its judgment to define and apply accounting policies that provide information consistent with the general IFRS concepts: faithful representation, relevance and materiality.
2) Changes in the Company structure
2.1) Main acquisitions and divestments
| Ø | Exploration & Production |
| ● | In March 2023, TotalEnergies has signed an agreement with CEPSA to acquire CEPSA’s upstream assets in the United Arab Emirates with an effective date of January 1, 2023. The assets to be acquired are: |
| o | a |
The SARB and Umm Lulu concession includes
41
| o | a |
The Mubarraz concession is comprised of
The SARB and Umm Lulu transaction was completed on March 15, 2023. The Mubarraz transaction was not completed following Cosmo’s decision to exercise its right of first refusal on the proposed transaction on April 21, 2023 in accordance with the terms of the agreements.
| Ø | Integrated LNG |
| ● | On June 12, 2022, following the request for proposals in relation to partner selection for the North Field East (NFE) liquified natural gas project, TotalEnergies has been awarded, a |
| Ø | Integrated Power |
| ● | On October 26, 2022, TotalEnergies and Casa dos Ventos (CDV), Brazil's leading renewable energy developer, announced the creation of a |
2.2) Major business combinations
| Ø | Exploration & Production |
| ● | Acquisition of participating interest in SARB and Umm Lulu offshore concession |
In accordance with IFRS 3 “Business combinations”, TotalEnergies is assessing the fair value of identifiable acquired assets, liabilities and contingent liabilities on the basis of available information. A preliminary purchase price allocation has been done in the second quarter following the acquisition, this assessment will be finalized within 12 months following the acquisition date.
2.3) Divestment projects
| Ø | Exploration & Production |
On April 27, 2023, TotalEnergies announced the signature of an agreement with Suncor Energy Inc. for the sale of the entirety of the shares of TotalEnergies EP Canada Ltd for a consideration including a
1 Commercial Operation Date
42
On May 26, 2023 ConocoPhillips has notified TotalEnergies that it is exercising its preemption right to purchase the
Following the exercise by ConocoPhillips of its preemption right, TotalEnergies and Suncor are continuing discussions regarding the sale of TotalEnergies EP Canada Ltd shares, including the Fort Hills working interest and the associated logistics.
As of June 30, 2023, the assets and liabilities have been respectively classified in the consolidated balance sheet as “assets classified as held for sale” for an amount of $
| Ø | Marketing & Services |
On March 16, 2023, TotalEnergies and Alimentation Couche-Tard have signed agreements covering TotalEnergies' retail networks in four European countries. As part of this agreement, TotalEnergies will join forces with Couche-Tard in Belgium and Luxembourg and transfer its networks in Germany and the Netherlands.
This planned transaction, which is based on an enterprise value of
As of June 30, 2023, the assets and liabilities have been respectively classified in the consolidated balance sheet as “assets classified as held for sale” for an amount of $
3) Business segment information
Description of the business segments
Financial information by business segment is reported in accordance with the internal reporting system and shows internal segment information that is used to manage and measure the performance of TotalEnergies and which is reviewed by the main operational decision-making body of the Company, namely the Executive Committee.
The operational profit and assets are broken down by business segment prior to the consolidation and inter-segment adjustments.
Sales prices between business segments approximate market prices.
The profitable growth in the LNG and power integrated value chains are two of the key axes of TotalEnergies’s strategy.
In order to give more visibility to these businesses, the Board of Directors has decided that from the first quarter 2023, Integrated LNG and Integrated Power results, previously grouped in the Integrated Gas, Renewables & Power (iGRP) segment, would be reported separately as two segments.
A new reporting structure for the business segments’ financial information has been put in place, effective January 1, 2023. It is based on the following
- | An Exploration-Production segment; |
- | An Integrated LNG segment covering LNG production and trading activities as well as biogas, hydrogen and gas trading activities; |
- | An Integrated Power segment covering generation, storage, electricity trading and B2B-B2C distribution of gas and electricity; |
43
- | A Refining & Chemicals segment constituting a major industrial hub comprising the activities of refining, petrochemicals and specialty chemicals. This segment also includes the activities of oil Supply, Trading and marine Shipping; |
- | A Marketing & Services segment including the global activities of supply and marketing in the field of petroleum products; |
In addition the Corporate segment includes holdings operating and financial activities.
This new segment reporting has been prepared in accordance with IFRS 8 and according to the same principles as the internal reporting followed by the TotalEnergies's Executive Committee.
For the Integrated LNG and Integrated Power segments, the principles for the preparation of this segment information are as follows:
- | The management of balance sheet positions (including margin calls) related to to centralized markets access for LNG, gas and power activities since 2022 has been fully included in the Integrated LNG segment. |
- | Effects of changes in the fair value of gas and LNG positions are allocated to the operating income of Integrated LNG segment. |
- | Effects of changes in the fair value of power positions are allocated to the operating income of Integrated Power segment. |
Due to the change in the Company's internal organizational structure affecting the composition of the business segments, the segment reporting data for the years 2021 and 2022 has been restated.
Adjustment items
Performance indicators excluding the adjustment items, such as adjusted operating income, adjusted net operating income, and adjusted net income are meant to facilitate the analysis of the financial performance and the comparison of income between periods.
Adjustment items include:
| (i) | Special items |
Due to their unusual nature or particular significance, certain transactions qualified as “special items” are excluded from the business segment figures. In general, special items relate to transactions that are significant, infrequent or unusual. However, in certain instances, transactions such as restructuring costs or assets disposals, which are not considered to be representative of the normal course of business, may be qualified as special items although they may have occurred within prior years or are likely to occur again within the coming years.
| (ii) | The inventory valuation effect |
The adjusted results of the Refining & Chemicals and Marketing & Services segments are presented according to the replacement cost method. This method is used to assess the segments’ performance and facilitate the comparability of the segments’ performance with those of its competitors.
In the replacement cost method, which approximates the LIFO (Last-In, First-Out) method, the variation of inventory values in the statement of income is, depending on the nature of the inventory, determined using either the month-end prices differential between one period and another or the average prices of the period rather than the historical value. The inventory valuation effect is the difference between the results according to the FIFO (First-In, First-Out) and the replacement cost methods.
44
| (iii) | Effect of changes in fair value |
The effect of changes in fair value presented as adjustment items reflects for certain transactions differences between the internal measure of performance used by TotalEnergies’s management and the accounting for these transactions under IFRS.
IFRS requires that trading inventories be recorded at their fair value using period end spot prices. In order to best reflect the management of economic exposure through derivative transactions, internal indicators used to measure performance include valuations of trading inventories based on forward prices.
TotalEnergies, in its trading activities, enters into storage contracts, whose future effects are recorded at fair value in the Company’s internal economic performance. IFRS precludes recognition of this fair value effect.
Furthermore, TotalEnergies enters into derivative instruments to risk manage certain operational contracts or assets. Under IFRS, these derivatives are recorded at fair value while the underlying operational transactions are recorded as they occur. Internal indicators defer the fair value on derivatives to match with the transaction occurrence.
The adjusted results (adjusted operating income, adjusted net operating income, adjusted net income) are defined as replacement cost results, adjusted for special items and the effect of changes in fair value.
45
3.1) Information by business segment
1sthalf 2023 | Exploration | Refining | Marketing | |||||||||||||
& | Integrated | Integrated | & | & | ||||||||||||
(M$) |
| Production |
| LNG |
| Power |
| Chemicals |
| Services |
| Corporate |
| Intercompany |
| Total |
External sales |
| | |
| |
| |
| |
| |
| - |
| | |
Intersegment sales |
| | |
| |
| |
| |
| |
| ( |
| - | |
Excise taxes |
| - | - |
| - |
| ( |
| ( |
| - |
| - |
| ( | |
Revenues from sales |
| | |
| |
| |
| |
| |
| ( |
| | |
Operating expenses |
| ( | ( |
| ( |
| ( |
| ( |
| ( |
| |
| ( | |
Depreciation, depletion and impairment of tangible assets and mineral interests |
| ( | ( |
| ( |
| ( |
| ( |
| ( |
| - |
| ( | |
Operating income |
| | |
| |
| |
| |
| ( |
| - |
| | |
Net income (loss) from equity affiliates and other items |
| | |
| ( |
| |
| |
| ( |
| - |
| | |
Tax on net operating income |
| ( | ( |
| ( |
| ( |
| ( |
| |
| - |
| ( | |
Net operating income |
| | |
| |
| |
| |
| ( |
| - |
| | |
Net cost of net debt |
|
|
|
|
|
|
| ( | ||||||||
Non-controlling interests |
|
|
|
|
|
|
| ( | ||||||||
Net income - TotalEnergies share |
|
|
|
|
|
|
| |
1sthalf 2023 (adjustments)(a) | Exploration | Refining | Marketing | |||||||||||||
& | Integrated | Integrated | & | & | ||||||||||||
(M$) |
| Production |
| LNG |
| Power |
| Chemicals |
| Services |
| Corporate |
| Intercompany |
| Total |
External sales |
| - | - |
| - |
| - |
| - |
| - |
| - |
| - | |
Intersegment sales |
| - | - |
| - |
| - |
| - |
| - |
| - |
| - | |
Excise taxes |
| - | - |
| - |
| - |
| - |
| - |
| - |
| - | |
Revenues from sales |
| - | - |
| - |
| - |
| - |
| - |
| - |
| - | |
Operating expenses |
| ( | ( |
| |
| ( |
| ( |
| ( |
| - |
| ( | |
Depreciation, depletion and impairment of tangible assets and mineral interests |
| ( | - |
| - |
| ( |
| - |
| - |
| - |
| ( | |
Operating income (b) |
| ( | ( |
| |
| ( |
| ( |
| ( |
| - |
| ( | |
Net income (loss) from equity affiliates and other items |
| ( | |
| ( |
| ( |
| |
| |
| - |
| ( | |
Tax on net operating income |
| | |
| ( |
| ( |
| |
| |
| - |
| | |
Net operating income (b) |
| ( | ( |
| ( |
| ( |
| |
| ( |
| - |
| ( | |
Net cost of net debt |
|
|
|
|
|
|
| | ||||||||
Non-controlling interests |
|
|
|
|
|
|
| ( | ||||||||
Net income - TotalEnergies share |
|
|
|
|
|
|
| ( | ||||||||
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value. | ||||||||||||||||
(b) Of which inventory valuation effect | ||||||||||||||||
- On operating income | - | - | ( | ( | - | - | - | |||||||||
- On net operating income | - | - | ( | ( | - | - | - |
1sthalf 2023 (adjusted) | Exploration | Refining | Marketing | |||||||||||||
& | Integrated | Integrated | & | & | ||||||||||||
(M$) |
| Production |
| LNG |
| Power |
| Chemicals |
| Services |
| Corporate |
| Intercompany |
| Total |
External sales |
| | |
| |
| |
| |
| |
| - |
| | |
Intersegment sales |
| | |
| |
| |
| |
| |
| ( |
| - | |
Excise taxes |
| - | - |
| - |
| ( |
| ( |
| - |
| - |
| ( | |
Revenues from sales |
| | |
| |
| |
| |
| |
| ( |
| | |
Operating expenses |
| ( | ( |
| ( |
| ( |
| ( |
| ( |
| |
| ( | |
Depreciation, depletion and impairment of tangible assets and mineral interests |
| ( | ( |
| ( |
| ( |
| ( |
| ( |
| - |
| ( | |
Adjusted operating income |
| | |
| |
| |
| |
| ( |
| - |
| | |
Net income (loss) from equity affiliates and other items |
| | |
| |
| |
| |
| ( |
| - |
| | |
Tax on net operating income |
| ( | ( |
| ( |
| ( |
| ( |
| |
| - |
| ( | |
Adjusted net operating income |
| | |
| |
| |
| |
| ( |
| - |
| | |
Net cost of net debt |
|
|
|
|
|
|
| ( | ||||||||
Non-controlling interests |
|
|
|
|
|
|
| ( | ||||||||
Adjusted net income - TotalEnergies share |
|
|
|
|
|
|
| |
1sthalf 2023 | Exploration | Refining | Marketing | |||||||||||||
& | Integrated | Integrated | & | & | ||||||||||||
(M$) |
| Production |
| LNG |
| Power |
| Chemicals |
| Services |
| Corporate |
| Intercompany |
| Total |
Total expenditures |
| | |
| |
| |
| |
| |
| - |
| | |
Total divestments |
| | |
| |
| |
| |
| |
| - |
| | |
Cash flow from operating activities |
| | |
| |
| |
| ( |
| ( |
| - |
| |
46
1sthalf 2022 | Exploration | Refining | Marketing | |||||||||||||
& | Integrated | Integrated | & | & | ||||||||||||
(M$) |
| Production |
| LNG |
| Power |
| Chemicals |
| Services |
| Corporate |
| Intercompany |
| Total |
External sales |
| | |
| |
| |
| |
| |
| - |
| | |
Intersegment sales |
| | |
| |
| |
| |
| |
| ( |
| - | |
Excise taxes |
| - | - |
| - |
| ( |
| ( |
| - |
| - |
| ( | |
Revenues from sales |
| | |
| |
| |
| |
| |
| ( |
| | |
Operating expenses |
| ( | ( |
| ( |
| ( |
| ( |
| ( |
| |
| ( | |
Depreciation, depletion and impairment of tangible assets and mineral interests |
| ( | ( |
| ( |
| ( |
| ( |
| ( |
| - |
| ( | |
Operating income |
| | |
| ( |
| |
| |
| ( |
| - |
| | |
Net income (loss) from equity affiliates and other items |
| ( | ( |
| |
| |
| |
| |
| - |
| ( | |
Tax on net operating income |
| ( | ( |
| ( |
| ( |
| ( |
| |
| - |
| ( | |
Net operating income |
| | |
| ( |
| |
| |
| ( |
| - |
| | |
Net cost of net debt |
|
| ( | |||||||||||||
Non-controlling interests |
|
| ( | |||||||||||||
Net income - TotalEnergies share |
|
| |
1sthalf 2022 (adjustments)(a) | Exploration | Refining | Marketing | |||||||||||||
& | Integrated | Integrated | & | & | ||||||||||||
(M$) |
| Production |
| LNG |
| Power |
| Chemicals |
| Services |
| Corporate |
| Intercompany |
| Total |
External sales |
| - | ( |
| |
| - |
| - |
| - |
| - |
| ( | |
Intersegment sales |
| - | - |
| - |
| - |
| - |
| - |
| - |
| - | |
Excise taxes |
| - | - |
| - |
| - |
| - |
| - |
| - |
| - | |
Revenues from sales |
| - | ( |
| |
| - |
| - |
| - |
| - |
| ( | |
Operating expenses |
| ( | |
| ( |
| |
| |
| ( |
| - |
| | |
Depreciation, depletion and impairment of tangible assets and mineral interests |
| ( | ( |
| - |
| - |
| ( |
| ( |
| - |
| ( | |
Operating income (b) |
| ( | |
| ( |
| |
| |
| ( |
| - |
| ( | |
Net income (loss) from equity affiliates and other items |
| ( | ( |
| |
| |
| ( |
| |
| - |
| ( | |
Tax on net operating income |
| | ( |
| |
| ( |
| ( |
| |
| - |
| ( | |
Net operating income (b) |
| ( | ( |
| ( |
| |
| |
| ( |
| - |
| ( | |
Net cost of net debt |
|
| | |||||||||||||
Non-controlling interests |
|
| ( | |||||||||||||
Net income - TotalEnergies share |
|
| ( | |||||||||||||
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value. | ||||||||||||||||
(b) Of which inventory valuation effect |
| |||||||||||||||
- On operating income |
| - | - | | | - | ||||||||||
- On net operating income |
| - | - | | | - |
1sthalf 2022 (adjusted) | Exploration | Refining | Marketing | |||||||||||||
& | Integrated | Integrated | & | & | ||||||||||||
(M$) |
| Production |
| LNG |
| Power |
| Chemicals |
| Services |
| Corporate |
| Intercompany |
| Total |
External sales |
| | |
| |
| |
| |
| |
| - |
| | |
Intersegment sales |
| | |
| |
| |
| |
| |
| ( |
| - | |
Excise taxes |
| - | - |
| - |
| ( |
| ( |
| - |
| - |
| ( | |
Revenues from sales |
| | |
| |
| |
| |
| |
| ( |
| | |
Operating expenses |
| ( | ( |
| ( |
| ( |
| ( |
| ( |
| |
| ( | |
Depreciation, depletion and impairment of tangible assets and mineral interests |
| ( | ( |
| ( |
| ( |
| ( |
| ( |
| - |
| ( | |
Adjusted operating income |
| | |
| |
| |
| |
| ( |
| - |
| | |
Net income (loss) from equity affiliates and other items |
| | |
| |
| |
| |
| |
| - |
| | |
Tax on net operating income |
| ( | ( |
| ( |
| ( |
| ( |
| ( |
| - |
| ( | |
Adjusted net operating income |
| | |
| |
| |
| |
| ( |
| - |
| | |
Net cost of net debt |
|
| ( | |||||||||||||
Non-controlling interests |
|
| ( | |||||||||||||
Adjusted net income - TotalEnergies share |
|
| |
1sthalf 2022 | Exploration | Refining | Marketing | |||||||||||||
& | Integrated | Integrated | & | & | ||||||||||||
(M$) |
| Production |
| LNG |
| Power |
| Chemicals |
| Services |
| Corporate |
| Intercompany |
| Total |
Total expenditures |
| | |
| |
| |
| |
| |
| - |
| | |
Total divestments |
| | |
| |
| |
| |
| |
| - |
| | |
Cash flow from operating activities |
| | |
| ( |
| |
| |
| ( |
| - |
| |
47
2nd quarter 2023 | Exploration | Refining | Marketing | |||||||||||||
& | Integrated | Integrated | & | & | ||||||||||||
(M$) |
| Production |
| LNG |
| Power |
| Chemicals |
| Services |
| Corporate |
| Intercompany |
| Total |
External sales |
| | |
| |
| |
| |
| |
| - |
| | |
Intersegment sales |
| | |
| |
| |
| |
| |
| ( |
| - | |
Excise taxes |
| - | - |
| - |
| ( |
| ( |
| - |
| - |
| ( | |
Revenues from sales |
| | |
| |
| |
| |
| |
| ( |
| | |
Operating expenses |
| ( | ( |
| ( |
| ( |
| ( |
| ( |
| |
| ( | |
Depreciation, depletion and impairment of tangible assets and mineral interests |
| ( | ( |
| ( |
| ( |
| ( |
| ( |
| - |
| ( | |
Operating income |
| | |
| |
| |
| |
| ( |
| - |
| | |
Net income (loss) from equity affiliates and other items |
| ( | |
| ( |
| |
| |
| ( |
| - |
| | |
Tax on net operating income |
| ( | ( |
| ( |
| ( |
| ( |
| ( |
| - |
| ( | |
Net operating income |
| | |
| |
| |
| |
| ( |
| - |
| | |
Net cost of net debt |
|
|
|
|
|
|
| ( | ||||||||
Non-controlling interests |
|
|
|
|
|
|
| ( | ||||||||
Net income - TotalEnergies share |
|
| |
2nd quarter 2023 (adjustments)(a) | Exploration | Refining | Marketing | |||||||||||||
& | Integrated | Integrated | & | & | ||||||||||||
(M$) |
| Production |
| LNG |
| Power |
| Chemicals |
| Services |
| Corporate |
| Intercompany |
| Total |
External sales |
| - | |
| - | - |
| - |
| - |
| - |
| | ||
Intersegment sales |
| - | - |
| - | - |
| - |
| - |
| - |
| - | ||
Excise taxes |
| - | - |
| - | - |
| - |
| - |
| - |
| - | ||
Revenues from sales |
| - | |
| - | - |
| - |
| - |
| - |
| | ||
Operating expenses |
| ( | ( |
| | ( |
| ( |
| ( |
| - |
| ( | ||
Depreciation, depletion and impairment of tangible assets and mineral interests |
| ( | - |
| - | - |
| - |
| - |
| - |
| ( | ||
Operating income (b) |
| ( | ( |
| | ( |
| ( |
| ( |
| - |
| ( | ||
Net income (loss) from equity affiliates and other items |
| ( | |
| ( | ( |
| - |
| |
| - |
| ( | ||
Tax on net operating income |
| | |
| | ( |
| |
| |
| - |
| | ||
Net operating income (b) |
| | ( |
| ( | ( |
| ( |
| ( |
| - |
| ( | ||
Net cost of net debt |
|
|
|
|
|
|
| | ||||||||
Non-controlling interests |
|
|
|
|
|
|
| ( | ||||||||
Net income - TotalEnergies share |
|
| ( | |||||||||||||
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value. |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
(b) Of which inventory valuation effect |
|
|
|
|
|
|
|
|
|
|
| |||||
- On operating income |
| - |
| - |
| ( |
| ( |
| - |
| |||||
- On net operating income |
| - |
| - |
| ( |
| ( |
| - |
|
2nd quarter 2023 (adjusted) | Exploration | Refining | Marketing | |||||||||||||
& | Integrated | Integrated | & | & | ||||||||||||
(M$) |
| Production |
| LNG |
| Power |
| Chemicals |
| Services |
| Corporate |
| Intercompany |
| Total |
External sales |
| | |
| |
| |
| |
| |
| - |
| | |
Intersegment sales |
| | |
| |
| |
| |
| |
| ( |
| - | |
Excise taxes |
| - | - |
| - |
| ( |
| ( |
| - |
| - |
| ( | |
Revenues from sales |
| | |
| |
| |
| |
| |
| ( |
| | |
Operating expenses |
| ( | ( |
| ( |
| ( |
| ( |
| ( |
| |
| ( | |
Depreciation, depletion and impairment of tangible assets and mineral interests |
| ( | ( |
| ( |
| ( |
| ( |
| ( |
| - |
| ( | |
Adjusted operating income |
| | |
| |
| |
| |
| ( |
| - |
| | |
Net income (loss) from equity affiliates and other items |
| | |
| |
| |
| |
| ( |
| - |
| | |
Tax on net operating income |
| ( | ( |
| ( |
| ( |
| ( |
| ( |
| - |
| ( | |
Adjusted net operating income |
| | |
| |
| |
| |
| ( |
| - |
| | |
Net cost of net debt |
|
|
|
|
|
|
| ( | ||||||||
Non-controlling interests |
|
|
|
|
|
|
| ( | ||||||||
Adjusted net income - TotalEnergies share |
|
| |
2nd quarter 2023 | Exploration | Refining | Marketing | |||||||||||||
& | Integrated | Integrated | & | & | ||||||||||||
(M$) |
| Production |
| LNG |
| Power |
| Chemicals |
| Services |
| Corporate |
| Intercompany |
| Total |
Total expenditures |
| | |
| |
| |
| |
| |
| - |
| | |
Total divestments |
| | |
| |
| |
| |
| |
| - |
| | |
Cash flow from operating activities |
| | |
| |
| |
| |
| ( |
| - |
| |
48
2nd quarter 2022 | Exploration | Refining | Marketing | |||||||||||||
& | Integrated | Integrated | & | & | ||||||||||||
(M$) |
| Production |
| LNG |
| Power |
| Chemicals |
| Services |
| Corporate |
| Intercompany |
| Total |
External sales |
| | |
| |
| |
| |
| |
| - |
| | |
Intersegment sales |
| | |
| |
| |
| |
| |
| ( |
| - | |
Excise taxes |
| - | - |
| - |
| ( |
| ( |
| - |
| - |
| ( | |
Revenues from sales |
| | |
| |
| |
| |
| |
| ( |
| | |
Operating expenses |
| ( | ( |
| ( |
| ( |
| ( |
| ( |
| |
| ( | |
Depreciation, depletion and impairment of tangible assets and mineral interests |
| ( | ( |
| ( |
| ( |
| ( |
| ( |
| - |
| ( | |
Operating income |
| | |
| ( |
| |
| |
| ( |
| - |
| | |
Net income (loss) from equity affiliates and other items |
| ( | |
| |
| |
| |
| |
| - |
| ( | |
Tax on net operating income |
| ( | ( |
| |
| ( |
| ( |
| ( |
| - |
| ( | |
Net operating income |
| | |
| ( |
| |
| |
| ( |
| - |
| | |
Net cost of net debt |
|
| ( | |||||||||||||
Non-controlling interests |
|
| ( | |||||||||||||
Net income - TotalEnergies share |
|
| |
2nd quarter 2022 (adjustments)(a) | Exploration | Refining | Marketing | |||||||||||||
& | Integrated | Integrated | & | & | ||||||||||||
(M$) |
| Production |
| LNG |
| Power |
| Chemicals |
| Services |
| Corporate |
| Intercompany |
| Total |
External sales |
| - | ( |
| - | - |
| - |
| - |
| - |
| ( | ||
Intersegment sales |
| - | - |
| - | - |
| - |
| - |
| - |
| - | ||
Excise taxes |
| - | - |
| - | - |
| - |
| - |
| - |
| - | ||
Revenues from sales |
| - | ( |
| - | - |
| - |
| - |
| - |
| ( | ||
Operating expenses |
| ( | |
| ( | |
| |
| ( |
| - |
| | ||
Depreciation, depletion and impairment of tangible assets and mineral interests |
| ( | ( |
| - | - |
| ( |
| - |
| - |
| ( | ||
Operating income (b) |
| ( | |
| ( | |
| |
| ( |
| - |
| | ||
Net income (loss) from equity affiliates and other items |
| ( | ( |
| | |
| ( |
| - |
| - |
| ( | ||
Tax on net operating income |
| | ( |
| | ( |
| ( |
| |
| - |
| | ||
Net operating income (b) |
| ( | ( |
| ( | |
| |
| ( |
| - |
| ( | ||
Net cost of net debt |
|
| | |||||||||||||
Non-controlling interests |
|
| ( | |||||||||||||
Net income - TotalEnergies share |
|
| ( | |||||||||||||
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value. |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
(b) Of which inventory valuation effect |
|
|
|
|
|
|
|
|
|
|
| |||||
- On operating income |
| - |
| - |
| |
| |
| - |
| - | - | |||
- On net operating income |
| - |
| - |
| |
| |
| - |
| - | - |
2nd quarter 2022 (adjusted) | Exploration | Refining | Marketing | |||||||||||||
& | Integrated | Integrated | & | & | ||||||||||||
(M$) |
| Production |
| LNG |
| Power |
| Chemicals |
| Services |
| Corporate |
| Intercompany |
| Total |
External sales |
| | |
| |
| |
| |
| |
| - |
| | |
Intersegment sales |
| | |
| |
| |
| |
| |
| ( |
| - | |
Excise taxes |
| - | - |
| - |
| ( |
| ( |
| - |
| - |
| ( | |
Revenues from sales |
| | |
| |
| |
| |
| |
| ( |
| | |
Operating expenses |
| ( | ( |
| ( |
| ( |
| ( |
| ( |
| |
| ( | |
Depreciation, depletion and impairment of tangible assets and mineral interests |
| ( | ( |
| ( |
| ( |
| ( |
| ( |
| - |
| ( | |
Adjusted operating income |
| | |
| |
| |
| |
| ( |
| - |
| | |
Net income (loss) from equity affiliates and other items |
| | |
| |
| |
| |
| |
| - |
| | |
Tax on net operating income |
| ( | ( |
| ( |
| ( |
| ( |
| ( |
| - |
| ( | |
Adjusted net operating income |
| | |
| |
| |
| |
| ( |
| - |
| | |
Net cost of net debt |
|
| ( | |||||||||||||
Non-controlling interests |
|
| ( | |||||||||||||
Adjusted net income - TotalEnergies share |
|
| |
2nd quarter 2022 | Exploration | Refining | Marketing | |||||||||||||
& | Integrated | Integrated | & | & | ||||||||||||
(M$) |
| Production |
| LNG |
| Power |
| Chemicals |
| Services |
| Corporate |
| Intercompany |
| Total |
Total expenditures |
| | |
| |
| |
| |
| |
| - |
| | |
Total divestments |
| | |
| |
| |
| |
| |
| - |
| | |
Cash flow from operating activities |
| | |
| |
| |
| |
| ( |
| - |
| |
49
3.2) Reconciliation of the information by business segment with consolidated financial statements
Consolidated | ||||||
1sthalf 2023 | statement of | |||||
(M$) |
| Adjusted |
| Adjustments(a) |
| income |
Sales | | - | | |||
Excise taxes |
| ( |
| - |
| ( |
Revenues from sales |
| |
| - |
| |
Purchases net of inventory variation |
| ( |
| ( |
| ( |
Other operating expenses |
| ( |
| ( |
| ( |
Exploration costs |
| ( |
| |
| ( |
Depreciation, depletion and impairment of tangible assets and mineral interests |
| ( |
| ( |
| ( |
Other income |
| |
| |
| |
Other expense |
| ( |
| ( |
| ( |
Financial interest on debt |
| ( |
| - |
| ( |
Financial income and expense from cash & cash equivalents |
| |
| |
| |
Cost of net debt |
| ( |
| |
| ( |
Other financial income |
| |
| |
| |
Other financial expense |
| ( |
| - |
| ( |
Net income (loss) from equity affiliates |
| |
| ( |
| |
Income taxes |
| ( |
| |
| ( |
Consolidated net income |
| |
| ( |
| |
TotalEnergies share |
| |
| ( |
| |
Non-controlling interests |
| |
| |
| |
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value.
Consolidated | ||||||
1sthalf 2022 | statement of | |||||
(M$) |
| Adjusted |
| Adjustments(a) |
| income |
Sales | | ( | | |||
Excise taxes |
| ( |
| - |
| ( |
Revenues from sales |
| |
| ( |
| |
Purchases net of inventory variation |
| ( |
| |
| ( |
Other operating expenses |
| ( |
| ( |
| ( |
Exploration costs |
| ( |
| ( |
| ( |
Depreciation, depletion and impairment of tangible assets and mineral interests |
| ( |
| ( |
| ( |
Other income |
| |
| |
| |
Other expense |
| ( |
| ( |
| ( |
Financial interest on debt |
| ( |
| - |
| ( |
Financial income and expense from cash & cash equivalents |
| |
| |
| |
Cost of net debt |
| ( |
| |
| ( |
Other financial income |
| |
| |
| |
Other financial expense |
| ( |
| - |
| ( |
Net income (loss) from equity affiliates |
| |
| ( |
| ( |
Income taxes |
| ( |
| ( |
| ( |
Consolidated net income |
| |
| ( |
| |
TotalEnergies share |
| |
| ( |
| |
Non-controlling interests |
| |
| |
| |
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value.
50
| Consolidated | |||||
2nd quarter 2023 | statement | |||||
(M$) |
| Adjusted |
| Adjustments(a) |
| of income |
Sales |
| |
| |
| |
Excise taxes |
| ( |
| - | ( | |
Revenues from sales |
| |
| |
| |
Purchases net of inventory variation |
| ( |
| ( |
| ( |
Other operating expenses |
| ( |
| ( |
| ( |
Exploration costs |
| ( |
| - |
| ( |
Depreciation, depletion and impairment of tangible assets and mineral interests |
| ( |
| ( |
| ( |
Other income |
| |
| - |
| |
Other expense |
| ( |
| ( |
| ( |
Financial interest on debt |
| ( |
| - |
| ( |
Financial income and expense from cash & cash equivalents |
| |
| |
| |
Cost of net debt |
| ( |
| |
| ( |
Other financial income |
| |
| |
| |
Other financial expense |
| ( |
| - |
| ( |
Net income (loss) from equity affiliates |
| |
| ( |
| |
Income taxes |
| ( |
| |
| ( |
Consolidated net income |
| |
| ( |
| |
TotalEnergies share |
| |
| ( |
| |
Non-controlling interests |
| |
| |
| |
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value.
| Consolidated | |||||
2nd quarter 2022 | statement | |||||
(M$) |
| Adjusted |
| Adjustments(a) |
| of income |
Sales |
| |
| ( |
| |
Excise taxes |
| ( |
| - | ( | |
Revenues from sales |
| |
| ( |
| |
Purchases net of inventory variation |
| ( |
| |
| ( |
Other operating expenses |
| ( |
| ( |
| ( |
Exploration costs |
| ( |
| - |
| ( |
Depreciation, depletion and impairment of tangible assets and mineral interests |
| ( |
| ( |
| ( |
Other income |
| |
| - |
| |
Other expense |
| ( |
| ( |
| ( |
Financial interest on debt |
| ( |
| - |
| ( |
Financial income and expense from cash & cash equivalents |
| |
| |
| |
Cost of net debt |
| ( |
| |
| ( |
Other financial income |
| |
| - |
| |
Other financial expense |
| ( |
| - |
| ( |
Net income (loss) from equity affiliates |
| |
| ( |
| ( |
Income taxes |
| ( |
| ( |
| ( |
Consolidated net income |
| |
| ( |
| |
TotalEnergies share |
| |
| ( |
| |
Non-controlling interests |
| |
| |
| |
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value.
51
3.3) Adjustment items
The detail of the adjustment items is presented in the table below.
ADJUSTMENTS TO OPERATING INCOME
| Exploration | Refining | Marketing |
| ||||||||||||
& | Integrated | Integrated | & | & | ||||||||||||
(M$) |
|
| Production |
| LNG |
| Power |
| Chemicals |
| Services |
| Corporate |
| Total | |
2nd quarter 2023 | Inventory valuation effect | - | - | - | ( | ( | - | ( | ||||||||
Effect of changes in fair value | - | ( | | - | - | - | ( | |||||||||
| Restructuring charges |
| - | - |
| - |
| - |
| - |
| - |
| - | ||
| Asset impairment and provisions charges |
| ( | - |
| - |
| - |
| - |
| - |
| ( | ||
Gains (losses) on disposals of assets | – | – | – | – | – | – | – | |||||||||
| Other items |
| ( | ( |
| ( |
| ( |
| ( |
| ( |
| ( | ||
Total |
| ( | ( |
| |
| ( |
| ( |
| ( |
| ( | |||
2nd quarter 2022 |
| Inventory valuation effect |
| - | - | - | | | - | | ||||||
| Effect of changes in fair value |
| - | | ( | - | - | - | ( | |||||||
| Restructuring charges |
| - | - |
| ( |
| - |
| - |
| - |
| ( | ||
| Asset impairment and provisions charges |
| ( | ( |
| - |
| - |
| |
| - |
| ( | ||
| Other items |
| ( | - |
| ( |
| - |
| ( |
| ( |
| ( | ||
Total |
| ( | |
| ( |
| |
| |
| ( |
| | |||
1st half 2023 |
| Inventory valuation effect |
| - | - |
| - |
| ( |
| ( |
| - |
| ( | |
| Effect of changes in fair value |
| - | ( |
| |
| - |
| - |
| - |
| ( | ||
| Restructuring charges |
| - | - |
| - |
| - |
| - |
| - |
| - | ||
| Asset impairment and provisions charges |
| ( | - |
| - |
| ( |
| - |
| - |
| ( | ||
Gains (losses) on disposals of assets | – | – | – | – | ( | – | ( | |||||||||
| Other items |
| ( | ( |
| ( |
| ( |
| ( |
| ( |
| ( | ||
Total |
| ( | ( |
| |
| ( |
| ( |
| ( |
| ( | |||
1st half 2022 |
| Inventory valuation effect |
| - | - |
| - |
| |
| |
| - |
| | |
| Effect of changes in fair value |
| - | |
| ( |
| - |
| - |
| - |
| ( | ||
| Restructuring charges |
| - | - |
| ( |
| - |
| - |
| - |
| ( | ||
| Asset impairment and provisions charges |
| ( | ( |
| - |
| - |
| ( |
| ( |
| ( | ||
| Other items |
| ( | - |
| ( |
| - |
| ( |
| ( |
| ( | ||
Total |
| ( | |
| ( |
| |
| |
| ( |
| ( |
52
ADJUSTMENTS TO NET INCOME, TotalEnergies SHARE
Exploration | Refining | Marketing |
| |||||||||||||
& | Integrated | Integrated | & | & | ||||||||||||
(M$) |
|
| Production |
| LNG |
| Power |
| Chemicals |
| Services |
| Corporate |
| Total | |
2nd quarter 2023 | Inventory valuation effect | - | - | - | ( | ( | - | ( | ||||||||
Effect of changes in fair value | - | ( | | - | - | - | ( | |||||||||
| Restructuring charges |
| - | - |
| ( |
| - |
| - |
| - |
| ( | ||
| Asset impairment and provisions charges |
| ( | - |
| ( |
| - |
| - |
| - |
| ( | ||
| Gains (losses) on disposals of assets |
| - | - | - |
| - |
| - |
| - |
| - | |||
| Other items |
| | |
| ( |
| ( |
| ( |
| ( |
| | ||
Total |
| | ( |
| ( |
| ( |
| ( |
| ( |
| ( | |||
2nd quarter 2022 |
| Inventory valuation effect |
| - | - | - | | | - | | ||||||
| Effect of changes in fair value |
| - | | ( | - | - | - | ( | |||||||
| Restructuring charges |
| - | - |
| ( |
| - |
| - |
| - |
| ( | ||
| Asset impairment and provisions charges |
| ( | ( |
| - |
| - |
| - |
| - |
| ( | ||
| Gains (losses) on disposals of assets |
| - | - | - |
| - |
| - |
| - |
| - | |||
| Other items |
| ( | ( |
| - |
| - |
| ( |
| ( |
| ( | ||
Total |
| ( | ( |
| ( |
| |
| |
| ( |
| ( | |||
1st half 2023 |
| Inventory valuation effect |
| - | - |
| - |
| ( |
| ( |
| - |
| ( | |
| Effect of changes in fair value |
| - | ( |
| |
| - |
| - |
| - |
| ( | ||
| Restructuring charges |
| - | - |
| ( |
| - |
| - |
| - |
| ( | ||
| Asset impairment and provisions charges |
| ( | - |
| ( |
| ( |
| - |
| - |
| ( | ||
| Gains (losses) on disposals of assets |
| - | - | - |
| - |
| |
| - |
| | |||
| Other items |
| | |
| ( |
| ( |
| ( |
| ( |
| ( | ||
Total |
| ( | ( |
| ( |
| ( |
| |
| ( |
| ( | |||
1st half 2022 |
| Inventory valuation effect |
| - | - |
| - |
| |
| |
| - |
| | |
| Effect of changes in fair value |
| - | |
| ( |
| - |
| - |
| - |
| ( | ||
| Restructuring charges |
| - | - |
| ( |
| - |
| - |
| - |
| ( | ||
| Asset impairment and provisions charges |
| ( | ( |
| - |
| - |
| ( |
| ( |
| ( | ||
| Gains (losses) on disposals of assets |
| - | - | - |
| - |
| - |
| - |
| - | |||
| Other items |
| ( | ( |
| - |
| ( |
| ( |
| ( |
| ( | ||
Total |
| ( | ( |
| ( |
| |
| |
| ( |
| ( | |||
53
4) Shareholders’ equity
Treasury shares (TotalEnergies shares held directly by TotalEnergies SE)
| December 31, 2022 |
| June 30, 2023 | |
Number of treasury shares |
| |
| |
Percentage of share capital |
| |||
Of which shares acquired with the intention to cancel them | |
| | |
Of which shares allocated to TotalEnergies share performance plans for Company employees |
| |
| |
Of which shares intended to be allocated to new share performance or purchase options plans |
| | |
Dividend
The Shareholder’s Meeting of May 26, 2023 approved the distribution of an ordinary dividend at €
Ordinary dividend 2022 |
| First interim |
| Second interim |
| Third interim |
| Final |
Amount | € | € | € | € | ||||
Set date | April 27, 2022 | July 27, 2022 | October 26, 2022 | May 26, 2023 | ||||
Ex-dividend date | September 21, 2022 | January 2, 2023 | March 22, 2023 | June 21, 2023 | ||||
Payment date | October 3, 2022 | January 12, 2023 | April 3, 2023 | July 3, 2023 |
Special interim dividend 2022
Amount per share |
| € |
Ex-dividend date | December 6, 2022 | |
Payment date | December 16, 2022 |
The Board of Directors, during its April 26, 2023 meeting, set the first interim dividend for the fiscal year 2023 at €
Furthermore, the Board of Directors, during its July 26, 2023 meeting, set the second interim dividend for the fiscal year 2023 at €
Dividend 2023 |
| First interim |
| Second interim |
Amount | € | € | ||
Set date | April 26, 2023 | July 26, 2023 | ||
Ex-dividend date | September 20, 2023 | January 2, 2024 | ||
Payment date | October 2, 2023 | January 12, 2024 |
Earnings per share in Euro
Earnings per share in Euro, calculated from the earnings per share in U.S. dollars converted at the average Euro/USD exchange rate for the period, amounted to €
Earnings per share are calculated after remuneration of perpetual subordinated notes.
54
Perpetual subordinated notes
TotalEnergies SE has not issued any perpetual subordinated notes during the first six months of 2023.
TotalEnergies SE fully reimbursed the nominal amount of €
Other comprehensive income
Detail of other comprehensive income is presented in the table below:
(M$) |
| 1st half 2023 |
| 1st half 2022 |
Actuarial gains and losses |
| |
| |
Change in fair value of investments in equity instruments |
| |
| ( |
Tax effect |
| ( |
| ( |
Currency translation adjustment generated by the parent company |
| |
| ( |
Sub-total items not potentially reclassifiable to profit and loss |
| |
| ( |
Currency translation adjustment |
| ( |
| |
- unrealized gain/(loss) of the period |
| ( |
| |
- less gain/(loss) included in net income |
| ( |
| ( |
Cash flow hedge |
| |
| |
- unrealized gain/(loss) of the period |
| |
| |
- less gain/(loss) included in net income |
| ( |
| ( |
Variation of foreign currency basis spread |
| |
| |
- unrealized gain/(loss) of the period |
| ( |
| |
- less gain/(loss) included in net income |
| ( |
| ( |
Share of other comprehensive income of equity affiliates, net amount |
| ( |
| |
- unrealized gain/(loss) of the period |
| ( |
| |
- less gain/(loss) included in net income |
| |
| ( |
Other |
| ( |
| ( |
Tax effect |
| ( |
| ( |
Sub-total items potentially reclassifiable to profit and loss |
| |
| |
Total other comprehensive income (net amount) |
| |
| |
55
Tax effects relating to each component of other comprehensive income are as follows:
1st half 2023 | 1st half 2022 | |||||||||||||
Pre-tax | Pre-tax |
| ||||||||||||
(M$) |
| amount |
| Tax effect |
| Net amount |
|
| amount |
| Tax effect |
| Net amount | |
Actuarial gains and losses | | ( | | | ( | | ||||||||
Change in fair value of investments in equity instruments | | ( | | ( | | ( | ||||||||
Currency translation adjustment generated by the parent company | | - | | ( | - | ( | ||||||||
Sub-total items not potentially reclassifiable to profit and loss | | ( | | ( | ( | ( | ||||||||
Currency translation adjustment | ( | - | ( | | - | | ||||||||
Cash flow hedge | | ( | | | ( | | ||||||||
Variation of foreign currency basis spread | | ( | | | ( | | ||||||||
Share of other comprehensive income of equity affiliates, net amount | ( | - | ( | | - | | ||||||||
Other | ( | - | ( | ( | - | ( | ||||||||
Sub-total items potentially reclassifiable to profit and loss | | ( | | | ( | | ||||||||
Total other comprehensive income | | ( | | | ( | | ||||||||
5) Financial debt
The Company has not issued any new senior bond during the first six months of 2023.
The Company reimbursed two senior bonds during the first six months of 2023:
- | Bond |
- | Bond |
In addition, the $
6) Related parties
The related parties are mainly equity affiliates and non-consolidated investments.
There were no major changes concerning transactions with related parties during the first six months of 2023.
56
7) Other risks and contingent liabilities
TotalEnergies is not currently aware of any exceptional event, dispute, risks or contingent liabilities that could have a material impact on the assets and liabilities, results, financial position or operations of the TotalEnergies, other than those mentioned below.
Yemen
In Yemen, the deterioration of security conditions in the vicinity of the Balhaf site caused the company Yemen LNG, in which TotalEnergies holds a stake of
Mozambique
Considering the evolution of the security situation in the north of the Cabo Delgado province in Mozambique, TotalEnergies has confirmed on April 26, 2021, the withdrawal of all Mozambique LNG project personnel from the Afungi site. This situation led TotalEnergies, as operator of Mozambique LNG project, to declare force majeure.
Disputes relating to Climate
In France, the Corporation was summoned in January 2020 before Nanterre’s Court of Justice by certain associations and local communities in order to oblige the Company to complete its Vigilance Plan, by identifying in detail risks relating to a global warming above 1.5°C, as well as indicating the expected amount of future greenhouse gas emissions related to the Company’s activities and its product utilization by third parties and in order to obtain an injunction ordering the Corporation to immediately cease exploration and exploitation of new oil or gas fields, to reduce its oil and gas production by 2030 and 2050, and to reduce its net direct and indirect CO2 emissions by
Several associations in France brought a civil action against TotalEnergies and TotalEnergies Gaz et Electricité France before the Paris judicial court, with the aim of proving that since May 2021 – after the change of name of TotalEnergies – the Company’s corporate communication and its publicity campaign contain environmental claims that are either false or misleading for the consumer. TotalEnergies considers that these accusations are unfounded.
In France, on July 4, 2023,
In the United States, US subsidiaries of TotalEnergies (TotalEnergies EP USA, Inc. and TotalEnergies Marketing USA, Inc.) were summoned, amongst many companies and professional associations, in a number of "climate litigation" cases, seeking to establish legal liability for past greenhouse gas emissions, and to compensate plaintiff public authorities, in particular for adaptation costs. The Corporation was summoned, along with
57
8) Subsequent events
On June 30, 2023, TotalEnergies held an interest of
On June 29, 2023, the Company exercised the option it had to acquire all the shares of these two companies, exercisable over a period of 3 months between April 1, 2023 and June 30, 2023.
The acquisition of the shares was finalized on July 24, 2023 for a net investment of around
58
Exhibit 99.2
RECENT DEVELOPMENTS
The term “TotalEnergies” or the “Company” in this exhibit is used to designate TotalEnergies SE and the consolidated entities that are directly or indirectly controlled by TotalEnergies SE. The entities in which TotalEnergies SE directly or indirectly owns a shareholding are separate and independent legal entities.
TotalEnergies announces the second interim dividend of €0.74/share for fiscal year 2023, an increase of 7.25%, compared to 2022
On July 27, 2023, TotalEnergies announced that the Board of Directors, meeting on July 26, 2023 under the chairmanship of Mr. Patrick Pouyanné, Chairman and Chief Executive Officer, decided the distribution of the second 2023 interim dividend of 0.74 €/share, an increase of 7.25% compared to the three interim dividends paid for fiscal year 2022 and identical to the final ordinary dividend for fiscal year 2022 and to the first 2023 interim. This increase is in line with the shareholder return policy confirmed by the Board of Directors in February 2023 and reiterated at the Annual General Meeting of May 26, 2023.
This interim dividend will be paid in cash exclusively, according to the following timetable:
|
| Shareholders |
| ADS holders |
|
| | | | | |
Ex-dividend date | | January 2, 2024 | | December 28, 2023 | |
| | | | | |
Payment date | | January 12, 2024 | | January 25, 2024 | |
Electricity: TotalEnergies Fully Acquires Total Eren After a Successful Strategic Alliance of Five Years
On July 25, 2023, TotalEnergies announced that it is pursuing its profitable growth in the renewable energy sector by buying out Total Eren’s other shareholders, increasing its stake from close to 30% to 100%. The Total Eren teams are expected to be fully integrated within TotalEnergies’ Renewables business unit. The deal follows the strategic agreement signed between TotalEnergies and Total Eren in 2017, which granted TotalEnergies the right to acquire all of Total Eren (formerly EREN RE) after a five-year period.
As part of this transaction, Total Eren is valued at an Enterprise Value of €3.8 billion based on an attractive EBITDA multiple negotiated in the initial strategic agreement signed in 2017. The acquisition of 70.8% (on a fully-diluted basis) represents a net investment of around €1.5 billion for TotalEnergies.
Total Eren’s integration should result in an increase in TotalEnergies’ Integrated Power Net Operating Income of around €160 million and CFFO of around €400 million in 2024.
A global player with a 3.5 GW renewables production and a 10 GW pipeline
Total Eren has 3.5 GW of renewable capacity in operation worldwide and a solar, wind, hydroelectric and storage projects pipeline of over 10 GW in 30 countries, of which 1.2 GW are in construction or late-stage development. TotalEnergies plans to leverage Total Eren’s 2 GW assets in operation in merchant countries (notably Portugal, Greece, Australia, and Brazil) to build up its integrated power strategy. TotalEnergies also aims to benefit from Total Eren’s footprint and ability to develop projects in other countries such as India, Argentina, Kazakhstan, or Uzbekistan.
A complementary fit with TotalEnergies’ footprint and workforce
Total Eren will not only contribute high-quality operated assets, but also the expertise and skills of nearly 500 people based in more than 20 countries. Total Eren’s successful organic growth testifies to the expertise that its teams have built up internally and in connection with partners and suppliers since its creation in 2012. The teams and the quality of Total Eren’s portfolio is expected to strengthen TotalEnergies’ ability to deliver production growth while optimizing its operating costs and capex by leveraging its size and purchasing bargaining power.
A pioneer in green hydrogen
Further to its activities as a renewable energy producer, Total Eren has launched pioneering green hydrogen projects in recent years, located in various regions, such as North Africa, Latin America, and
Australia. These green hydrogen activities are expected to be pursued through a new partnership in an entity named “TEH2” (80% owned by TotalEnergies and 20% owned by EREN Group).
Turkey: TotalEnergies partners with Rönesans Holding with the aim of developing renewable energy in the country
On July 24, 2023, TotalEnergies signed an agreement with Rönesans Holding to acquire a 50% stake in Rönesans Enerji and jointly develop, through this joint-venture, renewable projects in Turkey, which is a liberalized growing electricity market. Rönesans Enerji is currently operating a portfolio of approximately 166 MW hydro assets. The company has also secured a pipeline of more than 700 MW of wind, photovoltaic, and battery storage assets. Leveraging TotalEnergies’ knowhow in onshore wind and solar development and in electricity trading and Rönesans’ deep knowledge of the local electricity market, Rönesans Enerji’s ambition is to produce 2 GW of renewable energy by 2028. The production generated by these sites is expected to be marketed primarily with direct sales in the electricity market or power purchase agreements (PPAs) with end-buyers. These projects, which aim to be cost-competitive given the quality of Turkey's renewable potential, are in line with the Company's strategy of becoming an integrated player in the electricity market, taking advantage of price volatility, and are expected to contribute to the achievement of the Integrated Power Business Unit's double-digit profitability targets. The transaction is subject to regulatory and administrative approvals.
TotalEnergies, Aramco and SABIC complete one of the MENA region’s first processing of oil from plastic waste at scale to make certified circular polymers
On July 17, 2023, TotalEnergies, Aramco and SABIC have for the first time in the Middle East and North Africa successfully converted oil derived from plastic waste into ISCC+ certified circular polymers. The plastic pyrolysis oil, also called plastic waste derived oil (PDO), was processed at the SATORP refinery jointly owned by Aramco and TotalEnergies, in Jubail, Saudi Arabia. It was then used as a feedstock by Petrokemya, a SABIC affiliate, to produce certified circular polymers.
The project aims to pave the way for the creation of a domestic value chain for the advanced recycling of plastics to circular polymers in the Kingdom of Saudi Arabia. The process allows for the use of non-sorted plastics, which can be difficult to recycle mechanically, and consequently contributes to solving the challenge of end-of-life plastics.
A first milestone for the project was obtaining ISCC+ certification to assure transparency and traceability of the recycled origin of feedstock and products. Three industrial plants were involved in the process: SATORP refinery, Aramco’s Ju'aymah NGL Fractionation Plant and Petrokemya. All successfully obtained the ISCC+ certification, enabling the production of circular materials.
SABIC and TotalEnergies are founding members of the non-profit organization Alliance to End Plastic Waste (AEPW), which aims to bring collective knowledge, resources and experience to address current waste management challenges.
United States: TotalEnergies and its Partners Make the Final Investment Decision of the RGLNG Project in Texas
On July 13, 2023, TotalEnergies, Global Infrastructure Partners (GIP) NextDecade Corporation, and their partners, GIC and Mubadala, made the final investment decision (FID) to develop phase one of Rio Grande LNG (RGLNG), a natural gas liquefaction (LNG) project in South Texas.
This first phase comprises three liquefaction trains with an estimated total capacity of 17.5 million tons per annum (Mtpa) and CAPEX of $14.8 billion. The engineering, procurement, and construction (EPC) contract has been awarded to Bechtel, and commissioning of the plant is scheduled for 2027. The project is expected to be financed by equity contributions from the partners and by a debt contribution concluded on July 13, 2023 with a consortium of international banks.
As a result of this decision, and according to the terms of the agreement signed in June, 2023, TotalEnergies:
| ● | is expected to acquire a 16.67% stake in the joint-venture in charge of this first phase, and commits to participating in its equity contributions, for a total amount of $1.1 billion. |
| ● | is expected to hold a total 17.5% stake in NextDecade for a total amount of $219 million. A first tranche of 5.06% was acquired last June, and a second tranche is expected to be acquired in the next few days to increase this stake to 12.47% and a third tranche of 5.03 % is expected to be acquired before the end of the year. |
| ● | TotalEnergies is also expected to offtake 5.4 Mtpa of LNG from the production of this phase for 20 years. |
TotalEnergies Wins Two Maritime Leases to Develop two Giga Offshore Wind Farms in Germany
On July 12, 2023, TotalEnergies has been awarded by the Bundesnetzagentur (German Federal Network Agency) two marine concessions, N-12.1 and O-2.2, at the end of the auction held in Germany.
Located in the North Sea, 170 kilometers off the coast, concession N-12.1 covers an area of around 200 square kilometers. Located in the Baltic Sea 40 kilometers from the coast, concession O-2.2 has a surface area of around 100 square kilometers.
Green electricity for over 3 million households
The concessions are forecasted to run for a term of 25 years, extendable to 35 years. With capacities of 2 GW and 1 GW respectively, these two wind farms are expected to provide a volume of electricity equivalent to the consumption of over 3,000,000 homes. Following these awards, TotalEnergies will pay the German Federal government an estimated 582 million euros, which aims to be allocated to the conservation of the marine environment and the promotion of environmentally friendly fishing. An annual contribution is also expected to be paid to the electricity transmission system operators in charge of connecting the projects for 20 years from the date of the commissioning of the sites.
The production generated by these sites are expected to be marketed by TotalEnergies, either by selling it directly on the electricity market, or by entering into Power Purchase Agreements (PPAs) with end-buyers, enabling them to reduce their carbon footprint. These projects, which are deemed to be cost-competitive given the quality of the sites, are in line with the Company's strategy of becoming an integrated player in the electricity markets, taking advantage of price volatility. They are expected to contribute to the Integrated Power Business Unit’s objective of reaching a two-digit profitability.
Commissioning by 2030
TotalEnergies believes that these major projects are in line with the German government's objective of deploying 30 GW of offshore wind power in Germany by 2030. The next step for TotalEnergies will be to carry out the studies required to obtain the environmental permits, as well as the technical analyses on these sites, which should lead to investment decisions in 2027 and commissioning by 2030.
TotalEnergies Announces Start of Production in the Absheron Gas Field in Azerbaijan
On July 10, 2023, TotalEnergies and its partner SOCAR (State Oil Company of the Republic of Azerbaijan) announce the start of production of the first phase of development of the Absheron gas and condensate field in the Caspian Sea, around 100 km south-east of Baku.
This first phase connects a subsea production well to a new gas processing platform, itself linked to SOCAR’s existing facilities in Oil Rocks. It has an estimated production capacity of 4 million cubic meters of gas per day and 12,000 barrels a day of condensate. The gas is expected to be sold on the domestic market in Azerbaijan.
The development of the Absheron field aims to provide an additional gas supply to meet growing demand, at an expected competitive technical cost and low greenhouse gas emissions intensity, in line with TotalEnergies’ strategy.
TotalEnergies and SOCAR both hold a 50% interest in the project, which is operated by the joint company JOCAP (Joint Operating Company of Absheron Petroleum).
Algeria: TotalEnergies Strengthens its Gas Partnership with Sonatrach and Extends it to Renewables
On July 10, 2023, during a meeting held in Algiers between Patrick Pouyanné, Chairman and CEO of TotalEnergies, and Toufik Hakkar, Chief Executive Officer of Sonatrach, a series of agreements were signed to strengthen the cooperation between the two companies in the production of natural gas in Algeria, the delivery of liquefied natural gas (LNG) to Europe, and the development of renewables in Algeria.
1. | Natural gas: increased production at the Tin Fouyé Tabankort fields |
Under a first agreement, which remains subject to the approval of the Algerian authorities, Sonatrach and TotalEnergies have agreed to convert the production contracts for the Tin Fouyé Tabankort II (TFTII) and Tin Fouyé Tabankort Sud (TFT sud) fields in southern Algeria (Sonatrach 51%, TotalEnergies 49%) to the framework established by the new Algerian Petroleum Law enacted on December 11, 2019. These are the first conversions of contracts in Algeria under the regime of the new Petroleum Law.
In this context, Sonatrach and TotalEnergies aim to pursue the investment program already launched to increase the gas production of TFTII and TFT South, which includes the upgrade of existing facilities and the drilling of additional wells. The combined production of the two fields is expected to exceed 100,000 boe (barrel of oil equivalent) per day by 2026, versus a level of around 60,000 boe per day in 2022, thus increasing the potential export of Algerian gas to the European market.
2.European energy security: additional LNG deliveries
Under a second agreement, Sonatrach and TotalEnergies have extended for the year 2024 deliveries by Sonatrach of 2 million tons per year of LNG to TotalEnergies at the port of Fos-Cavaou, near Marseille, France. These deliveries of Algerian LNG by sea contribute directly to energy security in France and Europe.
3.Energy transition: developing renewables in Algeria
TotalEnergies and Sonatrach have also signed a third deal to examine the development of projects to produce renewable energy in Algeria, specifically:
| ● | Renewables projects to solarize exploration and production sites for oil and gas, and to power seawater desalination plants; |
| ● | A project to produce renewable, low carbon hydrogen for the export market; |
| ● | An R&D program in low carbon energies and the energy transition. |
INEOS and TotalEnergies Further Integrate their Petrochemical Assets in Eastern France
On July 5, 2023, TotalEnergies and INEOS signed agreements to realign their respective stakes in their production assets and logistics infrastructure to better reflect the balance between their production and internal use of ethylene in eastern France. For TotalEnergies, this exchange of interests supports the integration between its petrochemical sites at Feyzin, near Lyon, and Carling in eastern France, while INEOS strengthens its operations at the Lavéra site on the Mediterranean coast.
Realigning the two companies’ interests to improve integration
The companies’ sites that produce and use ethylene in eastern France are connected by a pipeline and storage network that begins at Lavéra in south-eastern France and passes through Feyzin to Carling in the north-east.
However, TotalEnergies does not itself use its share of production from the Lavéra steam cracker, which is equally (50/50) owned with INEOS, and sells it mainly to INEOS.
In order to realign the companies’ production and internal use of ethylene, TotalEnergies is therefore expected to sell its stake in the Lavéra assets to INEOS, in addition to part of its interests in the Eastern France ethylene pipeline and storage network, which TotalEnergies aims to continue operating.
TotalEnergies reaffirms the key role of the Feyzin petrochemical platform
Within TotalEnergies, the Company is thus consolidating the key role of the Feyzin petrochemical platform as the integrated supplier of ethylene to the Carling platform.
The agreement is expected to have no operational impact on TotalEnergies’ refining and petrochemical sites.
The implementation of this project is subject to the prior consultation process of employee representatives and the approval from the relevant authorities.
Energy transition & Renewables: TotalEnergies partners with Petronas in Asia-Pacific
On June 26, 2023, TotalEnergies announces the signature of a Strategic Collaboration Agreement with Gentari Renewables Sdn Bhd, the clean energy solutions company of Petronas, to develop renewable energy projects in the Asia Pacific region. Already collaborating in the upstream sector in eight countries around the world, this agreement further strengthens TotalEnergies’ partnership with Petronas in the energy transition.
This agreement was signed on the sidelines of the Energy Asia Conference in Kuala Lumpur by Julien Pouget, Senior Vice President Asia Pacific for Exploration & Production and Renewables, and Sushil Purohit, Chief Executive Officer of Gentari, in the presence of Patrick Pouyanné, Chairman and CEO of TotalEnergies and Tan Sri Tengku Muhammad Taufik, Gentari Chairman as well as Petronas President and Group CEO.
Under this agreement, TotalEnergies and Gentari aim to jointly develop the 100MW Pleasant Hills Solar Project in Queensland, Australia, to supply low-carbon electricity to the Roma field’s gas production and processing facilities. TotalEnergies and Gentari’s parent company, Petronas, each hold a 27.5% stake in Gladstone LNG.
TotalEnergies partners with Petronas and Mitsui on a Carbon Storage hub in Malaysia
On June 26, 2023, TotalEnergies announces the signature of an agreement with Petronas and Mitsui to develop a carbon storage project in Southeast Asia. The partners aim to evaluate several CO2 storage sites in the Malay Basin, including both saline aquifers and depleted offshore fields. This partnership aims to develop a CO2 merchant storage service to decarbonize industrial customers in Asia.
This agreement was signed by Patrick Pouyanné, Chairman and CEO of TotalEnergies, Tan Sri Tengku Muhammad Taufik, President and Group CEO of Petronas, and Toru Matsui, Senior Executive Managing Officer of Mitsui & Co., on the opening day of the inaugural Energy Asia event in Kuala Lumpur.
In Asia, where countries such as South Korea and Japan have pledged for Net Zero Commitment in 2050, the development of a Carbon Capture and Storage (CCS) value chain for hard-to-abate industrial emissions will require a specific regulatory framework and significant investment. Through this agreement, the partnership aims to study several potential storage sites, determine the best technical means to deliver CO2 to Malaysia from industrial clusters in the region and develop the most appropriate business framework for commercialization of a carbon storage service in Malaysia.
Aramco and TotalEnergies award contracts for $11 billion Amiral project
On June 24, 2023, Aramco and TotalEnergies awarded Engineering, Procurement and Construction (EPC) contracts for the $11 billion "Amiral" complex, a future world scale petrochemicals facility expansion at the SATORP refinery in the Kingdom of Saudi Arabia. A signing ceremony took place in Dhahran attended by Amin H. Nasser, Aramco President and CEO, and Patrick Pouyanné, TotalEnergies Chairman and CEO.
The award of EPC contracts for main process units and associated utilities marks the start of construction work on this joint project, following the final investment decision in December 2022. Integrated with the SATORP existing refinery in Jubail, the new petrochemical complex is expected to house one of the largest mixed-load steam crackers in the Gulf, with a capacity to produce 1.65 million tons of ethylene and other industrial gases per year.
This expansion is expected to attract more than $4 billion in additional investment in a variety of industrial sectors (carbon fibers, lubes, drilling fluids, detergents, food additives, automotive parts and tires) and create around 7,000 direct and indirect jobs in the country.
The EPC contracts were awarded to:
| ● | Hyundai Engineering & Construction Co., Ltd. – for a mixed feed cracker and utilities, with a nameplate capacity of 1,650 kta of ethylene and related industrial gases, and utilities, flares and interconnecting systems that support main packages within the facilities. |
| ● | Maire Tecnimont – for two polyethylene units using Advanced Dual Loop technology, with a nameplate capacity of 500 kta each, and the derivative units. |
| ● | Sinopec Engineering Group Saudi Co., Ltd. – for Tank Farm and SATORP integration. |
| ● | Gulf Consolidated Contractors Co. – for the transfer pipelines. |
| ● | Mohammed Ali Al-Suwailem Trading and Contracting Co. – for industrial support facilities. |
| ● | Mofarreh Marzouq Al Harbi and Partners Co. Ltd. – for site preparation. |
| ● | Mobarak M. AlSalomi and Partners for Contracting Co. – for temporary construction facilities. |
Germany: TotalEnergies and VNG join Forces on Green Hydrogen to Decarbonize the Leuna Refinery
On June 21, 2023, TotalEnergies and VNG, a German natural gas distribution company, have signed an agreement to initiate the expected future supply of green hydrogen to the Leuna refinery operated by TotalEnergies. Under the agreement, TotalEnergies and VNG aim to produce green hydrogen from renewable electricity with a 30 MW electrolyzer in Bad Lauchstädt, built and operated by VNG with its partner Uniper.
This agreement contributes to the decarbonization of the Leuna refinery and will reduce the site's annual CO2 emissions by up to 80,000 tons by 2030.
Furthermore, the pipeline connection to the Bad Lauchstädt Energy Park (Energiepark Bad Lauchstädt (EBL) is a consortium to develop a green Hydrogen Hub composed of different subprojects such as renewable power generation (wind 50MWpower), H2 production, transportation H2 and storage H2) is expected to give the Leuna refinery access to the future European hydrogen infrastructure and the international markets for green hydrogen.
Decarbonizing Industry in France: TotalEnergies to Supply Certified Sustainable Biomethane to Saint-Gobain
On June 20, 2023, TotalEnergies has signed a 100 GW biomethane purchase agreement with Saint-Gobain France for a three-year period starting in 2024.
The biomethane is expected to be produced by TotalEnergies at its BioBéarn biomethane plant, which came on stream at the beginning of the year and whose production is certified sustainable by ISCC (International Sustainability & Carbon Certification) under the highest sustainability criteria of the European Union REDII Directive. TotalEnergies is one of the very first producers to obtain this certification in France.
By acquiring the Guarantees of Origin, and thanks to their sustainable certification, Saint-Gobain is expected to be able to attest, within the framework of the EU Emissions Trading Scheme, to the decarbonization of its energy consumption in France. This contract is also an example of a purely commercial sale, i.e., non-subsidized, of biomethane.
Paris Air Show: TotalEnergies Committed to the Production of Sustainable Aviation Fuel to Meet Its Aviation Customers' Needs
On June 19, 2023, TotalEnergies continued actively responding to a call from its aviation customers to increase production of sustainable aviation fuel (SAF). As of 2028, the Company expects to be in a position to produce half a million tons of SAF, enough to cover the gradual increase in the European SAF blending mandate, set at 6% for 2030.
To this end, TotalEnergies is investing and has launched multiple SAF production projects. These include:
| ● | Grandpuits – TotalEnergies is investing €400 million to convert the site into a zero-crude platform, primarily focused on producing SAF from circular feedstock such as animal fat and used cooking oil. Grandpuits aims to produce 210,000 tons/y of SAF as of 2025, and a new investment has been announced to produce an expected further 75,000 tons/y by 2027. |
| ● | Normandy – TotalEnergies has started coprocessing SAF from used cooking oil at its Gonfreville refinery. The Company plans to increase annual production at the site to 40,000 tons as of 2025. In addition, following technical work carried out with its aeronautical partners, TotalEnergies aims to produce an additional 150,000 tons/y of SAF by coprocessing HVO biodiesel produced at La Mède as soon as this production method is approved by the ASTM (ASTM International drafts and produces technical standards for materials, products, systems and services). |
| ● | La Mède – TotalEnergies has invested €340 million to convert its refinery into a biorefinery. Biodiesel produced at La Mède is already being used to make SAF at the TotalEnergies Oudalle plant near Le Havre. TotalEnergies is studying a new investment to have the capacity to process at La Mède, by 2024, 100% waste from the circular economy (used cooking oil and animal fat) to produce biofuels and SAF by coprocessing. |
Beyond France, TotalEnergies aims to produce 1.5 million tons/y of SAF by 2030 at production units in Europe, the United States, Japan and South Korea, representing 10% of the world market by that date.
United States: TotalEnergies Strengthens its Position in LNG by Partnering with GIP and NextDecade on a new LNG project in Texas
On June 14, 2023, TotalEnergies has signed a framework agreement with the US company NextDecade to participate in the development of the Rio Grande LNG (RGLNG) project, a liquefied natural gas (LNG) plant located in South Texas. Under the terms of the agreement, and subject to execution of definitive documentation and final investment decision:
| ● | TotalEnergies shall hold a 16.7% interest in the first phase of the project, which consists of three liquefaction trains with total annual capacity of 17.5 million tons per annum (Mtpa). |
| ● | TotalEnergies shall offtake 5.4 Mtpa of LNG from this first phase for twenty years, which brings the Company’s US LNG export capacity to more than 15 Mtpa by 2030. |
| ● | TotalEnergies shall acquire a 17.5% interest in NextDecade in three tranches for a global amount of $219 million – the first tranche of 5.06% having already been acquired on June 13, 2023, for $40 million. |
| ● | TotalEnergies shall also have a right to participate in further phases of the project and in a carbon capture and storage project (CCS) planned by NextDecade to reduce the emissions generated by the project. |
The first phase of RGLNG, whose final investment decision is expected in the coming weeks for start-up in 2027, is expected to be developed, besides TotalEnergies, by NextDecade as shareholder and operator and Global Infrastructure Partners (GIP) as majority shareholder. The project has already received all the necessary authorizations from FERC, the US Federal Energy Regulatory Commission.
Nigeria: TotalEnergies makes oil and gas discovery in offshore OML 102
On June 13, 2023, TotalEnergies announces the Ntokon oil and gas discovery on OML102 offshore Nigeria.
Located in shallow waters, 60 km off the southeast coast of Nigeria, the Ntokon-1AX discovery well encountered 38 meters of net oil pay and 15 meters of net gas pay, while its side-track Ntokon-1G1 encountered 73 meters of net oil pay, in well-developed and excellent quality reservoirs. Ntokon-1G1 tested successfully up to a maximum rate of about 5,000 barrels per day of 40° API oil.
Located 20 km from the Ofon field facilities on OML102, Ntokon is planned to be developed through a tie-back to these existing facilities.
OML 102 is operated by TotalEnergies EP Nigeria with a 40% interest, alongside partner NNPC Ltd with the remaining 60%.
Kazakhstan: TotalEnergies signs a 25-year PPA for a 1 GW Wind Project
On June 9, 2023, TotalEnergies confirms its commitment to the energy transition in Kazakhstan with the signature of a Power Purchase Agreement (PPA) for the Mirny project. This will be one of the first PPAs signed in the country for a wind project of such scale. Located in the Zhambyl region, the project aims to build a 1 GW onshore wind farm combined with a 600 MWh battery energy storage system for a reliable power supply. It represents an investment of about $1.4 billion. After Irak, it is another prime example of TotalEnergies’ ability to leverage its position as a major partner in the upstream sector to speed up the development of renewable energy in oil and gas countries.
The electricity aimed to be produced by the Mirny project is expected to be sold in its entirety to the Financial Settlement Center of Renewable Energy (FSC), a public entity owned by the Government of Kazakhstan, for the supply of the national grid. The project aims to provide electricity to 1 million people.
This agreement has been signed in Astana between Total Eren, an affiliate of TotalEnergies, and the FSC, in the presence of Patrick Pouyanné, Chairman and CEO of TotalEnergies and the Minister of Energy and Mineral Resources of the Republic of Kazakhstan, Almasadam Satkaliyev. TotalEnergies aims to develop the Mirny project in partnership with the National Wealth Fund Samruk-Kazyna and the National Company KazMunayGas, which is each expected to own a 20% stake in the project.
A wind project contributing to Kazakhstan’s renewable push
The Mirny project, which is expected to consist of around 200 turbines, is one of the largest wind energy initiatives ever undertaken in Kazakhstan. Supported, by both the Kazakh and French authorities, the project is expected to be a strong contributor to the Kazakh Government's target of achieving 15% of electricity from renewable sources by 2030. It is anticipated to avoid the emission of approximately 3.5 million tons of CO2 annually over the duration of the PPA signed on June 9, 2023.
A successful renewable track-record for Total Eren in Kazakhstan
Total Eren has a proven track record of renewable energy developments in Kazakhstan. In particular, Total Eren successfully developed, financed, built, and commissioned in 2019 two solar photovoltaic farms, M-KAT and Nomad, with a combined capacity of 128 MWp. These solar farms, located in the Zhambyl and Kyzylorda regions respectively, have been instrumental in diversifying Kazakhstan's energy mix and reducing carbon emissions.
TotalEnergies Steps up Sustainable Aviation Fuel Production at Grandpuits
On June 7, 2023, ahead of the Paris Air Show held in Le Bourget, TotalEnergies is stepping up production of sustainable aviation fuel (SAF) and low carbon energies of its Grandpuits site. These investments reflect the Company’s ambition to develop low carbon energies and the circular economy, and consist of:
| ● | The doubling of SAF production at Grandpuits, bringing the site’s annual production capacity to 285,000 tons, i.e. more than double the capacity announced in 2020. This new investment responds to the gradual increase in minimum SAF shares mandated by the EU, and set at 6% for 2030. |
| ● | The development of low carbon energies at the Grandpuits zero-crude platform, with the construction of a biomethane production unit with annual capacity of 80 gigawatthours (GWh), equivalent to the annual demand of 16,000 people. It is expected to be supplied with organic waste from the biorefinery, and aims to prevent the emission of almost 20,000 tons of CO2 every year. The unit strengthens TotalEnergies’ position as leader in biogas production in France. |
The Company has also noted the decision taken by its partner Corbion not to pursue the bioplastic production project, owing to increased costs. In the light of the new investments announced on June 7, 2023 and others to come, TotalEnergies confirms the maintenance of 250 jobs at the site, in line with the commitments it made in September 2020.
Capital increase reserved for employees of TotalEnergies in 2023
On June 1, 2023, TotalEnergies announces that, in accordance with its policy in favor of employee shareholding, the Board of Directors of TotalEnergies decided, on September 22, 2022, to carry out a capital increase reserved for eligible employees and former employees of TotalEnergies and its French and foreign subsidiaries in which the Company holds directly or indirectly more than 50% (in terms of
capital or voting rights), that are members of the PEG-A Group savings plan, in France and abroad, under the conditions set by the twenty-second resolution at the Shareholders’ Meeting of May 25, 2022.
On April 26, 2023, the Chairman and CEO set (i) the subscription period from April 28 to May 15, 2023 (included) and (ii) the subscription price at 45.60 euros per share, corresponding to the average of the closing prices of the TotalEnergies share on Euronext over the twenty trading sessions preceding the date of this decision, reduced by a 20% discount and rounded off to the highest tenth of a euro.
At the end of this period, 52,602 employees in 94 countries, representing 45.8% of the eligible employees and former employees, subscribed to this capital increase for an amount of 353.9 million euros. These results are on the rise compared to the last two years in terms of participation rate and amount subscribed.
As a result, 8,002,155 new shares will be issued on June 7, 2023. They will carry immediate dividend rights and will be fully assimilated with TotalEnergies shares already listed on Euronext.
Following this issuance, the employee shareholders in TotalEnergies’ share capital, within the meaning of Article L. 225-102 of the French Commercial Code, will represent 7.67% of the Company’s share capital as of June 7, 2023.
Jeanine Wai is appointed Vice President, Investor Relations North America of TotalEnergies
On June 1, 2023, Jeanine Wai is appointed Vice President Investor Relations for North America of TotalEnergies, effective June 1, 2023. She replaces Robert Hammond who elected to retire from the Company.
Jeanine Wai began her career in 2001 with Chevron as a process engineer in Downstream specializing in hydrocracking and base oils. From 2009, she alternatively held corporate, buy-side and sell-side positions, including Oil & Gas financial analysis and M&A at Bechtel, as an Exploration & Production analyst at Nexus Asset Management, and 13 years of Upstream Oil & Gas equity research at JPMorgan, Citi, and most recently as the Senior US Integrated Oil and Exploration & Production analyst at Barclays since 2018.
Jeanine Wai graduated with honors with a B.S. in Chemical Engineering from the University of California, Berkeley and holds an M.B.A. from the MIT Sloan School of Management.
Brazil: TotalEnergies signs Production Sharing Contract for the Agua Marinha offshore block
On May 31, 2023, TotalEnergies and its co-venturers Petrobras, QatarEnergy and PETRONAS Petróleo Brasil Ltda (PPBL) signed the Production Sharing Contract (PSC) for the Agua Marinha block, which was awarded in the Open Acreage under Production Sharing Regime – 1st Cycle held by Brazil’s National Petroleum Agency (ANP) in December 2022.
Agua Marinha is a 1,300 sq.km exploration block located in the pre-salt Campos Basin south of the Marlim Sul field and about 140 km from shore. The work program includes drilling one firm exploration well during the exploration period.
TotalEnergies is expected to participate in the block with a 30% interest, alongside operator Petrobras (30%), QatarEnergy (20%) and PPBL (20%).
United States: TotalEnergies and TES Join Forces to Develop a Large-Scale e-NG Production Unit
On May 31, 2023, TotalEnergies announces that it is joining forces with Tree Energy Solutions (TES) to study and develop a large-scale production unit in the United States for e-natural gas (e-NG), a synthetic gas produced from renewable hydrogen and CO2.
The project, which is expected to produce 100,000 to 200,000 metric tons of e-NG per year, is anticipated to be equally owned by the partners and operated by TotalEnergies. This partnership combines TES’ e-NG know-how with TotalEnergies’ expertise in renewable power generation, large-scale project management and natural gas liquefaction.
The e-NG is expected to be produced in two steps:
| ● | to produce renewable hydrogen, a 1 gigawatt (GW) electrolyzer will be powered by approximately 2 GW of wind and solar energy supplied by TotalEnergies through long-term power purchase agreements (PPAs). |
| ● | this renewable hydrogen will then be combined with biogenic CO2 to obtain the e-NG. |
The resulting e-NG produced is expected to be transported and/or liquefied, then sold like natural gas, using existing infrastructure, and end customers are anticipated to be able to use it without any adaptation to their facilities.
TotalEnergies and TES aim to carry out the preliminary studies and aim to reach a Final Investment Decision (FID) in 2024. The project is expected to benefit from tax credits under the 2022 Inflation Reduction Act (IRA).
Nigeria: TotalEnergies renews the OML130 deep offshore license
On May 29, 2023, TotalEnergies, operator of OML130 in Nigeria, announces the renewal of the production license on this block for 20 years.
Located 150 kilometers off the Nigerian coast, the OML130 block contains the prolific Akpo and Egina fields which came into production in 2009 and 2018 respectively. In 2022, production amounted to 282,000 boe/d: nearly 30% was gas sent to the Nigeria LNG plant, notably contributing to Europe’s energy security. The production start-up from Akpo West, a short-cycle project, is expected by the end of 2023. In addition, OML130 contains the Preowei discovery, to be developed by tie-back to the Egina FPSO.
TotalEnergies Upstream Nigeria Limited operates OML 130 with a 24% interest, in partnership with CNOOC (45%), Sapetro (15%), Prime 130 (16%) and the Nigerian National Petroleum Company Ltd as the concessionaire of the PSC.
TotalEnergies to sell its 50% stake in Surmont oil sands asset to ConocoPhillips following exercise of its preemption right
On May 26, 2023, in connection with the sale by TotalEnergies to Suncor Energy Inc. of the entirety of the shares of TotalEnergies EP Canada Ltd announced on April 27, 2023, ConocoPhillips notified TotalEnergies that it is exercising its preemption right to purchase the 50% interest in the Surmont asset held by TotalEnergies EP Canada Ltd.
TotalEnergies will receive from ConocoPhillips a cash payment upon closing of C$4.03 billion (about US$3 billion) and additional payments that could reach a maximum of C$440 million (about US$325 million) under specific conditions for its 50% non-operated interest in the Surmont asset and associated logistics commitments. Closing, subject to regulatory approval, is expected in the third quarter 2023.
As previously announced, the transaction with Suncor is subject to the waiver of its partner ConocoPhillips’ pre-emptive right. As ConocoPhillips has exercised its preemption right, TotalEnergies will be open to complete a transaction with Suncor regarding the sale of TEPCA’s shares, comprising the Fort Hills working interest, as per the agreed value in the initial SPA.
Ordinary and extraordinary Annual Shareholders’ Meeting of May 26, 2023: Approval of resolutions approved by the Board of Directors; Very broad shareholder support (89%) for the Climate 2023; and Consultative Resolution presented by the Company
On May 26, 2023, the Combined Shareholder’s Meeting of TotalEnergies was held under the chairmanship of Mr. Patrick Pouyanné. The shareholders adopted all the resolutions approved by the Board of Directors, including:
| ● | Approval of the 2022 financial statements and payment of a global dividend of €3.81 per share (ordinary and special dividend) |
| ● | Renewal of the three-year terms as Director of Ms. Marie-Christine Coisne-Roquette and Mr. Mark Cutifani |
| ● | Appointment for a three-year term of Mr. Dierk Paskert and Ms. Anelise Lara as Directors |
| ● | Approval of the components of the compensation paid during 2022 or allocated for that year and the compensation policy applicable in 2023 to the Chairman and Chief Executive Officer |
| ● | Various delegations of competence and financial authorizations granted to the Board of Directors |
| ● | Removal of double voting rights supported by almost all shareholders (>99%) |
In addition, the Shareholder’s Meeting issued a favorable consultative opinion on the Sustainability & Climate - Progress Report 2023, reporting on the progress made in the implementation of the Company's ambition with respect to sustainable development and energy transition towards carbon neutrality and its related targets by 2030 and complementing this ambition. Shareholders thus voted in favor of the consultative resolution proposed by the Board of Directors by a very large majority, with 89% of the votes cast, confirming the vote expressed by the shareholders in 2022 and the Company's strategy. Conversely, the consultative resolution filed by a group of shareholders concerning indirect scope 3 emissions was rejected by 70% of the votes cast, following the Board's recommendation. The Board of Directors will continue its dialogue with all shareholders concerning the Company's climate strategy.
The full results of the votes as well as the presentations made to shareholders will be available on May 31, 2023, on the totalenergies.com website.
Methane Emissions Reduction: TotalEnergies and Colorado State University collaborate to establish a protocol of qualification for methane measurement technologies
On May 24, 2023, as part of its commitment to identify, quantify and reduce methane emissions linked to its operations, TotalEnergies announced that it is partnering with Colorado State University to develop an international protocol for the qualification of methane emissions measurements.
As part of the Global Methane Pledge, the US Department of Energy (DOE) and the European Commission’s Directorate-General for Energy (DG-ENER) recognized the excellence and relevance of the Transverse Anomaly Detection Initiatives (TADI) developed by TotalEnergies’ Pôle d’Etudes et de Recherche de Lacq in France and the Methane Emission Technology Evaluation Center (METEC) of Colorado State University in the US, in order to become world references for the qualification of methane emission quantification technologies.
Such a transatlantic initiative is needed because there few agreements currently exist on how to validate methane emissions measurement methods, which is indispensable to compare reported emissions regardless of technology.
TotalEnergies and Colorado State University aim to collaborate using their platforms for this scientific partnership to:
| ● | develop protocols to certify the accuracy, detection limits, and operational restrictions of the measurement methods used for methane accounting; and |
| ● | develop a method for estimating annual methane measurements from point measurements. |
A clear ambition: Aiming for zero Methane emissions through tangible objectives
The Company already halved its methane emissions at its operated sites between 2010 and 2020 by targeting all sources (reductions in flaring, venting, fugitive emissions, etc.) and introducing stricter design criteria for new facilities.
In line with the Glasgow agreements, the Company is setting new targets for its operated methane emissions for the current decade: reduction from 2020 levels of 50% by 2025 and 80% by 2030. The Company has also undertaken to keep methane intensity below 0.1% across its operated gas facilities.
The Company is also enhancing its reporting as part of OGMP 2.0, the second phase of the United Nations Environment Programme’s Oil & Gas Methane Partnership. OGMP 2.0 outlines a reporting framework that encompasses the entire gas value chain and non-operated scope, including a breakdown of emissions by source, information on inventory methodologies and the use of airborne measurement campaigns. In 2022, TotalEnergies was awarded Gold Standard status. The Company is also a signatory of the Methane Guiding Principles.
Biogas: TotalEnergies acquires a stake in Ductor to jointly develop new projects using its innovative technology
On May 24, 2023, TotalEnergies has acquired a 20% stake in Ductor, a Finland-based start-up that has developed an innovative technology to process high-nitrogen organic waste, such as poultry manure, which is usually difficult to use for biomethane production. By allowing the treatment of new types of input, this technology is expected to help to accelerate the development of the biogas value chain, thus contributing to the energy transition. It is also expected to enable TotalEnergies to seize new market opportunities.
TotalEnergies has also formed a partnership with Ductor to develop and invest in several biomethane production projects, primarily in the United States and Europe. Ductor already has a pipeline of fifteen to twenty projects, some of which are at an advanced stage. The partners are planning to develop an initial facility in Ohio, United States. Under the terms of this joint venture, TotalEnergies aims to market the production of the biomethane, and Ductor the production of the sustainable biofertilizers.
Spain: TotalEnergies Obtains Favorable Environmental Impact Assessment for 3 GW of Solar Projects
| ● | These 48 solar plants are expected to be able to produce more than 6,000 GWh of clean energy per year, enough to meet the annual electricity demand of nearly four million people. |
| ● | These facilities aim to avoid the emission of approximately 50 million tons of CO2 into the atmosphere during their lifetime. |
On 22 May 2023, TotalEnergies has obtained from the Spanish authorities (Ministry of Energy Transition and Autonomous Communities) a favorable Environmental Impact Assessment for an estimated 3 GW of installed capacity.
Large-scale solar projects throughout the country
This favorable result relates to the 48 power plants that TotalEnergies aims to develop in the Madrid region (installed capacity of 1.9 GW), in the Murcia region (more than 350 MW), in Castilla-La Mancha (more than 300 MW), in Andalusia (263 MW) and in Aragon (approximately 150 MW). The first projects are expected to come on stream early 2024.
The plants aim to generate about 6,000 GWh of clean energy per year, enough to meet the annual electricity demand of nearly four million people. They are also expected to avoid the emission into the atmosphere of close to 50 million tons of CO2 during their lifetime.
Socially and environmentally responsible projects
TotalEnergies aims to promote a series of compensatory measures, including bird marking for behavior monitoring, renting 400 additional hectares for conservation efforts, and utilizing 1.5% of plant production for electricity bill discounts for local residents, while providing construction and Operation & Maintenance training to residents in surrounding municipalities.
TotalEnergies is proud to contribute to Spain's goal of obtaining 70% of its electricity from renewable sources by 2030 and 100% by mid-century.
Integrated Power & Renewables: TotalEnergies Launches in Belgium Its Largest Battery Energy Storage Project in Europe
On May 15, 2023, TotalEnergies has launched at its Antwerp refinery (Belgium), a battery farm project for energy storage with an estimated power rating of 25 MW and estimated capacity of 75 MWh, equivalent to the daily consumption of close to 10,000 households.
A First Flagship Energy Storage Project in Belgium
After commissioning four battery parks in France offering total energy storage capacity of 130 MWh, this project aims to be the Company's largest battery installation in Europe. The batteries, 40 Intensium Max High Energy lithium-ion containers, are expected to be supplied by Saft, the battery subsidiary of
TotalEnergies, confirming its position as one of the European leaders in industrial-scale stationary storage with this project.
The installation, which aims to be operational by the end of 2024, aims to help meet the needs of the European and Belgian high-voltage transmission network 24/7 by:
| ● | Smoothing power fluctuations in the national grid on a daily basis, particularly during peak winter periods. |
| ● | Guaranteeing grid security by participating actively in the national grid's reserve services. |
| ● | Allowing more renewable electricity to be integrated into the grid. |
Essential for the Development of Renewable Energies
TotalEnergies is delighted to develop this storage project, which aims to compensate for the intermittency introduced by renewable energies and thus enable their development. Batteries are an effective response to the growing need for grid balancing. They can be deployed quickly, have a limited footprint and high reactivity. As a result, they can help meet the new challenges facing power grids today.
This project, located on the Antwerp refinery site, is expected to benefit from the available land and the site’s grid connection. It is a new step in TotalEnergies' development of battery energy storage systems (BESS) which strengthens the Company's presence across the entire electricity value chain in Belgium (production, storage, supply).
Suriname: TotalEnergies increases its presence and signs Production Sharing Contracts for shallow offshore Blocks 6 and 8
On May 15, 2023, TotalEnergies and its partners have signed Production Sharing Contracts (PSC) on Blocks 6 & 8 with Staatsolie Maatschappij Suriname (Staatsolie), the State-owned oil company of Suriname.
Blocks 6 and 8 were awarded to TotalEnergies in the Suriname Shallow Offshore Bid Round 2020/2021. TotalEnergies will operate the two blocks with a 40% interest, alongside QatarEnergy (20%) and Paradise Oil Company (POC), a subsidiary of Staatsolie (40%).
Located in the southern part of offshore Suriname, close to the border with Guyana and with depths between 30 meters and 50 meters, the shallow water Blocks 6 & 8 are immediately adjacent to the operated Block 58 where several discoveries have been made and appraisal drilling is ongoing.
Plastic Recycling: TotalEnergies Expands Activities in Europe by Acquiring Iber Resinas
On May 9, 2023, TotalEnergies announces that it has acquired Spain-based Iber Resinas, an actor in the mechanical recycling of plastics for sustainable applications. With this transaction, TotalEnergies aims to increase its production of circular polymers in Europe, extend its range of recycled products, and enhance its access to feedstock through Iber Resinas’s network of suppliers.
Combining Recycling Know-How and Polymers Expertise
Iber Resinas recycles plastics (polypropylene, polyethylene, and polystyrene) derived from household and industrial waste in its two plants near Valencia, Spain. The company also has a large network of direct customers to whom it sells its products for the manufacture of automotive parts, packaging, or building materials.
Iber Resinas aims to leverage synergies with TotalEnergies’ operations to develop quality products and will benefit from the Company’s ability to accelerate its growth.
Developing a Circular Economy for Plastics
By reducing the weight of many end-use applications, plastics improve their energy efficiency and reduce their carbon footprint. Moreover, producing them from recycled materials contributes to meeting the challenge of managing their end-of-life. Committed to promoting the circular economy in the use of plastics, TotalEnergies is working on all types of recycling:
| ● | In mechanical recycling, its subsidiary Synova is the French leader in the production of recycled polypropylene for sustainable applications for the automotive and construction industry, with a capacity of 45,000 tons at the end of 2022. In 2022, the Company also announced the construction of a new hybrid production line of approximately 15,000-ton high-performance recycled polypropylene for automotive applications at its Carling – Saint-Avold platform in northeastern France. |
| ● | In advanced recycling, TotalEnergies announced in September 2020 the construction of one of France's first advanced recycling plants at its Grandpuits zero-crude platform southeast of Paris, in partnership with Plastic Energy. In 2022, TotalEnergies signed additional offtake agreements with Plastic Energy and Honeywell for pyrolysis oil to pursue its development in advanced recycling in Europe and the U.S. |
| ● | In bioplastics, TotalEnergies is also a world leader through its joint venture with Corbion, which operates a plant in Thailand producing an estimated 75,000 tons per year of polylactic acid (PLA), a 100% bio-based, recyclable, and biodegradable bioplastic. |
Furthermore, TotalEnergies is a founding member of the Alliance to End Plastic Waste, which brings together around ninety companies, project partners, and supporters committed to implementing solutions to eliminate plastic waste in the environment, particularly in the oceans.
Ordinary and Extraordinary Shareholders’ Meeting on May 26, 2023 Conditions of availability of the preparatory documents
On May 5, 2023, Shareholders are invited to participate at the Ordinary and Extraordinary Shareholders’ Meeting of TotalEnergies which will be held on Friday May 26, 2023, at 10:00 a.m. at the salle Pleyel, 252 rue du Faubourg Saint-Honoré, 75008 Paris.
The Shareholders’ Meeting will be streamed live in full on the website www.totalenergies.com/investors/shareholders-meetings. All useful information relating to this Meeting is regularly updated on this page of the website.
Shareholders may exercise their voting rights before the holding of the Shareholders’ Meeting, either by internet via the secured Votaccess platform, or by returning their postal voting form, or also by giving proxy. The detailed procedures relating to the exercise of the right to vote are specified in the notice of the Shareholders’ Meeting.
The preliminary notice of the Shareholders’ Meeting and the convening notice were published in the French Bulletin des annonces légales obligatoires (BALO) on March 24, 2023 and on May 5, 2023 respectively.
The documents referred to in Article R. 225-83 of the French Commercial Code are made available to Shareholders as from the date of the convening notice for the Meeting in accordance with applicable regulations:
| ● | Shareholders holding registered shares may, up to and including the fifth day prior to the Meeting, request that the Company sends these documents to them free of charge. For shareholders holding bearer shares, the exercise of this right is subject to the provision of a certificate of registration in the accounts of the bearer shares issued by the authorized intermediary; |
| ● | Shareholders may consult these documents at the Company’s registered office, 2 place Jean Millier – La Défense 6 – 92400 Courbevoie, under the conditions provided for by applicable regulations. |
The documents referred to in Article R. 22-10-23 of the French Commercial Code may be consulted and downloaded on the Company’s website: totalenergies.com/Investors/Annual Shareholders’ meeting/The documents of the Meeting.
Angola: A New Milestone Towards the Development of Blocks 20 and 21
On May 2, 2023, Agência Nacional de Petróleo, Gás e Biocombustíveis (ANPG), TotalEnergies EP Angola and Sonangol Pesquisa e Produção S.A. signed a heads of agreement related to the future development of the Cameia and Golfinho fields, located on Blocks 20 and 21 in the Kwanza basin.
This heads of agreement is an important milestone towards a final investment decision expected in 2023, after partners and authorities’ approval.
This future development project on Blocks 20 and 21, located around 150 km southwest of Luanda, is expected to comprise an FPSO, the seventh for TotalEnergies in Angola, connected to a subsea network. The design of this new project includes electrical generation from a combined cycle turbine and a zero flaring concept, allowing a lower carbon intensity.
TotalEnergies EP Angola Blocks 20-21 (Operator) holds an 80% interest in each block, while Sonangol Pesquisa e Produção S.A holds the remaining 20%.
Annual Shareholders’ Meeting of May 26, 2023 & Climate: TotalEnergies adds to the agenda the advisory resolution submitted by a group of shareholders representing less than 1.4% of the capital and recommends that shareholders reject it
On April 28, 2023, TotalEnergies announced that the Board of Directors, meeting on April 26, 2023 under the chairmanship of Patrick Pouyanné, Chairman and Chief Executive Officer, reviewed the documents related to the Ordinary and Extraordinary Meeting of Shareholders of TotalEnergies and particularly the request from a group of shareholders representing less than 1.4% of the Company's capital to add an advisory resolution to the agenda of the Annual Shareholders' Meeting. The draft resolution calls on the Company to set targets "aligned with the Paris Climate Agreement" for Scope 3 indirect emissions related to the use of energy products sold to its customers.
The proposed resolution does not provide a credible response to the challenges of climate change and would be contrary to the interests of the Company, its shareholders and its customers.
The indirect emissions reported by TotalEnergies under Scope 3 correspond to the direct (Scope 1) emissions of the consumers of these products: the Company's customers, who decide to use the products.
For example, emissions from jet fuel sold by the Company are first recorded in the Scope 1 emissions of the airline that uses the fuel. They are also recorded in the Scope 3 indirect emissions of the aircraft's engine manufacturer, the plane manufacturer, the airport and TotalEnergies. Scope 3 emissions are not cumulative, but overlapping. An absolute reduction target for Scope 3 for a company like TotalEnergies, without reducing the corresponding Scope 1 of energy users, is in reality not relevant in reducing global GHG emissions.
By focusing on indirect emissions of greenhouse gases related to the use of energy products that TotalEnergies sells to its customers (Scope 3), the adoption of this resolution would lead to holding the Company liable for these emissions, whereas the use of these products is the decision of its customers. TotalEnergies does not make airplanes, cars, cement or steel, but rather supplies energy products that are used or converted by other industries to make products and goods. The company therefore cannot be held responsible for the reduction of emissions related to the use of products by its customers.
Obviously, TotalEnergies acts to contribute to the transformation of energy demand and thus to help its customers reduce their Scope 1. Through its multi-energy strategy, TotalEnergies is adapting its offer to provide a wider range of energy products, including decarbonized products, for example by developing sustainable aviation fuels, and supports its customers in their decarbonization plans. But it is the concerted actions of all the players in the energy value chain that can bring a shift in the way energy is used: through public policies aimed at orienting energy consumption, sectoral initiatives of energy-consuming companies, technical and technological developments.
Drastically decreasing TotalEnergies' global Scope 3 emissions in absolute value, without an evolution of the overall structure of energy demand, would lead to a shift of this demand to other suppliers, notably the national oil companies of producing countries. This strategy would have little effect on lowering global greenhouse gas emissions, and therefore little positive impact on climate. The implementation of this strategy would be disadvantageous to shareholders as the Company would have to sell its oil and gas product marketing activities to other operators. The strategy would also be counter-productive for TotalEnergies' customers, for whom the Company must ensure a security of energy supply, while supporting them in their own decarbonization journey.
TotalEnergies has a consistent and effective strategy to be a major player in the energy transition
TotalEnergies' Board of Directors notes that it fully exercises its powers in defining the Company's priorities for the energy transition. For the third year in a row, the Board is consulting shareholders with regard to TotalEnergies' ambition for sustainability and the energy transition. The Sustainability & Climate - 2023 Progress Report, which will be submitted to an advisory vote at the next Annual Shareholders' Meeting, describes the implementation of the Company's strategy and the progress made in 2022 towards achieving its climate objectives for 2030. The report also enhances the Company's climate and sustainability ambition, notably by specifying – as pledged by the Company – the 2025 and 2030 targets for the main climate indicators and making a number of these targets more ambitious:
| ● | Concerning its Scope 1 & 2 emissions over which it has control at its operated facilities, the Company has set a new emissions target in absolute value of below 38 Mt CO2e (Scopes 1 & 2) by 2025 compared to 2015, thanks notably to a $1 billion worldwide energy efficiency program for 2023-2024. The Company has also pledged to reduce these emissions by more than 40% by 2030 compared to 2015, in line with the objectives set by countries committed to carbon neutrality by 2050. As a reminder, the Company has already reduced the Scope 1+2 emissions of its Oil & Gas activities by almost 30% between 2015 and 2022. |
| ● | TotalEnergies has strengthened its objective of lowering the lifecycle carbon intensity of the energy mix sold to its customers from -20% to -25% by 2030 in relation to 2015, and -15% by 2025, thereby contributing to the reduction of its customers' Scope 1 emissions while selling them the energy they need and ensuring security of energy supply. As a reminder, TotalEnergies has already reduced the carbon intensity of its sales by 12% between 2015 and 2022, thanks to the growth in its sales of electricity and gas and the drop in sales of oil products. |
TotalEnergies is thus leading its peers in terms of decarbonizing its energies sales.
The proposed resolution undermines the Company’s good governance
This consultative resolution does not facially infringe on the Board of Directors' powers. However, if adopted, it would introduce some confusion in the governance of the Company since it would lead the Board of Directors to take into account a different strategy from the one it has adopted. Nevertheless, the Board of Directors has decided to add this draft resolution to the agenda of the next Annual Shareholders' Meeting, in the interest of shareholder dialogue, but not to approve it for all of the reasons set out above.
Consequently, the shareholders of TotalEnergies will be invited to vote against the resolution submitted by the above-mentioned group of shareholders and to vote in favor of the resolution relating to the Sustainability & Climate - 2023 Progress Report submitted by the Company.
The documents prepared by the Company for the upcoming Annual Shareholders' Meeting will be available on the Company's website. The notice of meeting for the Ordinary and Extraordinary Meeting of Shareholders of May 26, 2023 which will be held at 10:00 a.m. on Friday, May 26, 2023 at Salle Pleyel, 252 rue du Faubourg Saint-Honoré, 75008 Paris, France, will be published in the BALO legal gazette (Bulletin des Annonces Légales Obligatoires) on May 5, 2023.
TotalEnergies, number 2 in employee share ownership in Europe, launches its annual capital increase reserved for employees
On April 27, 2023, the Board of Directors of TotalEnergies, meeting on April 26, 2023 under the chairmanship of Patrick Pouyanné, Chairman and Chief Executive Officer, confirmed the launch of the capital increased reserved for employees and former employees of the Company for 2023.
On this occasion, the Board welcomed the recent publication of the European Federation of Employee Share Ownership, which shows that TotalEnergies ranks second among European companies for employee share ownership, in terms of the amount of capital held by employees.
The development of employee share ownership is at the heart of TotalEnergies' value share policy as it represents the best way to closely associate employees with its economic performance, strengthen their sense of belonging and align the interests of employees and shareholders. The decision taken in 2015 by the Board of Directors to conduct every year a capital increase reserved for employees with a discount, as opposed to every two years previously, demonstrates this, as does the continuous increase
in the scope of the performance share grant, which now concerns more than 11,000 employees each year worldwide.
As of March 31, 2023, more than 65% of the employees were shareholders and held together 7.4% of the Company's share capital, amounting to 10 billion euros, making them TotalEnergies’ largest group of shareholders. They received as such about 700 million euros in dividends in 2022.
FORWARD-LOOKING STATEMENTS
This document may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, notably with respect to the financial condition, results of operations, business activities and industrial strategy of TotalEnergies. This document may also contain statements regarding the perspectives, objectives, areas of improvement and goals of TotalEnergies, including with respect to climate change and carbon neutrality (net zero emissions). An ambition expresses an outcome desired by TotalEnergies, it being specified that the means to be deployed do not depend solely on TotalEnergies. These forward-looking statements may generally be identified by the use of the future or conditional tense or forward-looking words such as “envisions”, “intends”, “anticipates”, “believes”, “considers”, “plans”, “expects”, “thinks”, “targets”, “aims” or similar terminology. Such forward-looking statements included in this document are based on economic data, estimates and assumptions prepared in a given economic, competitive and regulatory environment and considered to be reasonable by the Group as of the date of this document.
These forward-looking statements are not historical data and should not be interpreted as assurances that the perspectives, objectives or goals announced will be achieved. They may prove to be inaccurate in the future, and may evolve or be modified with a significant difference between the actual results and those initially estimated, due to the uncertainties notably related to the economic, financial, competitive and regulatory environment, or due to the occurrence of risk factors, such as, notably, the price fluctuations in crude oil and natural gas, the evolution of the demand and price of petroleum products, the changes in production results and reserves estimates, the ability to achieve cost reductions and operating efficiencies without unduly disrupting business operations, changes in laws and regulations including those related to the environment and climate, currency fluctuations, as well as economic and political developments, changes in market conditions, loss of market share and changes in consumer preferences, or pandemics such as the COVID-19 pandemic. Additionally, certain financial information is based on estimates particularly in the assessment of the recoverable value of assets and potential impairments of assets relating thereto.
Except for its ongoing obligations to disclose material information as required by applicable securities laws, TotalEnergies does not have any intention or obligation to update forward-looking statements after the distribution of this document, even if new information, future events or other circumstances have made them incorrect or misleading.
For additional factors, you should read the information set forth under “Item 3. -3.1 Risk Factors”, “Item 4. Information on the Company”, “Item 5. Operating and Financial Review and Prospects” and “Item 11. Quantitative and Qualitative Disclosures about Market Risk” in TotalEnergies’ Form 20-F for the year ended December 31, 2022.
Exhibit 99.3
CAPITALIZATION AND INDEBTEDNESS OF TOTALENERGIES
(unaudited)
The following table sets out the unaudited consolidated capitalization and long-term indebtedness, as well as short-term indebtedness, of TotalEnergies SE and the consolidated entities directly or indirectly controlled by TotalEnergies SE (collectively, “TotalEnergies”) as of June 30, 2023, prepared on the basis of IFRS. Currency amounts are expressed in U.S. dollars (“dollars” or “$”) or in euros (“euros” or “€”).
|
| At June 30, |
|
| | 2023 | |
| | (in millions of dollars) | |
Current financial debt, including current portion of non-current financial debt | | | |
Current portion of non-current financial debt | | 7,323 | |
Current financial debt | | 8,219 | |
Current portion of financial instruments for interest rate swaps liabilities | | 298 | |
Other current financial instruments — liabilities | | 145 | |
Financial liabilities directly associated with assets held for sale | | 1,046 | |
Total current financial debt | | 17,031 | |
Non-current financial debt | | 40,427 | |
Non-controlling interests | | 2,770 | |
Shareholders’ equity | | | |
Common shares | | 7,850 | |
Paid-in surplus and retained earnings | | 123,511 | |
Currency translation adjustment | | (12,859) | |
Treasury shares | | (4,820) | |
Total shareholders’ equity — TotalEnergies share | | 113,682 | |
Total capitalization and non-current indebtedness | | 156,879 | |
As of June 30, 2023, TotalEnergies SE had an authorized share capital of 3,541,983,801 ordinary shares with a par value of €2.50 per share, and an issued share capital of 2,498,264,179 ordinary shares, of which 68,505,002 were treasury shares. For more information on the delegations of authority and powers granted to the Board of Directors with respect to share capital increases and authorization for share cancellation, see Exhibit 15.1 (section 4.4.2, chapter 4) to the Annual Report on Form 20-F for the year ended December 31, 2022, filed with the Securities and Exchange Commission on March 24, 2023.
As of June 30, 2023, approximately $7,553 million of TotalEnergies’ non-current financial debt was secured and $32,874 million was unsecured, and all of TotalEnergies’ current financial debt of $17,031 million was unsecured. As of June 30, 2023, TotalEnergies had no outstanding guarantees from third parties relating to its consolidated indebtedness.
For more information about TotalEnergies’ off-balance sheet commitments and contingencies, see Note 13.1 of the Notes to TotalEnergies’ audited Consolidated Financial Statements in its Annual Report on Form 20-F for the year ended December 31, 2022, filed with the Securities and Exchange Commission on March 24, 2023.
Except as disclosed herein, there have been no material changes in the consolidated capitalization, indebtedness and contingent liabilities of TotalEnergies since June 30, 2023.