TIDMTTE
TOTALENERGIES
Financial report
1(st) half 2022
Certification of the person responsible for the half-year
financial report
This translation is a non binding translation into English of
the Chairman and Chief Executive Officer's certification issued in
French, and is provided solely for the convenience of
English-speaking readers.
"I certify, to the best of my knowledge, that the condensed
Consolidated Financial Statements of TotalEnergies SE (the
Corporation) for the first half of 2022 have been prepared in
accordance with the applicable set of accounting standards and give
a fair view of the assets, liabilities, financial position and
profit or loss of the Corporation and all the entities included in
the consolidation, and that the half-year financial report on pages
to herein includes a fair review of the important events that have
occurred during the first six months of the financial year and
their impact on the financial statements, major related parties
transactions and the principal risks and uncertainties for the
remaining six months of the financial year.
The statutory auditors' report on the limited review of the
above-mentioned condensed Consolidated Financial Statements is
included on page of this half-year financial report."
Courbevoie, July 28, 2022
Patrick Pouyanné
Chairman and Chief Executive Officer
Glossary
The terms "TotalEnergies" and "TotalEnergies company" as used in
this document refer to TotalEnergies SE collectively with all of
its direct and indirect consolidated companies located in or
outside of France. The term "Corporation" as used in this document
exclusively refers to TotalEnergies SE, which is the parent company
of TotalEnergies company.
Abbreviations
EUR : euro
$ or dollar : US dollar
ADR : American depositary receipt (evidencing an ADS)
ADS : American depositary share (representing a share of a company)
AMF : Autorité des marchés financiers (French Financial
Markets Authority)
API : American Petroleum Institute
CO(2) : carbon dioxide
DACF : debt adjusted cash flow is defined as operating cash flow
before working capital changes without financial charges
EV : electric vehicle
FLNG : floating liquefied natural gas
FPSO : floating production, storage and offloading
FSRU : floating storage and regasification unit
GHG : greenhouse gas
HSE : health, safety and the environment
IFRS : International Financial Reporting Standards
IPIECA : International Petroleum Industry Environmental Conservation
Association
LNG : liquefied natural gas
LPG : liquefied petroleum gas
NGL : natural gas liquids
NGV : natural gas vehicle
OML : oil mining lease
PPA : Power Purchase Agreement
ROACE : return on average capital employed
ROE : return on equity
SEC : United States Securities and Exchange Commission
VCM : variable cost margin -- Refining Europe This indicator
represents the average margin on variable costs realized by
TotalEnergies' European refining business. It is 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.
Units of measurement
b = barrel(1)
b = billion
Bcm = billion of cubic meters
boe = barrel of oil equivalent
btu = British thermal unit
cf = cubic feet
CO(2) e = CO(2) equivalent
/d = per day
GtCO(2) = billion of CO(2) tons
GW = gigawatt
GWh = gigawatt hour
k = thousand
km = kilometer
m = meter
m(3) = cubic meter(1)
M = million
MW = megawatt
PJ = petajoule
t = (Metric) ton
toe = ton of oil equivalent
TWh = terawatt hour
W = watt
Wac = AC watt
Wp = watt-peak or watt of peak power
/y = per year
Conversion table
1 acre .APPROX. 0.405 hectares
1 b = 42 gallons US .APPROX. 159 liters
1 b/d of crude oil .APPROX. 50 t/y of crude oil
1 km .APPROX. 0.62 miles
1 m(3) .APPROX. 35.3 cf
1 Mt de LNG .APPROX. 48 Bcf of gas
1 Mt/y of LNG .APPROX. 131 Mcf/d of gas
1 t of oil .APPROX. 7.5 b of oil (assuming a specific gravity of 37deg API)
1 boe = 1 b of crude oil .APPROX. 5,378 cf of gas in 2021(2) (5,399 cf in 2020
and 5,395 cf in 2019)
(1) Liquid and gas volumes are reported at international
standard metric conditions (15degC and 1 atm).
(2) Natural gas is converted to barrels of oil equivalent using
a ratio of cubic feet of natural gas per one barrel. This ratio is
based on the actual average equivalent energy content of
TotalEnergies' natural gas reserves during the applicable periods
and is subject to change. The tabular conversion rate is applicable
to TotalEnergies natural gas reserves on a Company-wide basis.
1. HALF YEAR FINANCIAL REPORT
1.1 Highlights since the beginning of 2022(1)
Social and environmental responsibility
-- Statement of principles of conduct for managing its Russian activities
-- Publication of the Sustainability & Climate 2022 Progress Report
presenting the advances made on TotalEnergies' transformation strategy
and the update of its climate ambition
-- Publication of TotalEnergies' first tax transparency report
-- Solidarity measures taken by TotalEnergies in France aimed at reducing
its customers' gas and fuel bills with a discount of 10 cts on each liter
of fuel sold at its service stations and the implementation of a "gas
cheque" of EUR100 for its gas customers in a precarious energy situation
-- Implementation of the responsible withdrawal of TotalEnergies from
Myanmar: transfer of the operatorship to PTTEP by ensuring a fair
transition for key stakeholders, employees and communities
-- Climate Resolution 2022 approved by 89% of shareholders at the Annual
General Meeting of May 25, 2022
-- Launched global campaign to detect and measure methane emissions by drone
-- Fuel price reduction programme until year-end for TotalEnergies' service
stations in France
Renewables and Electricity
-- Acquisition of 50% of Clearway Energy Group, a major player in the United
States, with 7.7 GW of solar and wind assets in operation and a portfolio
of 25 GW in development
Offshore wind:
-- Award of leases to develop offshore wind farms for 3 GW on the east coast
of the United States, off New York and New Jersey, and 2 GW in Scotland
with Green Investment Group (GIG) and RIDG
-- Partnership with KGHM in Poland to participate in the Polish government
tender for the development of offshore wind projects
-- Obtained an offshore concession to develop a 1 GW offshore wind farm off
the U.S. East Coast, off the coast of North Carolina
Solar:
-- Acquisition of SunPower's industrial and commercial solar business in the
United States
-- Creation of a joint venture with Eneos to develop onsite B2B solar
distributed generation across Asia, with a target capacity of 2 GW in the
next 5 years
-- Core Solar: acquisition of a 4 GW pipeline of projects in the United
States
-- Launched TotalEnergies On, TotalEnergies' start-up accelerator program
dedicated to the electricity business, with the selection of the first 10
start-ups
LNG
-- Acquired 6.25% stake in the North Field East LNG project in Qatar with a
capacity of 32 Mt/y
-- Expansion of the strategic alliance with Sempra to develop the Vista
Pacifico LNG project in Mexico and to co-develop several onshore and
offshore renewable projects in North America
-- Launched the FEED for the Cameron LNG extension project in the U.S. with
a capacity of 6.75 Mt/y
-- Launched the FEED for the upstream installations of the Papua LNG project
in Papua New Guinea
-- Signed a 15-year contract for the sale of 600 kt/y of LNG with Hanwha
Energy in South Korea
Upstream
-- Withdrawal from the North Platte deep-water project in the Gulf of Mexico
-- Significant new oil and associated gas discovery at the Krabdagu-1 well
located on Block 58 in Suriname
-- Significant discovery of light oil and associated gas on the Venus
prospect located on Block 2913B in Namibia
-- Started production on the first 180 kb/d FPSO on the Mero field in Brazil
-- Approved the development of the Ballymore field in the U.S. Gulf of
Mexico for a planned 2025 start-up with 75 kb/d of production capacity
-- 25-year license extension Blocks 404a and 208 in the Berkine Basin,
Algeria
-- Agreed to transfer to Zarubezhneft the 20% residual interest in the
Kharyaga oil field in Russia
Downstream and new molecules
-- Started the ethane cracker in Port Arthur, USA
-- Hydrogen: acquired a 25% stake in Adani New Industries Limited (ANIL) for
the production of green hydrogen in India
Sustainable aviation fuel:
-- Start of sustainable aviation fuel production at the Normandy platform,
in France
-- Collaboration with Eneos to jointly conduct a feasibility study of a
sustainable aviation fuel production unit with 300 kt/y capacity at their
Negishi refinery in Japan
Circular economy:
-- Signature of an agreement with Honeywell to promote the development of
advanced plastic recycling in Europe
-- Commercial agreement with New Hope Energy for the production of polymers
from recycled plastic in the United States
Carbon sinks
-- $50 million contribution in the Tropical Asia Forest Fund 2 to invest in
sustainable forestry projects in Southeast Asia
-- Start-up of the "3D" carbon capture industrial pilot at the ArcelorMittal
site in Dunkirk
-- Acquired a 49% stake in Compagnie des Bois du Gabon to develop natural
carbon sinks
-- Launched a CO2 capture project to decarbonize Cameron LNG's production in
the U.S
(1) Certain transactions referred to in the highlights are
subject to approval by authorities or to conditions as per the
agreements.
1.2 Key figures from TotalEnergies' consolidated financial
statements(1)
In millions of dollars, except effective tax
rate, earnings per share and number of shares 1H22 1H21 1H22 vs 1H21
Adjusted EBITDA(2) 36,161 16,837 x2.1
Adjusted net operating income from business
segments 19,958 7,519 x2.7
Exploration & Production 9,734 4,188 x2.3
Integrated Gas, Renewables & Power 5,606 1,876 x3
Refining & Chemicals 3,880 754 x5.1
Marketing & Services 738 701 +5%
Contribution of equity affiliates to adjusted
net income 3,805 1,260 x3
Effective tax rate(3) 39.0% 34.4%
Adjusted net income (TotalEnergies share) 18,773 6,466 x2.9
Adjusted fully-diluted earnings per share
(dollars)(4) 7.14 2.38 x3
Adjusted fully-diluted earnings per share
(euros)* 6.53 1.97 x3.3
Fully-diluted weighted-average shares (millions) 2,602 2,644 -2%
Net income (TotalEnergies share) 10,636 5,550 +92%
Organic investments(5) 4,800 5,181 -7%
Net acquisitions(6) 2,998 1,986 +51%
Net investments(7) 7,798 7,167 +9%
Operating cash flow before working capital
changes(8) 24,859 11,718 x2.1
Operating cash flow before working capital
changes w/o financial charges (DACF)(9) 25,626 12,511 x2
Cash flow from operations 23,901 13,149 +82%
* Average EUR-$ exchange rate: 1.0934 in the first half 2022 and
1.2053 in the first half 2021.
(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 .
(2) Adjusted EBITDA (Earnings Before Interest, Tax, Depreciation
and Amortization) corresponds 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.
(3) Effective tax rate = (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).
(4) In accordance with IFRS rules, adjusted fully-diluted
earnings per share is calculated from the adjusted net income less
the interest on the perpetual subordinated bond
(5) Organic investments = net investments excluding
acquisitions, asset sales and other operations with non-controlling
interests.
(6) Net acquisitions = acquisitions -- assets sales -- other
transactions with non-controlling interests (see page ).
(7) Net investments = organic investments + net acquisitions
(see page ).
(8) 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 iGRP's contracts and including capital gain from
renewable projects sale. The inventory valuation effect is
explained on page . The reconciliation table for different cash
flow figures is on page .
(9) DACF = debt adjusted cash flow, is defined as operating cash
flow before working capital changes and financial charges.
1.3 Key figures of environment, greenhouse gas emissions and
production
1.3.1 Environment -- liquids and gas price realizations,
refining margins
1H22 1H21 1H22 vs 1H21
Brent ($/b) 107.9 65.0 +66%
Henry Hub ($/Mbtu) 6.1 2.9 x2.1
NBP ($/Mbtu) 27.2 7.7 x3.5
JKM ($/Mbtu) 29.1 10.0 x2.9
Average price of liquids ($/b) Consolidated
subsidiaries 96.3 59.7 +61%
Average price of gas ($/Mbtu) Consolidated
subsidiaries 11.65 4.23 x2.8
Average price of LNG ($/Mbtu) Consolidated
subsidiaries and equity affiliates 13.77 6.33 x2.2
Variable cost margin - Refining Europe, VCM ($/t)* 101.0 7.6 x13.3
* 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).
The average LNG selling price was $13.77/Mbtu in the first half,
more than double the prices over the same period in 2021,
benefiting on a lagged basis from the increase in oil and gas
indexes on long-term contracts as well as high spot gas prices over
these periods.
1.3.2 Greenhouse gas emissions(1)
GHG emissions (MtCO(2) e) 1H22 1H21 1H22 vs 1H21
Scope 1+2 from operated facilities(2) 19.3 17.8* +9%
Scope 1+2 - equity share 27.4 - -
Scope 3 Oil & Gas Worldwide(3) 192* 193* -
of which Scope 3 Oil Worldwide(4) 131* 137* -4%
Scope 1+2+3 in Europe(5) 129* 121* +6%
of which Scope 3 in Europe 117* 111* +6%
Estimated 1H22 emissions. Equity share half year 2021 data is
not available.
* Excluding Covid effect
Methane emissions (ktCH(4) ) 1H22 1H21 1H22 vs 1H21
Methane emissions from operated facilities 20 24 -18%
Methane emissions - equity share 24 - -
Estimated 1H22 emissions. Equity share half year 2021 data is
not available.
The evolution of Scope 1+2 emissions from the operated
facilities is the result of the high-capacity utilization of CCGTs
and refineries in Europe, TotalEnergies responding by increasing
energy output, thus contributing to energy security.
(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 2021 Universal Registration Document) 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 and gas
value chain, i.e., the higher of the two production volumes or
sales to end customers. For TotalEnergies, in 2021 and 2022, the
calculation of Scope 3 GHG emissions for the oil value chain
considers oil products and biofuels sales (higher than production)
and for the gas value chain, gas sales either as LNG or as part of
direct sales to B2B/B2C customers (higher than or equivalent to
marketable gas production).
(4) Scope 3 GHG emissions, category 11, which correspond to
indirect GHG emissions related to the sale of petroleum products
(including biofuels).
(5) Scope 1+2+3 GHG emissions in Europe are defined as the sum
of Scope 1+2 GHG emissions of facilities operated by the Company
and indirect GHG emissions related to the use by customers of
energy products (Scope 3) in the EU, Norway, United Kingdom and
Switzerland.
1.3.3 Production*
Hydrocarbon production 1H22 1H21 1H22 vs 1H21
Hydrocarbon production (kboe/d) 2,791 2,805 -0.5%
Oil (including bitumen) (kb/d) 1,287 1,265 +2%
Gas (including condensates and associated NGL)
(kboe/d) 1,504 1,540 -2%
Hydrocarbon production (kboe/d) 2,791 2,805 -0.5%
Liquids (kb/d) 1,505 1,486 +1%
Gas (Mcf/d) 6,997 7,208 -3%
* Company production = E&P production + iGRP production
* Company production = E&P production + iGRP production
Hydrocarbon production was 2,791 kboe/d in the first half 2022,
down slightly by 0.5% year-on-year, comprised of:
-- +2% due to the increase in production quotas of OPEC countries,
-- +2% due to the start-up and ramp-up of projects, including Clov Phase 2
and Zinia Phase 2 in Angola, and Iara in Brazil,
-- +2% due to a reduction in planned maintenance and unplanned downtime,
-- -2% portfolio effect, mainly related to the end of the Qatargas 1
operating license,
-- -1% due to security-related production cuts in Libya and Nigeria,
-- -1% due to the price effect,
-- -2.5% due to the natural decline of fields.
1.4 Analysis of business segments
1.4.1 Integrated Gas, Renewables & Power (iGRP)
1.4.1.1 Production and sales of Liquefied natural gas (LNG) and
electricity
Hydrocarbon production for LNG 1H22 1H21 1H22 vs 1H21
iGRP (kboe/d) 477 510 -6%
Liquids (kb/d) 56 58 -2%
Gas (Mcf/d) 2,291 2,470 -7%
Liquefied Natural Gas in Mt 1H22 1H21 1H22 vs 1H21
Overall LNG sales 24.9 20.4 +22%
incl. Sales from equity production* 8.6 8.5 -
incl. Sales by TotalEnergies from equity production
and third party purchases 22.2 16.7 +33%
* The Company's equity production may be sold by Total Energies
or by the joint ventures.
Hydrocarbon production for LNG is down 6% year-on-year in the
first half 2022, mainly due to the end of the Qatargas 1 contract
and the decrease in supply to NLNG for security reasons in Nigeria.
Production in Snøhvit, Norway, restarted in the second quarter.
Total LNG sales are up year-on-year by 22% in the first half
2022, due to the increase in spot purchases to maximize the use of
the Company's regasification capacity in Europe.
Renewables & Electricity 1H22 1H21 1H22 vs 1H21
Portfolio of renewable power generation gross
capacity (GW)(1)(2) 50.7 41.7 +22%
o/w installed capacity 11.6 8.3 +40%
o/w capacity in construction 5.2 5.4 -4%
o/w capacity in development 33.9 28.0 +21%
Gross renewables capacity with PPA (GW)(1)(2) 26.8 22.6 +19%
Portfolio of renewable power generation net capacity
(GW)(1)(2) 38.4 30.7 +25%
o/w installed capacity 5.8 4.0 +46%
o/w capacity in construction 3.7 3.1 +17%
o/w capacity in development 28.9 23.6 +22%
Net power production (TWh)(3) 15.2 9.8 +56%
incl. Power production from renewables 4.7 3.2 +47%
Clients power -- BtB and BtC (Million)(2) 6.2 5.8 +6%
Clients gas -- BtB and BtC (Million)(2) 2.7 2.7 +1%
Sales power -- BtB and BtC (TWh) 28.6 28.8 -
Sales gas -- BtB and BtC (TWh) 54.1 56.8 -5%
Proportional adjusted EBITDA Renewables and
Electricity (M$)(4) 637 654* -3%
incl. from renewables business 222 230* -4%
* 1H21 data corrected after taking into account AGEL's
result.
(1) Includes 20% of Adani Green Energy Ltd's gross capacity
effective first quarter 2021.
(2) End of period data.
(3) Solar, wind, biogas, hydroelectric and combined-cycle gas
turbine (CCGT) plants.
(4) TotalEnergies share (% interest) of EBITDA (Earnings Before
Interest, Tax, Depreciation and Amortization) in Renewables &
Electricity affiliates, regardless of consolidation method.
Gross installed capacity of renewable electricity generation
grew to 11.6 GW at the end of first half 2022.
Net electricity production was 15.2 TWh in the first half 2022,
an increase of 56% year-on-year, thanks to higher utilization rates
of flexible power plants (CCGT) as well as growth in electricity
generation from renewable sources.
EBITDA from the Renewables & Electricity business reached
$637 million in the first half 2022, down 3% year-on-year.
1.4.1.2 Results
In millions of dollars 1H22 1H21 1H22 vs 1H21
Adjusted net operating income* 5,606 1,876 x3
including adjusted income from equity affiliates 2,649 620 x4.3
Organic investments 599 1,512 -60%
Net acquisitions 583 2,059 -72%
Net investments 1,182 3,571 -67%
Operating cash flow before working capital
changes** 4,945 1,963 x2.5
Cash flow from operations*** 4,285 1,347 x3.2
* Detail of adjustment items shown in the business segment
information annex to financial statements.
** Excluding financial expenses, except those related to lease
contracts, excluding the impact of contracts recognized at fair
value for the sector and including capital gains on the sale of
renewable projects.
*** Excluding financial charges, except those related to
leases.
Adjusted net operating income for the iGRP sector was $5,606
million in the first half 2022, tripling over one year, thanks to
higher LNG prices, the performance of the gas, LNG and electricity
trading activities and the growing contribution of the Renewables
& Electricity businesses.
Operating cash flow before working capital changes was 2.5 times
higher over one year to $4,945 million in the first half 2022, for
the same reasons.
1.4.2 Exploration-Production
1.4.2.1 Production
Hydrocarbon production 1H22 1H21 1H22 vs 1H21
EP (kboe/d) 2,314 2,295 +1%
Liquids (kb/d) 1,449 1,428 +1%
Gas (Mcf/d) 4,706 4,738 -1%
1.4.2.2 Results
In millions of dollars, except effective tax rate 1H22 1H21 1H22 vs 1H21
Adjusted net operating income* 9,734 4,188 x2.3
including adjusted income from equity affiliates 642 549 +17%
Effective tax rate** 47.1% 39.5%
Organic investments 3,299 2,838 +16%
Net acquisitions 2,541 29 x87.6
Net investments 5,840 2,867 x2
Operating cash flow before working capital
changes*** 14,686 8,086 +82%
Cash flow from operations*** 14,536 8,571 +70%
* Details on adjustment items are shown in the business segment
information annex to financial statements.
** 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).
*** Excluding financial charges, except those related to
leases.
Adjusted net operating income for Exploration & Production
was $9,734 million in the first half 2022, 2,3 times higher in the
first half 2021, thanks to the sharp increase in oil and gas
prices.
Operating cash flow before working capital changes increased by
82% to $14,686 million in the first half 2022, in line with higher
oil and gas prices.
1.4.3 Downstream (Refining & Chemicals and Marketing &
Services)
1.4.3.1 Results
In millions of dollars 1H22 1H21 1H22 vs 1H21
Adjusted net operating income* 4,618 1,455 x3.2
Organic investments 878 803 +9%
Net acquisitions (125) (104) ns
Net investments 753 699 +8%
Operating cash flow before working capital
changes** 5,444 2,332 x2.3
Cash flow from operations** 6,111 4,330 +41%
* Detail of adjustment items shown in the business segment
information annex to financial statements.
** Excluding financial charges, except those related to
leases.
1.4.3.2 Refining & Chemicals
1.4.3.2.1 Refinery and petrochemicals throughput and utilization
rates
Refinery throughput and utilization rate* 1H22 1H21 1H22 vs 1H21
Total refinery throughput (kb/d) 1,448 1,109 +31%
France 324 131 x2.5
Rest of Europe 627 578 +8%
Rest of world 497 400 +24%
Utlization rate based on crude only** 81% 58%
* Includes refineries in Africa reported in the Marketing &
Services segment.
** Based on distillation capacity at the beginning of the year,
excluding Grandpuits (definitively shut down first quarter 2021)
from 2021 and Lindsey refinery (divested) from second quarter
2021.
Petrochemicals production and utilization rate 1H22 1H21 1H22 vs 1H21
Monomers* (kt) 2,611 2,829 -8%
Polymers (kt) 2,461 2,377 +4%
Vapocracker utilization rate** 78% 88%
* Olefins.
** Based on olefins production from steamcrackers and their
treatment capacity at the start of the year.
Refinery throughput Increased by 31% in the first half 2022 over
one year due to the recovery in demand, particularly in Europe and
the United States, the restart of the Donges refinery in France and
the Leuna refinery in Germany, which was scheduled for a major
turnaround in the second quarter 2021, as well as the restart, in
2021, of the distillation unit of the Normandy refinery in
France.
Monomer production was down 8% in the first half 2022
year-on-year, mainly due to planned turnarounds at the Antwerp in
Belgium and Feyzin in France as well as construction affecting
sites in the U.S.
1.4.3.2.2 Results
In millions of dollars 1H22 1H21 1H22 vs 1H21
Adjusted net operating income* 3,880 754 x5.1
Organic investments 510 501 +2%
Net acquisitions (34) (55) ns
Net investments 476 446 +7%
Operating cash flow before working capital
changes** 4,396 1,147 x3.8
Cash flow from operations** 4,633 3,228 +44%
* Detail of adjustment items shown in the business segment
information annex to financial statements.
** Excluding financial charges, except those related to
leases.
Adjusted net operating income for the Refining-Chemicals was
exceptional: $3,880 million in the first half of 2022 compared to
$754 million a year ago, due to higher refined volumes in response
to the recovery in demand in Europe and the United States, very
high margins on distillates and gasoline in the context of reduced
imports of Russian petroleum products, as well as the
outperformance of crude oil and petroleum product trading
activities.
Operating cash flow before working capital changes also
increased sharply to to $4,396 million in the first half 2022.
1.4.3.3 Marketing & Services
1.4.3.3.1 Petroleum product sales
Sales in kb/d* 1H22 1H21 1H22 vs 1H21
Total Marketing & Services sales 1,464 1,458 -
Europe 804 783 +3%
Rest of world 661 674 -2%
* Excludes trading and bulk refining sales.
Sales of petroleum products were stable in the first half 2022
compared to the same periods last year, as the recovery in aviation
and network activities worldwide offset the decline in sales to
commercial and industrial customers, particularly in Europe.
1.4.3.3.2 Results
In millions of dollars 1H22 1H21 1H22 vs 1H21
Adjusted net operating income* 738 701 +5%
Organic investments 368 302 +22%
Net acquisitions (91) (49) ns
Net investments 277 253 +9%
Operating cash flow before working capital
changes** 1,048 1,185 -12%
Cash flow from operations** 1,478 1,102 +34%
* Detail of adjustment items shown in the business segment
information annex to financial statements.
** Excluding financial charges, except those related to
leases.
In first half 2022, adjusted net operating income was $738
million, up 5% year-on-year, thanks mainly to the recovery of the
network and aviation activities.
Operating cash flow before working capital changes was down 12%
year-on-year to $1,048 million in the first half 2022, mainly due
to the fiscal effect of higher prices on the valuation of petroleum
product inventories.
1.5 TotalEnergies results
1.5.1 Adjusted net operating income from business segments
Adjusted net operating income for the sectors was $19,958
million in the first half 2022, compared to $7,519 million a year
earlier, due to higher oil and gas prices, refining margins and the
good performance of trading activities.
1.5.2 Adjusted net income (TotalEnergies share)
Adjusted net income (TotalEnergies share) was $18,773 million in
the first half 2022 compared to $6,466 million a year earlier, due
to higher oil and gas prices, refining margins and the good
performance of trading activities.
Adjusted net income excludes the after-tax inventory effect,
special items and impact of changes in fair value(1) .
Total net income adjustments(2) were $(8,137) million in the
first half 2022. Taking into account notably the impact of new
sanctions prohibiting the export of LNG technologies benefiting a
Russian company on the execution ability of the Arctic LNG 2
project, TotalEnergies took an impairment of $4.1 billion in its
accounts as of March 31 2022. TotalEnergies recorded in its
accounts as of June 30 2022 a new $3.5 billion impairment charge
related mainly to the potential impact of international sanctions
on the value of its Novatek stake.
The effective tax rate for TotalEnergies was 39.0% in the first
half 2022, compared to 34.4% in the first half 2021.
1.5.3 Adjusted earnings per share
Adjusted fully-diluted earnings per share was $7.14 in the first
half 2022, calculated based on 2,602 million weighted-average
diluted shares, compared to $2.38 a year earlier.
As of June 30, 2022, the number of fully-diluted shares was
2,578 million.
As part of its shareholder return policy, TotalEnergies
repurchased 55.3 million shares for cancellation in the first half
of 2022 for $3 billion.
1.5.4 Acquisitions -- asset sales
Acquisitions were $3,864 million in the first half 2022 and
included notably the bonus paid to the State of Brazil and the
payments to Petrobras related to the award of the Atapu and Sepia
Production Sharing Contracts in Brazil, as well as the bonus
related to the offshore wind concessions in New York Bight and
North Carolina, in the United States.
Asset sales were $866 million in the first half 2022 and
included notably the partial sale of the Landivisiau power
generation plant in France, a payment related to the sale of
interests in the CA1 offshore block in Brunei and the sale by
SunPower of its Enphase shares.
1.5.5 Net cash flow
TotalEnergies' net cash flow(3) was $17,061 million in the first
half 2022 compared to $4,551 million a year earlier, which takes
into account the $13.1 billion increase in operating cash flow
before changes in working capital, partially offset by a $631
million increase in net investments to $7,798 million in the first
half 2022.
1.5.6 Profitability
The return on equity was 27.1% for the twelve months ended June
30, 2022.
July 1, April 1, July 1,
2021June 30, 2021March 2020June 30,
In millions of dollars 2022 31, 2022 2021
Adjusted net income 30,716 24,382 8,786
Average adjusted shareholders'
equity 113,333 111,794 105,066
Return on equity (ROE) 27.1% 21.8% 8.4%
The return on average capital employed was 23.1% for the twelve
months ended June 30, 2022.
July 1, April 1, July 1,
2021June 30, 2021March 31, 2020June 30,
In millions of dollars 2022 2022 2021
Adjusted net operating income 32,177 25,803 10,252
Average capital employed 139,377 143,517 142,172
ROACE 23.1% 18.0% 7.2%
(1) Adjustment items shown on page --.
(2) Details shown on page -- and in the appendix to the
financial statements.
(3) Net cash flow = cash flow - net investments (including other
transactions with non-controlling interest).
1.6 TotalEnergies SE accounts
Net income for TotalEnergies SE, the parent company, was
EUR3,702 million in the first half 2022 compared to EUR4,568 in the
first half 2021.
1.7 2022 Sensitivities*
Estimated impact Estimated impact
on adjusted net on cash flow from
Change operating income operations
Dollar +/- 0.1 $ per EUR -/+ 0.1 B$ 0 B$
Average liquids
price** +/-10 $/b +/- 2.7 B$ +/- 3.2 B$
European gas price
- NBP +/-10 $/Mbtu +/- 3.0 B$ +/- 3.0 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
2022. Actual results could vary significantly from estimates based
on the application of these sensitivities. The impact of the $-EUR
sensitivity on adjusted net operating income is essentially
attributable to Refining & Chemicals.
** In a 60 $/b Brent environment.
1.8 Summary and outlook
Oil and gas prices, while volatile, have remained at high levels
since the beginning of the third quarter. Due to the limited
additional spare capacity of production and refining at the global
level, market disruptions linked to the sanctions against Russia
and the counter-sanctions implemented by Russia, the supply-demand
balance of energy markets are expected to remain fragile and
support prices, especially gas.
In the oil markets however, the price of Brent retreated to a
level close to $100/bbl in July, due to negative expectations on
global growth, and therefore on oil demand, in response to high
energy prices and inflation.
Gas prices are expected to remain high, particularly in Europe
where gas indices exceeded $50/Mbtu in early July for winter
2022-23 futures contracts, due to fears of a shutdown in pipeline
exports from Russia to Europe. Local electricity markets are also
impacted by gas prices.
The Company is mobilizing its human and financial resources to
contribute to the diversification of Europe's gas supply by
maximizing the use of its LNG regasification capacity. Given the
evolution of oil and gas prices in recent months and the lag effect
on pricing formulas, TotalEnergies anticipates that its average LNG
selling price should be more than $15/Mbtu in the third quarter of
2022. However, the Company's LNG operations will be affected by the
outage of the Freeport LNG plant in the third quarter.
Despite the approximately 40 kboe/d increase in planned
maintenance in the third quarter compared to the second quarter,
TotalEnergies expects production to be stable compared to the
second quarter due to the contribution of new projects, notably in
Brazil with the production ramp-up of Mero 1 and the entry into
Sépia and Atapu. The Refining business aims to maintain a high
utilization rate.
With nearly $8 billion in investments recorded at the end of
June, TotalEnergies anticipates net investments of around $16
billion in 2022, 25% of which will be in Renewables &
Electricity.
Given the strong cash flow generation and strong balance sheet,
the Board of Directors has decided to prioritize countercyclical
opportunities to accelerate the Company's transformation. The
shareholder return policy is reinforced through dividend growth of
5% and the continuation of the share buyback program of $2 billion
in the third quarter.
1.9 Other information
1.9.1 Results from Russian assets
1H22 2021
Operating Operating
cash flow cash flow
before before
Adjusted net working Adjusted net working
operating capital operating capital
income changes income changes
Russian Upstream Assets 1,727 1,144 2,092 1,613
Capital Employed by TotalEnergies in Russia as at June 30, 2022
was $8,760 million, after taking into account the $3,513 million
impairment and the impact of the evolution of the ruble/dollar
exchange rate between March 31, 2022 and June 30, 2022, which leads
to a $2,066 million revaluation of Capital Employed on the balance
sheet as at June 30, 2022.
1.9.2 Operating information by segment
1.9.2.1 Company's production (Exploration & Production +
iGRP)
Combined liquids and gas production by region
(kboe/d) 1H22 1H21 1H22 vs 1H21
Europe and Central Asia 1,007 1,018 -1%
Africa 479 542 -12%
Middle East and North Africa 675 652 +3%
Americas 403 377 +7%
Asia-Pacific 227 216 +5%
Total production 2,791 2,805 -
includes equity affiliates 702 740 -5%
Liquids production by region (kb/d) 1H22 1H21 1H22 vs 1H21
Europe and Central Asia 343 363 -5%
Africa 362 407 -11%
Middle East and North Africa 542 500 +8%
Americas 216 181 +19%
Asia-Pacific 42 35 +21%
Total production 1,505 1,486 +1%
includes equity affiliates 206 207 -1%
Gas production by region (Mcf/d) 1H22 1H21 1H22 vs 1H21
Europe and Central Asia 3,563 3,523 +1%
Africa 594 686 -13%
Middle East and North Africa 734 845 -13%
Americas 1,052 1,098 -4%
Asia-Pacific 1,054 1,056 -
Total production 6,997 7,208 -3%
includes equity affiliates 2,673 2,875 -7%
1.9.2.2 Downstream (Refining & Chemicals and Marketing &
Services)
Petroleum product sales by region (kb/d) 1H22 1H21 1H22 vs 1H21
Europe 1,724 1,540 +12%
Africa 747 665 +12%
Americas 849 785 +8%
Rest of world 618 493 +25%
Total consolidated sales 3,939 3,483 +13%
Includes bulk sales 409 368 +11%
Includes trading 2,065 1,658 +25%
Petrochemicals production* (kt) 1H22 1H21 1H22 vs 1H21
Europe 2,282 2,512 -9%
Americas 1,240 1,235 -
Middle East and Asia 1,549 1,459 +6%
* Olefins, polymers
* Olefins, polymers
1.9.2.3 Renewables
Installed
power
generation
gross
capacity
(GW)(1),(2) 1H22 1H21
Onshore Offshore Onshore Offshore
Solar Wind Wind Other Total Solar Wind Wind Other Total
France 0.7 0.5 0.0 0.1 1.3 0.5 0.5 0.0 0.1 1.0
Rest of
Europe 0.2 1.1 0.0 0.0 1.3 0.1 1.0 0.0 0.1 1.1
Africa 0.1 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.1
Middle East 0.7 0.0 0.0 0.0 0.7 0.3 0.0 0.0 0.0 0.3
North America 1.1 0.0 0.0 0.0 1.1 0.8 0.0 0.0 0.0 0.9
South America 0.4 0.3 0.0 0.0 0.7 0.4 0.1 0.0 0.0 0.5
India 4.9 0.2 0.0 0.0 5.1 3.5 0.1 0.0 0.0 3.6
Asia-Pacific 1.2 0.0 0.1 0.0 1.2 0.7 0.0 0.0 0.0 0.7
Total 9.2 2.1 0.1 0.2 11.6 6.4 1.8 0.0 0.1 8.3
(1) Includes 20% of gross capacity of Adani Green Energy Ltd
effective first quarter 2021.
(2) End-of-period data.
Power
generation
gross
capacity from
renewables in
construction
(GW)(1),(2) 1H22 1H21
Onshore Offshore Onshore Offshore
Solar Wind Wind Other Total Solar Wind Wind Other Total
France 0.2 0.2 0.0 0.1 0.4 0.3 0.1 0.0 0.1 0.5
Rest of
Europe 0.0 0.0 1.1 0.0 1.1 0.1 0.1 1.1 0.0 1.3
Africa 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Middle East 0.4 0.0 0.0 0.0 0.4 0.8 0.0 0.0 0.0 0.8
North America 1.3 0.0 0.0 0.0 1.3 0.3 0.0 0.0 0.0 0.3
South America 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.0 0.0 0.2
India 0.9 0.3 0.0 0.0 1.2 0.9 0.2 0.0 0.0 1.1
Asia-Pacific 0.1 0.0 0.6 0.0 0.7 0.5 0.0 0.6 0.0 1.1
Total 2.8 0.5 1.7 0.1 5.2 2.8 0.6 1.8 0.1 5.4
(1) Includes 20% of gross capacity of Adani Green Energy Ltd
effective first quarter 2021.
(2) End-of-period data.
Power
generation
gross
capacity from
renewables in
development
(GW)(1),(2) 1H22 1H21
Onshore Offshore Onshore Offshore
Solar Wind Wind Other Total Solar Wind Wind Other Total
France 2.3 0.5 0.0 0.0 2.8 3.2 0.8 0.0 0.0 4.0
Rest of
Europe 4.8 0.3 4.4 0.1 9.5 5.3 0.3 0.4 0.0 6.0
Africa 0.6 0.1 0.0 0.1 0.8 0.4 0.1 0.0 0.2 0.6
Middle East 1.8 0.0 0.0 0.0 1.8 0.1 0.0 0.0 0.0 0.1
North America 6.2 0.1 4.0 0.8 11.0 3.5 0.2 0.0 0.7 4.3
South America 0.6 0.0 0.0 0.2 0.8 0.6 1.0 0.0 0.0 1.7
India 3.9 0.1 0.0 0.0 4.0 6.2 0.1 0.0 0.0 6.3
Asia-Pacific 1.7 0.2 1.2 0.1 3.2 1.1 0.0 0.0 0.0 1.1
Total 21.7 1.3 9.6 1.3 33.9 20.3 2.5 0.4 0.8 24.0
(1) Includes 20% of gross capacity of Adani Green Energy Ltd
effective first quarter 2021.
(2) End-of-period data.
Gross
renewables
capacity
covered by
PPA at
06/30/2022
(GW) In operation In construction In development
Onshore Offshore Onshore Offshore Onshore Offshore
Solar Wind Wind Other Total Solar Wind Wind Other Total Solar Wind Wind Other Total
Europe 0.9 1.6 0.0 X 2.6 X X 0.8 X 1.2 3.4 0.2 0.0 X 3.6
Asia 6.0 0.2 X X 6.4 0.9 0.3 0.6 0.0 1.8 4.3 X 0.0 X 4.5
North
America 1.0 X 0.0 X 1.1 1.3 0.0 0.0 X 1.3 X X 0.0 X X
Rest of
World 1.2 0.3 0.0 X 1.5 0.4 0.0 0.0 X 0.5 1.9 0.0 0.0 0.3 2.2
Total 9.2 2.1 X X 11.5 2.8 0.5 1.4 X 4.8 9.7 0.3 0.0 0.5 10.5
X : not specified, capacity < 0.2 GW.
PPA average
price at
06/30/2022
($/MWh) In operation In construction In development
Onshore Offshore Onshore Offshore Onshore Offshore
Solar Wind Wind Other Total Solar Wind Wind Other Total Solar Wind Wind Other Total
Europe 201 115 - X 145 X X 72 X 75 44 85 - X 46
Asia 70 43 X X 70 55 51 254 - 115 39 X - X 39
North
America 121 X - X 125 28 - - X 28 X X - X X
Rest of
World 90 54 - X 82 18 - - X 18 76 - - - 76
Total 90 100 X X 93 38 64 146 X 73 43 81 - 145 45
X : not specified, capacity < 0.2 GW.
1.9.3 Adjustment items to net income (TotalEnergies share)
In millions of dollars 1H22 1H21
Special items affecting net income (TotalEnergies share) (9,539) (1,930)
Gain (loss) on asset sales - (1,379)
Restructuring charges (11) (271)
Impairments (8,780) (193)
Other (748) (87)
After-tax inventory effect : FIFO vs. replacement cost 2,033 1,064
Effect of changes in fair value (631) (50)
Total adjustments affecting net income (8,137) (916)
1.9.4 Reconciliation of adjusted EBITDA with consolidated
financial statements
1.9.4.1 Reconciliation of net income (TotalEnergies share) to
adjusted EBITDA
In millions of dollars 1H22 1H21 1H22 vs 1H21
Net income -- TotalEnergies share 10,636 5,550 +92%
Less: adjustment items to net income
(TotalEnergies share) 8,137 916 x8.9
Adjusted net income -- TotalEnergies share 18,773 6,466 x2.9
Adjusted items
Add: non-controlling interests 165 147 +12%
Add: income taxes 9,998 2,931 x3.4
Add: depreciation, depletion and impairment of
tangible assets and mineral interests 6,186 6,285 -2%
Add: amortization and impairment of intangible
assets 194 197 -2%
Add: financial interest on debt 1034 967 +7%
Less: financial income and expense from cash &
cash equivalents (189) (156) ns
Adjusted EBITDA 36,161 16,837 x2.1
1.9.4.2 Reconciliation of revenues from sales to adjusted EBITDA
and net income (TotalEnergies share)
In millions of dollars 1H22 1H21 1H22 vs 1H21
Adjusted items
Revenues from sales 134,398 80,310 +67%
Purchases, net of inventory variation (86,785) (51,397) ns
Other operating expenses (15,029) (13,576) ns
Exploration costs (253) (290) ns
Other income 550 554 -1%
Other expense, excluding amortization and
impairment of intangible assets (604) (137) ns
Other financial income 350 374 -6%
Other financial expense (271) (261) ns
Net income (loss) from equity affiliates 3,805 1,260 x3
Adjusted EBITDA 36,161 16,837 x2.1
Adjusted items
Less: depreciation, depletion and impairment
of tangible assets and mineral interests (6,186) (6,285) ns
Less: amortization of intangible assets (194) (197) ns
Less: financial interest on debt (1,034) (967) ns
Add: financial income and expense from cash
& cash equivalents 189 156 +21%
Less: income taxes (9,998) (2,931) ns
Less: non-controlling interests (165) (147) ns
Add: adjustment -- TotalEnergies share (8,137) (916) ns
Net income -- TotalEnergies share 10,636 5,550 +92%
1.9.5 Investments -- Divestments
In millions of dollars 1H22 1H21 1H22 vs 1H21
Organic investments (a) 4,800 5,181 -7%
Capitalized exploration 212 488 -57%
Increase in non-current loans 511 672 -24%
Repayment of non-current loans, excluding organic
loan repayment from equity affiliates (609) (185) ns
Change in debt from renewable projects
(TotalEnergies share) (190) (171) ns
Acquisitions (b) 3,864 2,870 +35%
Asset sales (c) 866 884 -2%
Change in debt from renewable projects (partner
share) 174 105 +66%
Net acquisitions 2,998 1,986 +51%
Net investments (a + b - c) 7,798 7,167 +9%
Other transactions with non-controlling interests
(d) - - ns
Organic loan repayment from equity affiliates (e) (725) (108) ns
Change in debt from renewable projects financing*
(f) 364 276 +32%
Capex linked to capitalized leasing contracts (g) 73 47 +55%
Expenditures related to carbon credits (h) 4 - ns
Cash flow used in investing activities (a + b - c
- d + e + f - g - h) 7,360 7,288 +1%
* Change in debt from renewable projects (TotalEnergies share
and partner share).
1.9.6 Cash-flow
In millions of dollars 1H22 1H21 1H22 vs 1H21
Operating cash flow before working capital
changes w/o financials charges (DACF) 25,626 12,511 x2
Financial charges (767) (793) ns
Operating cash flow before working capital
changes (a)* 24,859 11,718 x2.1
(Increase) decrease in working capital** (2,614) 259 ns
Inventory effect 2,406 1,346 +79%
Capital gain from renewable projects sale (25) (66) ns
Organic loan repayment from equity affiliates (725) (108) ns
Cash flow from operations 23,901 13,149 +82%
Organic investments (b) 4,800 5,181 -7%
Free cash flow after organic investments, w/o
net asset sales (a - b) 20,059 6,537 x3.1
Net investments (c) 7,798 7,167 +9%
Net cash flow (a - c) 17,061 4,551 x3.7
* 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
iGRP's contracts and including capital gain from renewable projects
sale. Historical data have been restated to cancel the impact of
fair valuation of iGRP sector's contracts.
** Changes in working capital are presented excluding the
mark-to-market effect of iGRP's contracts.
1.9.7 Gearing ratio
In millions of dollars 30/06/2022 31/03/2022 30/06/2021
Current borrowings* 14,589 16,759 15,795
Other current financial liabilities 401 502 322
Current financial assets*(,) ** (7,697) (7,231) (4,326)
Net financial assets classified as held
for sale (14) (38) -
Non-current financial debt* 39,233 38,924 44,687
Non-current financial assets* (692) (587) (2,726)
Cash and cash equivalents (32,848) (31,276) (28,643)
Net debt (a) 12,972 17,053 25,109
Shareholders' equity - TotalEnergies share 116,688 116,480 108,096
Non-controlling interests 3,309 3,375 2,480
Shareholders' equity (b) 119,997 119,855 110,576
Net-debt-to-capital ratio = a / (a+b) 9.8% 12.5% 18.5%
Leases (c) 7,963 8,028 7,702
Net-debt-to-capital ratio including leases
(a+c) / (a+b+c) 14.9% 17.3% 22.9%
* Excludes leases receivables and leases debts.
** Including initial margins held as part of the Company's
activities on organized markets.
1.9.8 Return on average capital employed
1.9.8.1 Twelve months ended June 30, 2022
Integrated
Gas, Exploration
In millions Renewables & & Refining & Marketing &
of dollars Power Production Chemicals Services Company
Adjusted net
operating
income 9,973 15,985 5,035 1,655 32,177
Capital
employed at
06/30/2021* 49,831 76,013 9,285 8,439 141,720
Capital
employed at
06/30/2022* 54,174 70,248 7,958 7,475 137,035
ROACE 19.2% 21.9% 58.4% 20.8% 23.1%
1.9.8.2 Twelve months ended March 31, 2022
Integrated
Gas, Exploration
In millions Renewables & & Refining & Marketing &
of dollars Power Production Chemicals Services Company
Adjusted net
operating
income 8,309 13,479 2,786 1,606 25,803
Capital
employed at
03/31/2021* 48,423 78,170 10,403 8,198 145,180
Capital
employed at
03/31/2022* 54,740 71,518 8,847 7,751 141,853
ROACE 16.1% 18.0% 28.9% 20.1% 18.0%
* At replacement cost (excluding after-tax inventory
effect).
1.10 Principal risks and uncertainties for the remaining six
months of 2022
The Company and its businesses are subject to various risks
relating to changing political, economic, monetary, legal,
environmental, social, industrial, competitive, operating and
financial conditions. A description of such risk factors is
provided in TotalEnergies' 2021 Universal Registration Document
filed with the Autorité des marchés financiers (French Financial
Markets Authority) on March 25, 2022. These conditions are subject
to change not only in the six months remaining in the current
financial year, but also in the years to come.
Additionally, a description of certain risks is included in the
Notes to the condensed Consolidated Financial Statements for the
first half of 2022 (page of this half-year financial report).
1.11 Major related parties' transactions
Information concerning the major related parties' transactions
for the first six months of 2022 is provided in Note 6 to the
condensed Consolidated Financial Statements for the first half of
2022 (page of this half-year financial report).
Disclaimer
The terms "TotalEnergies", "TotalEnergies company" and "Company"
in this document are used to designate TotalEnergies SE and the
consolidated entities directly or indirectly controlled by
TotalEnergies SE. Likewise, the words "we", "us" and "our" may also
be used to refer to these entities or their employees. The entities
in which TotalEnergies SE directly or indirectly owns a
shareholding are separate and independent legal entities.
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.
Neither TotalEnergies SE nor any of its subsidiaries assumes any
obligation to update publicly any forward-looking information or
statement, objectives or trends contained in this document whether
as a result of new information, future events or otherwise. The
information on risk factors that could have a significant adverse
effect on TotalEnergies' business, financial condition, including
its operating income and cash flow, reputation, outlook or the
value of financial instruments issued by TotalEnergies is provided
in the most recent version of the Universal Registration Document
which is filed by TotalEnergies SE with the French Autorité des
Marchés Financiers and the annual report on Form 20-F filed with
the United States Securities and Exchange Commission ("SEC").
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. In addition to IFRS measures, certain
alternative performance indicators are presented, such as
performance indicators excluding the adjustment items described
below (adjusted operating income, adjusted net operating income,
adjusted net income), return on equity (ROE), return on average
capital employed (ROACE), gearing ratio, operating cash flow before
working capital changes, the shareholder rate of return. These
indicators are meant to facilitate the analysis of the financial
performance of TotalEnergies and the comparison of income between
periods. They allow investors to track the measures used internally
to manage and measure the performance of TotalEnergies.
These 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
asset 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) 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 TotalEnergies' principal
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 price
differentials 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.
(iii) Effect of changes in fair value
The effect of changes in fair value presented as an adjustment
item reflects, for some transactions, differences between internal
measures of performance used by TotalEnergies' 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
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.
The adjusted results (adjusted operating income, adjusted net
operating income, adjusted net income) are defined as replacement
cost results, adjusted for special items, excluding the effect of
changes in fair value.
Euro amounts presented for the fully adjusted-diluted earnings
per share represent dollar amounts converted at the average
euro-dollar (EUR-$) exchange rate for the applicable period and are
not the result of financial statements prepared in euros.
Cautionary Note to U.S. Investors -- The SEC permits oil and gas
companies, in their filings with the SEC, to separately disclose
proved, probable and possible reserves that a company has
determined in accordance with SEC rules. We may use certain terms
in this press release, such as "potential reserves" or "resources",
that the SEC's guidelines strictly prohibit us from including in
filings with the SEC. U.S. investors are urged to consider closely
the disclosure in the Form 20-F of TotalEnergies SE, File Ndeg
1-10888, available from us at 2, place Jean Millier -- Arche Nord
Coupole/Regnault - 92078 Paris-La Défense Cedex, France, or at our
website totalenergies.com. You can also obtain this form from the
SEC by calling 1-800-SEC-0330 or on the SEC's website sec.gov.
2. CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2022
2.1 Statutory Auditors' Review Report on the half-yearly
Financial Information
This is a free translation into English of the statutory
auditors' review report on the half-yearly financial information
issued in French and is provided solely for the convenience of
English-speaking users. This report includes information relating
to the specific verification of information given in the Group's
half-yearly management report. This report should be read in
conjunction with, and construed in accordance with, French law and
professional standards applicable in France.
For the period from January 1(st) to June 30, 2022
To the Shareholders,
In compliance with the assignment entrusted to us by your Annual
General Meeting and in accordance with the requirements of article
L. 451-1-2 III of the French monetary and financial code ("code
monétaire et financier"), we hereby report to you on:
-- the review of the accompanying condensed half-yearly consolidated
financial statements of TotalEnergies SE for the period from January 1st
to June 30, 2022,
-- the verification of the information presented in the half-yearly
management report.
These condensed half-yearly consolidated financial statements
are the responsibility of the Board of Directors. Our role is to
express a conclusion on these financial statements based on our
review.
I -- Conclusion on the financial statements
We conducted our review in accordance with professional
standards applicable in France.
A review of interim financial information consists of making
inquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with professional standards applicable in
France and consequently does not enable us to obtain assurance that
we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
Based on our review, nothing has come to our attention that
causes us to believe that the accompanying condensed half-yearly
consolidated financial statements are not prepared, in all material
respects, in accordance with IAS 34 -- standard of the IFRSs as
adopted by the European Union applicable to interim financial
information.
II -- Specific verification
We have also verified the information presented in the
half-yearly management report on the condensed half-yearly
consolidated financial statements subject to our review.
We have no matters to report as to its fair presentation and
consistency with the condensed half-yearly consolidated financial
statements.
Neuilly-sur-Seine and Paris-La Défense, July 27, 2022
The Statutory Auditors
French original signed by
PricewaterhouseCoopers Audit ERNST & YOUNG Audit
Olivier Lotz Cécile Saint-Martin Laurent Vitse Stéphane
Partner Partner Partner Pédron Partner
2.2 Consolidated statement of income -- half-yearly
TotalEnergies
(unaudited)
(M$)(a) 1(st) half 2022 1(st) half 2021
Sales 143,380 90,786
Excise taxes (8,985) (10,520)
Revenues from sales 134,395 80,266
Purchases, net of inventory variation (85,091) (50,117)
Other operating expenses (15,664) (13,597)
Exploration costs (978) (290)
Depreciation, depletion and impairment of
tangible assets and mineral interests (6,781) (6,446)
Other income 572 581
Other expense (3,595) (957)
Financial interest on debt (1,034) (967)
Financial income and expense from cash &
cash equivalents 459 172
Cost of net debt (575) (795)
Other financial income 434 374
Other financial expense (271) (261)
Net income (loss) from equity affiliates (1,503) 201
Income taxes (10,088) (3,248)
CONSOLIDATED NET INCOME 10,855 5,711
TotalEnergies share 10,636 5,550
Non-controlling interests 219 161
Earnings per share ($) 4.04 2.04
Fully-diluted earnings per share ($) 4.02 2.03
(a) Except for per share amounts.
2.3 Consolidated statement of comprehensive income --
half-yearly
TotalEnergies
(unaudited)
(M$) 1(st) half 2022 1(st) half 2021
CONSOLIDATED NET INCOME 10,855 5,711
Other comprehensive income
Actuarial gains and losses 204 449
Change in fair value of investments in
equity instruments (17) 68
Tax effect (42) (154)
Currency translation adjustment generated by
the parent company (7,137) (2,934)
ITEMS NOT POTENTIALLY RECLASSIFIABLE TO
PROFIT AND LOSS (6,992) (2,571)
Currency translation adjustment 3,535 1,777
Cash flow hedge 2,959 80
Variation of foreign currency basis spread 70 (4)
Share of other comprehensive income of
equity affiliates, net amount 2,464 451
Other (1) -
Tax effect (1,059) (57)
ITEMS POTENTIALLY RECLASSIFIABLE TO PROFIT
AND LOSS 7,968 2,247
TOTAL OTHER COMPREHENSIVE INCOME (NET
AMOUNT) 976 (324)
COMPREHENSIVE INCOME 11,831 5,387
-- TotalEnergies share 11,658 5,212
-- Non-controlling interests 173 175
2.4 Consolidated statement of income -- quarterly
TotalEnergies
(unaudited)
(M$)(a) 2(nd) quarter 2022 1(st) quarter 2022 2(nd) quarter 2021
Sales 74,774 68,606 47,049
Excise taxes (4,329) (4,656) (5,416)
Revenues from
sales 70,445 63,950 41,633
Purchases, net of
inventory
variation (45,443) (39,648) (26,719)
Other operating
expenses (8,041) (7,623) (6,717)
Exploration costs (117) (861) (123)
Depreciation,
depletion and
impairment of
tangible assets
and mineral
interests (3,102) (3,679) (3,121)
Other income 429 143 223
Other expense (1,305) (2,290) (298)
Financial interest
on debt (572) (462) (501)
Financial income
and expense from
cash & cash
equivalents 245 214 77
Cost of net debt (327) (248) (424)
Other financial
income 231 203 265
Other financial
expense (136) (135) (131)
Net income (loss)
from equity
affiliates (1,546) 43 (680)
Income taxes (5,284) (4,804) (1,609)
CONSOLIDATED NET
INCOME 5,804 5,051 2,299
TotalEnergies
share 5,692 4,944 2,206
Non-controlling
interests 112 107 93
Earnings per share
($) 2.18 1.87 0.80
Fully-diluted
earnings per
share ($) 2.16 1.85 0.80
(a) Except for per share amounts.
2.5 Consolidated statement of comprehensive income --
quarterly
TotalEnergies
(unaudited)
(M$) 2(nd) quarter 2022 1(st) quarter 2022 2(nd) quarter 2021
CONSOLIDATED NET
INCOME 5,804 5,051 2,299
Other
comprehensive
income
Actuarial gains
and losses 204 - 449
Change in fair
value of
investments in
equity
instruments (20) 3 56
Tax effect (53) 11 (142)
Currency
translation
adjustment
generated by the
parent company (5,387) (1,750) 1,239
ITEMS NOT
POTENTIALLY
RECLASSIFIABLE TO
PROFIT AND LOSS (5,256) (1,736) 1,602
Currency
translation
adjustment 2,523 1,012 (746)
Cash flow hedge 3,222 (263) (424)
Variation of
foreign currency
basis spread 21 49 (4)
Share of other
comprehensive
income of equity
affiliates, net
amount 2,548 (84) (18)
Other (1) - (1)
Tax effect (1,112) 53 100
ITEMS POTENTIALLY
RECLASSIFIABLE TO
PROFIT AND LOSS 7,201 767 (1,093)
TOTAL OTHER
COMPREHENSIVE
INCOME (NET
AMOUNT) 1,945 (969) 509
COMPREHENSIVE
INCOME 7,749 4,082 2,808
-- TotalEnergies
share 7,705 3,953 2,670
-- Non-controlling
interests 44 129 138
2.6 Consolidated balance sheet
TotalEnergies
March 31,
June 30, 2022 2022 December 31, June 30, 2021
(M$) (unaudited) (unaudited) 2021 (unaudited)
ASSETS
Non-current
assets
Intangible
assets, net 37,020 32,504 32,484 33,359
Property, plant
and equipment,
net 101,454 104,450 106,559 106,791
Equity
affiliates:
investments and
loans 28,210 29,334 31,053 29,712
Other
investments 1,383 1,490 1,625 2,247
Non-current
financial
assets 1,612 1,490 2,404 3,778
Deferred income
taxes 4,737 5,299 5,400 6,578
Other
non-current
assets 3,075 3,033 2,797 2,800
TOTAL
NON-CURRENT
ASSETS 177,491 177,600 182,322 185,265
Current assets
Inventories, net 28,542 24,456 19,952 19,162
Accounts
receivable,
net 30,796 32,000 21,983 17,192
Other current
assets 55,553 50,976 35,144 17,585
Current
financial
assets 7,863 7,415 12,315 4,404
Cash and cash
equivalents 32,848 31,276 21,342 28,643
Assets
classified as
held for sale 313 856 400 456
TOTAL CURRENT
ASSETS 155,915 146,979 111,136 87,442
TOTAL ASSETS 333,406 324,579 293,458 272,707
LIABILITIES &
SHAREHOLDERS'
EQUITY
Shareholders'
equity
Common shares 8,163 8,137 8,224 8,224
Paid-in surplus
and retained
earnings 125,554 123,008 117,849 110,967
Currency
translation
adjustment (14,019) (13,643) (12,671) (11,087)
Treasury shares (3,010) (1,022) (1,666) (8)
TOTAL
SHAREHOLDERS'
EQUITY --
TOTALENERGIES
SHARE 116,688 116,480 111,736 108,096
Non-controlling
interests 3,309 3,375 3,263 2,480
TOTAL
SHAREHOLDERS'
EQUITY 119,997 119,855 114,999 110,576
Non-current
liabilities
Deferred income
taxes 12,169 11,281 10,904 10,596
Employee
benefits 2,341 2,610 2,672 3,305
Provisions and
other
non-current
liabilities 23,373 21,649 20,269 20,716
Non-current
financial debt 46,868 46,546 49,512 52,331
TOTAL
NON-CURRENT
LIABILITIES 84,751 82,086 83,357 86,948
Current
liabilities
Accounts payable 49,700 46,869 36,837 29,752
Other creditors
and accrued
liabilities 62,498 56,972 42,800 27,836
Current
borrowings 16,003 18,252 15,035 16,983
Other current
financial
liabilities 401 502 372 322
Liabilities
directly
associated with
the assets
classified as
held for sale 56 43 58 290
TOTAL CURRENT
LIABILITIES 128,658 122,638 95,102 75,183
TOTAL
LIABILITIES &
SHAREHOLDERS'
EQUITY 333,406 324,579 293,458 272,707
2.7 Consolidated statement of cash flow -- half-yearly
TotalEnergies
(unaudited)
(M$) 1(st) half 2022 1(st) half 2021
CASH FLOW FROM OPERATING ACTIVITIES
Consolidated net income 10,855 5,711
Depreciation, depletion, amortization and
impairment 7,899 6,760
Non-current liabilities, valuation
allowances and deferred taxes 3,965 331
(Gains) losses on disposals of assets (178) (370)
Undistributed affiliates' equity earnings 3,261 682
(Increase) decrease in working capital (2,425) (150)
Other changes, net 524 185
CASH FLOW FROM OPERATING ACTIVITIES 23,901 13,149
CASH FLOW USED IN INVESTING ACTIVITIES
Intangible assets and property, plant and
equipment additions (8,607) (5,085)
Acquisitions of subsidiaries, net of cash
acquired (82) (170)
Investments in equity affiliates and other
securities (225) (2,433)
Increase in non-current loans (519) (680)
Total expenditures (9,433) (8,368)
Proceeds from disposals of intangible assets
and property, plant and equipment 330 271
Proceeds from disposals of subsidiaries, net
of cash sold 151 229
Proceeds from disposals of non-current
investments 250 279
Repayment of non-current loans 1,342 301
Total divestments 2,073 1,080
CASH FLOW USED IN INVESTING ACTIVITIES (7,360) (7,288)
CASH FLOW USED IN FINANCING ACTIVITIES
Issuance (repayment) of shares:
-- Parent company shareholders 371 381
-- Treasury shares (3,164) (165)
Dividends paid:
-- Parent company shareholders (3,753) (4,184)
-- Non-controlling interests (119) (63)
Net issuance (repayment) of perpetual
subordinated notes - 3,248
Payments on perpetual subordinated notes (274) (234)
Other transactions with non-controlling
interests (5) (55)
Net issuance (repayment) of non-current debt 542 (839)
Increase (decrease) in current borrowings (2,046) (6,031)
Increase (decrease) in current financial
assets and liabilities 4,863 (215)
CASH FLOW FROM (USED IN) FINANCING
ACTIVITIES (3,585) (8,157)
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 12,956 (2,296)
Effect of exchange rates (1,450) (329)
Cash and cash equivalents at the beginning
of the period 21,342 31,268
CASH AND CASH EQUIVALENTS AT THE OF THE
PERIOD 32,848 28,643
2.8 Consolidated statement of cash flow -- quarterly
TotalEnergies
(unaudited)
(M$) 2(nd) quarter 2022 1(st) quarter 2022 2(nd) quarter 2021
CASH FLOW FROM
OPERATING
ACTIVITIES
Consolidated net
income 5,804 5,051 2,299
Depreciation,
depletion,
amortization and
impairment 3,321 4,578 3,287
Non-current
liabilities,
valuation
allowances and
deferred taxes 1,427 2,538 210
(Gains) losses on
disposals of
assets (165) (13) (85)
Undistributed
affiliates'
equity earnings 2,999 262 1,255
(Increase)
decrease in
working capital 2,498 (4,923) 669
Other changes, net 400 124 (84)
CASH FLOW FROM
OPERATING
ACTIVITIES 16,284 7,617 7,551
CASH FLOW USED IN
INVESTING
ACTIVITIES
Intangible assets
and property,
plant and
equipment
additions (5,150) (3,457) (2,675)
Acquisitions of
subsidiaries, net
of cash acquired (82) - (170)
Investments in
equity affiliates
and other
securities (136) (89) (307)
Increase in
non-current
loans (278) (241) (380)
Total expenditures (5,646) (3,787) (3,532)
Proceeds from
disposals of
intangible assets
and property,
plant and
equipment 153 177 45
Proceeds from
disposals of
subsidiaries, net
of cash sold 63 88 -
Proceeds from
disposals of
non-current
investments 35 215 216
Repayment of
non-current
loans 413 929 167
Total divestments 664 1,409 428
CASH FLOW USED IN
INVESTING
ACTIVITIES (4,982) (2,378) (3,104)
CASH FLOW USED IN
FINANCING
ACTIVITIES
Issuance
(repayment) of
shares:
-- Parent company
shareholders 371 - 381
-- Treasury shares (1,988) (1,176) -
Dividends paid:
-- Parent company
shareholders (1,825) (1,928) (2,094)
-- Non-controlling
interests (97) (22) (53)
Net issuance
(repayment) of
perpetual
subordinated
notes (1,958) 1,958 -
Payments on
perpetual
subordinated
notes (138) (136) (147)
Other transactions
with
non-controlling
interests (10) 5 -
Net issuance
(repayment) of
non-current debt 508 34 51
Increase
(decrease) in
current
borrowings (2,703) 657 (4,369)
Increase
(decrease) in
current financial
assets and
liabilities (731) 5,594 (67)
CASH FLOW FROM
(USED IN)
FINANCING
ACTIVITIES (8,571) 4,986 (6,298)
NET INCREASE
(DECREASE) IN
CASH AND CASH
EQUIVALENTS 2,731 10,225 (1,851)
Effect of exchange
rates (1,159) (291) 209
Cash and cash
equivalents at
the beginning of
the period 31,276 21,342 30,285
CASH AND CASH
EQUIVALENTS AT
THE OF THE
PERIOD 32,848 31,276 28,643
2.9 Consolidated statement of changes in shareholders'
equity
TotalEnergies
(unaudited)
Paid-in
surplus Shareholders'
and Currency equity -- Total
retained translation TotalEnergies Non-controlling shareholders'
(M$) Common shares issued earnings adjustment Treasury shares Share interests equity
Number Amount Number Amount
AS OF JANUARY
1, 2021 2,653,124,025 8,267 107,078 (10,256) (24,392,703) (1,387) 103,702 2,383 106,085
Net income of
the first
half 2021 - - 5,550 - - - 5,550 161 5,711
Other
comprehensive
income - - 485 (823) - - (338) 14 (324)
Comprehensive
Income - - 6,035 (823) - - 5,212 175 5,387
Dividend - - (4,189) - - - (4,189) (63) (4,252)
Issuance of
common
shares 10,589,713 31 350 - - - 381 - 381
Purchase of
treasury
shares - - - - (3,636,351) (165) (165) - (165)
Sale of
treasury
shares(a) - - (216) - 4,570,220 216 - - -
Share-based
payments - - 61 - - - 61 - 61
Share
cancellation (23,284,409) (74) (1,254) - 23,284,409 1,328 - - -
Net issuance
(repayment)
of perpetual
subordinated
notes - - 3,254 - - - 3,254 - 3,254
Payments on
perpetual
subordinated
notes - - (184) - - - (184) - (184)
Other
operations
with non-
controlling
interests - - 26 (6) - - 20 (20) -
Other items - - 6 (2) - - 4 5 9
AS OF JUNE 30,
2021 2,640,429,329 8,224 110,967 (11,087) (174,425) (8) 108,096 2,480 110,576
Net income of
the second
half 2021 - - 10,482 - - - 10,482 173 10,655
Other
comprehensive
income - - 506 (1,584) - - (1,078) (44) (1,122)
Comprehensive
Income - - 10,988 (1,584) - - 9,404 129 9,533
Dividend - - (4,011) - - - (4,011) (61) (4,072)
Issuance of
common shares - - - - - - - - -
Purchase of
treasury
shares - - - - (33,669,654) (1,658) (1,658) - (1,658)
Sale of
treasury
shares(a) - - - - 2,975 - - - -
Share-based
payments - - 82 - - - 82 - 82
Share
cancellation - - - - - - - - -
Net issuance
(repayment) of
perpetual
subordinated
notes - - - - - - - - -
Payments on
perpetual
subordinated
notes - - (184) - - - (184) - (184)
Other
operations
with non-
controlling
interests - - 4 - - - 4 709 713
Other items - - 3 - - - 3 6 9
AS OF DECEMBER
31, 2021 2,640,429,329 8,224 117,849 (12,671) (33,841,104) (1,666) 111,736 3,263 114,999
Net income of
the first
half 2022 - - 10,636 - - - 10,636 219 10,855
Other
comprehensive
income - - 2,370 (1,348) - - 1,022 (46) 976
Comprehensive
Income - - 13,006 (1,348) - - 11,658 173 11,831
Dividend - - (3,803) - - - (3,803) (119) (3,922)
Issuance of
common
shares 9,367,482 26 345 - - - 371 - 371
Purchase of
treasury
shares - - - - (58,458,536) (3,164) (3,164) - (3,164)
Sale of
treasury
shares(a) - - (315) - 6,168,197 315 - - -
Share-based
payments - - 157 - - - 157 - 157
Share
cancellation (30,665,526) (87) (1,418) - 30,665,526 1,505 - - -
Net issuance
(repayment)
of perpetual
subordinated
notes - - (44) - - - (44) - (44)
Payments on
perpetual
subordinated
notes - - (183) - - - (183) - (183)
Other
operations
with non-
controlling
interests - - 4 - - - 4 (9) (5)
Other items - - (44) - - - (44) 1 (43)
AS OF JUNE 30,
2022 2,619,131,285 8,163 125,554 (14,019) (55,465,917) (3,010) 116,688 3,309 119,997
(a) Treasury shares related to the performance share grants.
2.10 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE
FIRST SIX MONTHS 2022 (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, 2022, 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, 2022, are consistent with those used for the
financial statements at December 31, 2021. Since January 1, 2020,
the Company has early adopted the amendments to IFRS 7 and IFRS 9
relating to the interest rate benchmark reform phase II. In
particular, these amendments allow to maintain the hedge accounting
qualification of interest rate derivatives.
The preparation of financial statements in accordance with IFRS
for the closing as of June 30, 2022 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, 2021.
The interim consolidated financial statements are impacted by
the Russian-Ukrainian conflict described in paragraph 7 Other risks
and commitments. The Company has taken this environment into
account in its estimates and recorded in its accounts as of March
31, 2022, an impairment of $(4,095) million, concerning notably
Arctic LNG 2. As of June 30, 2022, TotalEnergies recorded in its
accounts a new $(3,513) million impairment charge related mainly to
the potential impact of international sanctions on the value of its
Novatek stake.
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
Integrated Gas, Renewables & Power
On February 28, 2022, TotalEnergies has successfully been named
a winner of maritime lease area OCS-A 0538 by the BOEM (Bureau of
Ocean Energy Management) in the New York Bight auction in United
States.
This bid for the development of an offshore wind farm off the
U.S. East Coast was won for a consideration of $795 million (100%)
by both TotalEnergies and EnBW.
Located up to 47 nautical miles (87 kilometers) from the coast,
the lease covers a 132 square miles (341 square kilometer) area
that could accommodate a generation capacity of at least 3 GW,
enough to provide power to about one million homes. The project is
expected to come online by 2028.
Exploration & Production
-- In January 2022, TotalEnergies has decided to initiate the contractual
process of withdrawing from the Yadana field and from MGTC in Myanmar,
both as operator and as shareholder, without any financial compensation
for TotalEnergies. As a result, TotalEnergies registered an impairment of
assets of $(201) million in operational result and of $(305) million in
TotalEnergies' share net result in the financial statements as of
December 31, 2021. This withdrawal became effective on 20 July 2022.
-- In February 2022, TotalEnergies announced its decision not to sanction
and so to withdraw from the North Platte deepwater project in the US Gulf
of Mexico. The decision not to continue with the project was taken as
TotalEnergies has better opportunities of allocation of its capital
within its global portfolio. An impairment of the project's assets has
been recorded in the consolidated financial statements of the first
quarter of 2022, for an amount of $(957) million in net income,
TotalEnergies' share.
-- In April 2022, TotalEnergies finalized the acquisition of the Atapu and
Sepia pre-salt oil fields offered by Brazil's National Agency of
Petroleum, Natural Gas and Biofuels (ANP) in the Transfer of Rights (ToR)
Surplus bidding round, that took place in December 2021. The details of
the acquisition are presented in Note 2.2 to the consolidated financial
statements.
2.2) Major business combinations
Exploration & production
Transfer of rights in the Atapu and Sepia fields in Brazil
On 26 April 2022, Petrobras transferred to TotalEnergies 22.5%
of the rights of the pre-salt Atapu oil field. Production started
in 2020 and has reached a plateau of 160,000 barrels per day with a
first Floating, Production, Storage and Offloading unit (FPSO). A
second FPSO is planned to be sanctioned, which would increase the
overall oil production of the field to around 350,000 b/d.
On 27 April 2022, Petrobras also transferred to TotalEnergies
28% of the rights of the pre-salt Sepia oil field. Production
started in 2021 and is targeting a plateau of 180,000 barrels per
day with a first Floating, Production, Storage and Offloading unit
(FPSO). A second FPSO is planned to be sanctioned, which would
increase the overall oil production of the field to around 350,000
b/d.
In accordance with IFRS 3, TotalEnergies is assessing the fair
value of identifiable acquired assets, liabilities and contingent
liabilities on the basis of available information. This assessment
will be finalised within 12 months following the acquisition
date.
2.3) Divestment projects
As of June 30, 2022, there is no material divestment project
recorded in "assets held for sale".
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 organization of the Company's activities is structured
around the four followings segments:
-- An Integrated Gas, Renewables & Power segment comprising integrated gas
(including LNG) and low carbon electricity businesses. It includes the
upstream and midstream LNG activity;
-- An Exploration & Production segment; Starting September 2021, it notably
includes the carbon neutrality activity that was previously reported in
the Integrated Gas, Renewables & Power segment;
-- 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.
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.
(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.
3.1) Information by business segment
Integrated
Gas, Exploration Refining Marketing
1(st) half 2022 Renewables & & &
(M$) & Power Production Chemicals Services Corporate Intercompany Total
External sales 22,575 4,672 66,069 50,056 8 - 143,380
Intersegment
sales 3,360 27,623 22,062 983 133 (54,161) -
Excise taxes - - (378) (8,607) - - (8,985)
Revenues from
sales 25,935 32,295 87,753 42,432 141 (54,161) 134,395
Operating
expenses (22,629) (11,468) (80,653) (40,294) (850) 54,161 (101,733)
Depreciation,
depletion and
impairment of
tangible assets
and mineral
interests (648) (4,773) (769) (514) (77) - (6,781)
Operating income 2,658 16,054 6,331 1,624 (786) - 25,881
Net income
(loss) from
equity
affiliates and
other items (1,677) (3,426) 505 56 179 - (4,363)
Tax on net
operating
income (554) (7,739) (1,391) (521) 97 - (10,108)
Net operating
income 427 4,889 5,445 1,159 (510) - 11,410
Net cost of net
debt (555)
Non-controlling
interests (219)
Net income --
TotalEnergies
share 10,636
Integrated
1(st) half 2022 Gas, Exploration Refining Marketing
(adjustments)(a) Renewables & & &
(M$) & Power Production Chemicals Services Corporate Intercompany Total
External sales (3) - - - - - (3)
Intersegment sales - - - - - - -
Excise taxes - - - - - - -
Revenues from
sales (3) - - - - - (3)
Operating expenses (723) (873) 1,722 641 (433) - 334
Depreciation,
depletion and
impairment of
tangible assets
and mineral
interestst (14) (539) - (33) (9) - (595)
Operating
income(b) (740) (1,412) 1,722 608 (442) - (264)
Net income (loss)
from equity
affiliates and
other items (4,497) (3,770) 169 (7) 106 - (7,999)
Tax on net
operating income 58 337 (326) (180) 98 - (13)
Net operating
income(b) (5,179) (4,845) 1,565 421 (238) - (8,276)
Net cost of net
debt - - - - - - 193
Non-controlling
interests - - - - - - (54)
Net income --
TotalEnergies
share - - - - - - (8,137)
(a) Adjustments include special items, inventory valuation
effect and the effect of changes in fair value.
(b) Of which inventory valuation effect
-- On operating income- 1,722 684
-- On net operating income- 1,597 503
Integrated
Gas, Exploration Refining Marketing
1(st) half 2022 Renewables & & &
(adjusted) (M$) & Power Production Chemicals Services Corporate Intercompany Total
External sales 22,578 4,672 66,069 50,056 8 - 143,383
Intersegment
sales 3,360 27,623 22,062 983 133 (54,161) -
Excise taxes - - (378) (8,607) - - (8,985)
Revenues from
sales 25,938 32,295 87,753 42,432 141 (54,161) 134,398
Operating
expenses (21,906) (10,595) (82,375) (40,935) (417) 54,161 (102,067)
Depreciation,
depletion and
impairment of
tangible assets
and mineral
interests (634) (4,234) (769) (481) (68) - (6,186)
Adjusted
operating
income 3,398 17,466 4,609 1,016 (344) - 26,145
Net income
(loss) from
equity
affiliates and
other items 2,820 344 336 63 73 - 3,636
Tax on net
operating
income (612) (8,076) (1,065) (341) (1) - (10,095)
Adjusted net
operating
income 5,606 9,734 3,880 738 (272) - 19,686
Net cost of net
debt (748)
Non-controlling
interests (165)
Adjusted net
income --
TotalEnergies
share 18,773
Integrated
Gas, Exploration Refining Marketing
1(st) half Renewables & & &
2022 (M$) & Power Production Chemicals Services Corporate Intercompany Total
Total
expenditures 2,311 6,099 561 428 34 - 9,433
Total
divestments 1,481 346 83 151 12 - 2,073
Cash flow
from
operating
activities 4,285 14,536 4,633 1,478 (1,031) - 23,901
Integrated
Gas, Exploration Refining Marketing
1(st) half 2021 Renewables & & &
(M$) & Power Production Chemicals Services Corporate Intercompany Total
External sales 10,588 3,257 40,054 36,880 7 - 90,786
Intersegment
sales 1,555 14,433 11,890 186 68 (28,132) -
Excise taxes - - (630) (9,890) - - (10,520)
Revenues from
sales 12,143 17,690 51,314 27,176 75 (28,132) 80,266
Operating
expenses (10,321) (7,352) (48,579) (25,510) (374) 28,132 (64,004)
Depreciation,
depletion and
impairment of
tangible assets
and mineral
interests (762) (4,317) (787) (526) (54) - (6,446)
Operating income 1,060 6,021 1,948 1,140 (353) - 9,816
Net income
(loss) from
equity
affiliates and
other items 682 (973) 211 23 (5) - (62)
Tax on net
operating
income (157) (2,375) (561) (352) 54 - (3,391)
Net operating
income 1,585 2,673 1,598 811 (304) - 6,363
Net cost of net
debt (652)
Non-controlling
interests (161)
Net income --
TotalEnergies
share 5,550
Integrated
1(st) half 2021 Gas, Exploration Refining Marketing
(adjustments)(a) Renewables & & &
(M$) & Power Production Chemicals Services Corporate Intercompany Total
External sales (44) - - - - - (44)
Intersegment sales - - - - - - -
Excise taxes - - - - - - -
Revenues from
sales (44) - - - - - (44)
Operating expenses (62) (23) 1,131 213 - - 1,259
Depreciation,
depletion and
impairment of
tangible assets
and mineral
interests (148) - (13) - - - (161)
Operating
income(b) (254) (23) 1,118 213 - - 1,054
Net income (loss)
from equity
affiliates and
other items (96) (1,482) 28 (43) (62) - (1,655)
Tax on net
operating income 59 (10) (302) (60) 2 - (311)
Net operating
income(b) (291) (1,515) 844 110 (60) - (912)
Net cost of net
debt - - - - - - 10
Non-controlling
interests - - - - - - (14)
Net income --
TotalEnergies
share - - - - - - (916)
(a) Adjustments include special items, inventory valuation
effect and the effect of changes in fair value.
(b) Of which inventory valuation effect
-- On operating income 1,140 206 -
-- On net operating income- 937 148 -
Integrated
Gas, Exploration Refining Marketing
1(st) half 2021 Renewables & & &
(adjusted) (M$) & Power Production Chemicals Services Corporate Intercompany Total
External sales 10,632 3,257 40,054 36,880 7 - 90,830
Intersegment
sales 1,555 14,433 11,890 186 68 (28,132) -
Excise taxes - - (630) (9,890) - - (10,520)
Revenues from
sales 12,187 17,690 51,314 27,176 75 (28,132) 80,310
Operating
expenses (10,259) (7,329) (49,710) (25,723) (374) 28,132 (65,263)
Depreciation,
depletion and
impairment of
tangible assets
and mineral
interests (614) (4,317) (774) (526) (54) - (6,285)
Adjusted
operating
income 1,314 6,044 830 927 (353) - 8,762
Net income
(loss) from
equity
affiliates and
other items 778 509 183 66 57 - 1,593
Tax on net
operating
income (216) (2,365) (259) (292) 52 - (3,080)
Adjusted net
operating
income 1,876 4,188 754 701 (244) - 7,275
Net cost of net
debt (662)
Non-controlling
interests (147)
Adjusted net
income --
TotalEnergies
share 6,466
Integrated
Gas, Exploration Refining Marketing
1(st) half Renewables & & &
2021 (M$) & Power Production Chemicals Services Corporate Intercompany Total
Total
expenditures 4,187 3,195 578 360 48 - 8,368
Total
divestments 452 374 129 107 18 - 1,080
Cash flow
from
operating
activities 1,347 8,571 3,228 1,102 (1,099) - 13,149
Integrated
Gas, Exploration Refining Marketing
2(nd) quarter Renewables & & &
2022 (M$) & Power Production Chemicals Services Corporate Intercompany Total
External sales 10,281 2,521 35,061 26,907 4 - 74,774
Intersegment
sales 1,889 13,805 12,785 716 70 (29,265) -
Excise taxes - - (186) (4,143) - - (4,329)
Revenues from
sales 12,170 16,326 47,660 23,480 74 (29,265) 70,445
Operating
expenses (10,997) (5,760) (43,242) (22,310) (557) 29,265 (53,601)
Depreciation,
depletion and
impairment of
tangible assets
and mineral
interests (327) (2,112) (389) (241) (33) - (3,102)
Operating income 846 8,454 4,029 929 (516) - 13,742
Net income
(loss) from
equity
affiliates and
other items 823 (3,668) 349 98 71 - (2,327)
Tax on net
operating
income (260) (3,876) (866) (296) (8) - (5,306)
Net operating
income 1,409 910 3,512 731 (453) - 6,109
Net cost of net
debt (305)
Non-controlling
interests (112)
Net income --
TotalEnergies
share 5,692
Integrated
2(nd) quarter 2022 Gas, Exploration Refining Marketing
(adjustments)(a) Renewables & & &
(M$) & Power Production Chemicals Services Corporate Intercompany Total
External sales (15) - - - - - (15)
Intersegment sales - - - - - - -
Excise taxes - - - - - - -
Revenues from
sales (15) - - - - - (15)
Operating expenses (606) (82) 775 373 (301) - 159
Depreciation,
depletion and
impairment of
tangible assets
and mineral
interests (14) (46) - (4) - - (64)
Operating
income(b) (635) (128) 775 369 (301) - 80
Net income (loss)
from equity
affiliates and
other items (558) (3,756) 52 (4) - - (4,266)
Tax on net
operating income 47 75 (75) (100) 78 - 25
Net operating
income(b) (1,146) (3,809) 752 265 (223) - (4,161)
Net cost of net
debt - - - - - - 80
Non-controlling
interests - - - - - - (23)
Net income --
TotalEnergies
share - - - - - - (4,104)
(a) Adjustments include special items, inventory valuation
effect and the effect of changes in fair value.
(b) Of which inventory valuation effect
-- On operating income 775 376 -
-- On net operating income- 752 275 -
Integrated
2(nd) quarter Gas, Exploration Refining Marketing
2022 (adjusted) Renewables & & &
(M$) & Power Production Chemicals Services Corporate Intercompany Total
External sales 10,296 2,521 35,061 26,907 4 - 74,789
Intersegment
sales 1,889 13,805 12,785 716 70 (29,265) -
Excise taxes - - (186) (4,143) - - (4,329)
Revenues from
sales 12,185 16,326 47,660 23,480 74 (29,265) 70,460
Operating
expenses (10,391) (5,678) (44,017) (22,683) (256) 29,265 (53,760)
Depreciation,
depletion and
impairment of
tangible assets
and mineral
interests (313) (2,066) (389) (237) (33) - (3,038)
Adjusted
operating
income 1,481 8,582 3,254 560 (215) - 13,662
Net income
(loss) from
equity
affiliates and
other items 1,381 88 297 102 71 - 1,939
Tax on net
operating
income (307) (3,951) (791) (196) (86) - (5,331)
Adjusted net
operating
income 2,555 4,719 2,760 466 (230) - 10,270
Net cost of net
debt (385)
Non-controlling
interests (89)
Adjusted net
income --
TotalEnergies
share 9,796
Integrated
Gas, Exploration Refining Marketing
2(nd) quarter Renewables & & &
2022 (M$) & Power Production Chemicals Services Corporate Intercompany Total
Total
expenditures 872 4,128 333 288 25 - 5,646
Total
divestments 466 63 56 72 7 - 664
Cash flow
from
operating
activities 3,970 8,768 3,526 580 (560) - 16,284
Integrated
Gas, Exploration Refining Marketing
2(nd) quarter Renewables & & &
2021 (M$) & Power Production Chemicals Services Corporate Intercompany Total
External sales 5,086 1,743 20,853 19,367 - - 47,049
Intersegment
sales 744 7,855 6,369 108 39 (15,115) -
Excise taxes - - (225) (5,191) - - (5,416)
Revenues from
sales 5,830 9,598 26,997 14,284 39 (15,115) 41,633
Operating
expenses (5,103) (4,284) (25,646) (13,434) (207) 15,115 (33,559)
Depreciation,
depletion and
impairment of
tangible assets
and mineral
interests (291) (2,134) (396) (271) (29) - (3,121)
Operating income 436 3,180 955 579 (197) - 4,953
Net income
(loss) from
equity
affiliates and
other items 419 (1,243) 123 57 23 - (621)
Tax on net
operating
income (56) (1,195) (281) (176) 16 - (1,692)
Net operating
income 799 742 797 460 (158) - 2,640
Net cost of net
debt (341)
Non-controlling
interests (93)
Net income --
TotalEnergies
share 2,206
Integrated
2(nd) quarter 2021 Gas, Exploration Refining Marketing
(adjustments)(a) Renewables & & &
(M$) & Power Production Chemicals Services Corporate Intercompany Total
External sales (9) - - - - - (9)
Intersegment sales - - - - - - -
Excise taxes - - - - - - -
Revenues from
sales (9) - - - - - (9)
Operating expenses (54) (23) 386 71 - - 380
Depreciation,
depletion and
impairment of
tangible assets
and mineral
interests (3) - (13) - - - (16)
Operating income
(b) (66) (23) 373 71 - - 355
Net income (loss)
from equity
affiliates and
other items (47) (1,436) 22 (8) (22) - (1,491)
Tax on net
operating income 21 (12) (109) (20) - - (120)
Net operating
income (b) (92) (1,471) 286 43 (22) - (1,256)
Net cost of net
debt 4
Non-controlling
interests (5)
Net income --
TotalEnergies
share (1,257)
(a) Adjustments include special items, inventory valuation
effect and the effect of changes in fair value.
(b) Of which inventory valuation effect
-- On operating income 394 69 -
-- On net operating income- 331 50 -
Integrated
2(nd) quarter Gas, Exploration Refining Marketing
2021 (adjusted) Renewables & & &
(M$) & Power Production Chemicals Services Corporate Intercompany Total
External sales 5,095 1,743 20,853 19,367 - - 47,058
Intersegment
sales 744 7,855 6,369 108 39 (15,115) -
Excise taxes - - (225) (5,191) - - (5,416)
Revenues from
sales 5,839 9,598 26,997 14,284 39 (15,115) 41,642
Operating
expenses (5,049) (4,261) (26,032) (13,505) (207) 15,115 (33,939)
Depreciation,
depletion and
impairment of
tangible assets
and mineral
interests (288) (2,134) (383) (271) (29) - (3,105)
Adjusted
operating
income 502 3,203 582 508 (197) - 4,598
Net income
(loss) from
equity
affiliates and
other items 466 193 101 65 45 - 870
Tax on net
operating
income (77) (1,183) (172) (156) 16 - (1,572)
Adjusted net
operating
income 891 2,213 511 417 (136) - 3,896
Net cost of net
debt (345)
Non-controlling
interests (88)
Adjusted net
income --
TotalEnergies
share 3,463
Integrated
Gas, Exploration Refining Marketing
2(nd) quarter Renewables & & &
2021 (M$) & Power Production Chemicals Services Corporate Intercompany Total
Total
expenditures 1,167 1,830 291 222 22 - 3,532
Total
divestments 310 63 13 36 6 - 428
Cash flow
from
operating
activities 567 4,835 2,232 437 (520) - 7,551
3.2) Reconciliation of the information by business segment with
consolidated financial statements
Consolidated statement of
1(st) half 2022 (M$) Adjusted Adjustments(a) income
Sales 143,383 (3) 143,380
Excise taxes (8,985) - (8,985)
Revenues from sales 134,398 (3) 134,395
Purchases net of
inventory variation (86,785) 1,694 (85,091)
Other operating expenses (15,029) (635) (15,664)
Exploration costs (253) (725) (978)
Depreciation, depletion
and impairment of
tangible assets and
mineral interests (6,186) (595) (6,781)
Other income 550 22 572
Other expense (798) (2,797) (3,595)
Financial interest on
debt (1,034) - (1,034)
Financial income and
expense from cash & cash
equivalents 189 270 459
Cost of net debt (845) 270 (575)
Other financial income 350 84 434
Other financial expense (271) - (271)
Net income (loss) from
equity affiliates 3,805 (5,308) (1,503)
Income taxes (9,998) (90) (10,088)
Consolidated net income 18,938 (8,083) 10,855
TotalEnergies share 18,773 (8,137) 10,636
Non-controlling interests 165 54 219
(a) Adjustments include special items, inventory valuation
effect and the effect of changes in fair value.
Consolidated statement of
1(st) half 2021 (M$) Adjusted Adjustments(a) income
Sales 90,830 (44) 90,786
Excise taxes (10,520) - (10,520)
Revenues from sales 80,310 (44) 80,266
Purchases net of
inventory variation (51,397) 1,280 (50,117)
Other operating expenses (13,576) (21) (13,597)
Exploration costs (290) - (290)
Depreciation, depletion
and impairment of
tangible assets and
mineral interests (6,285) (161) (6,446)
Other income 554 27 581
Other expense (334) (623) (957)
Financial interest on
debt (967) - (967)
Financial income and
expense from cash & cash
equivalents 156 16 172
Cost of net debt (811) 16 (795)
Other financial income 374 - 374
Other financial expense (261) - (261)
Net income (loss) from
equity affiliates 1,260 (1,059) 201
Income taxes (2,931) (317) (3,248)
Consolidated net income 6,613 (902) 5,711
TotalEnergies share 6,466 (916) 5,550
Non-controlling interests 147 14 161
(a) Adjustments include special items, inventory valuation
effect and the effect of changes in fair value.
Consolidated statement of
2nd quarter 2022 (M$) Adjusted Adjustments(a) income
Sales 74,789 (15) 74,774
Excise taxes (4,329) - (4,329)
Revenues from sales 70,460 (15) 70,445
Purchases net of
inventory variation (46,023) 580 (45,443)
Other operating expenses (7,620) (421) (8,041)
Exploration costs (117) - (117)
Depreciation, depletion
and impairment of
tangible assets and
mineral interests (3,038) (64) (3,102)
Other income 429 - 429
Other expense (529) (776) (1,305)
Financial interest on
debt (572) - (572)
Financial income and
expense from cash & cash
equivalents 130 115 245
Cost of net debt (442) 115 (327)
Other financial income 231 - 231
Other financial expense (136) - (136)
Net income (loss) from
equity affiliates 1,944 (3,490) (1,546)
Income taxes (5,274) (10) (5,284)
Consolidated net income 9,885 (4,081) 5,804
TotalEnergies share 9,796 (4,104) 5,692
Non-controlling interests 89 23 112
(a) Adjustments include special items, inventory valuation
effect and the effect of changes in fair value.
Consolidated statement of
2(nd) quarter 2021 (M$) Adjusted Adjustments(a) income
Sales 47,058 (9) 47,049
Excise taxes (5,416) - (5,416)
Revenues from sales 41,642 (9) 41,633
Purchases net of
inventory variation (27,108) 389 (26,719)
Other operating expenses (6,708) (9) (6,717)
Exploration costs (123) - (123)
Depreciation, depletion
and impairment of
tangible assets and
mineral interests (3,105) (16) (3,121)
Other income 138 85 223
Other expense (142) (156) (298)
Financial interest on
debt (501) - (501)
Financial income and
expense from cash & cash
equivalents 69 8 77
Cost of net debt (432) 8 (424)
Other financial income 265 - 265
Other financial expense (131) - (131)
Net income (loss) from
equity affiliates 740 (1,420) (680)
Income taxes (1,485) (124) (1,609)
Consolidated net income 3,551 (1,252) 2,299
TotalEnergies share 3,463 (1,257) 2,206
Non-controlling interests 88 5 93
(a) Adjustments include special items, inventory valuation
effect and the effect of changes in fair value.
3.3) Adjustment items
The main adjustment items in the first half of 2022 are the
following exceptional impairments and provisions related to the
Russian-Ukrainian conflict:
-- In the first quarter, an impairment of $(4,095) million in net result
concerning notably Arctic LNG 2.
-- In the second quarter, an impairment of $(3,513) million in net result
related to the potential impact of international sanctions on the value
of Novatek stake.
The detail of the adjustment items is presented in the table
below.
Adjustments to operating income
Integrated
Gas, Exploration Refining Marketing
Renewables & & &
(M$) & Power Production Chemicals Services Corporate Total
2(nd) Inventory
quarter valuation
2022 effect - - 775 376 - 1,151
Effect of changes in
fair value (597) - - - - (597)
Restructuring charges (17) - - - - (17)
Asset impairment and
provisions charges (18) (46) - 4 - (60)
Other items (3) (82) - (11) (301) (397)
TOTAL (635) (128) 775 369 (301) 80
2(nd) Inventory
quarter valuation
2021 effect - - 394 69 - 463
Effect of changes in
fair value (49) - - - - (49)
Restructuring charges (1) - (8) - - (9)
Asset impairment and
provisions charges (3) - (13) - - (16)
Other items (13) (23) - 2 - (34)
TOTAL (66) (23) 373 71 - 355
1(st) Inventory
half valuation
2022 effect - - 1,722 684 - 2,406
Effect of changes in
fair value (685) - - - - (685)
Restructuring charges (22) - - - - (22)
Asset impairment and
provisions charges (18) (1,330) - (65) (9) (1,422)
Other items (15) (82) - (11) (433) (541)
TOTAL (740) (1,412) 1,722 608 (442) (264)
1(st) Inventory
half valuation
2021 effect - - 1,140 206 - 1,346
Effect of changes in
fair value (58) - - - - (58)
Restructuring charges (10) - (8) - - (18)
Asset impairment and
provisions charges (148) - (13) - - (161)
Other items (38) (23) (1) 7 - (55)
TOTAL (254) (23) 1,118 213 - 1,054
Adjustments to net income, TotalEnergies share
Integrated
Gas, Exploration Refining Marketing
Renewables & & &
(M$) & Power Production Chemicals Services Corporate Total
2(nd) Inventory
quarter valuation
2022 effect - - 738 255 - 993
Effect of changes in
fair value (551) - - - - (551)
Restructuring charges (8) - - - - (8)
Asset impairment and
provisions charges (226) (3,493) - - - (3,719)
Gains (losses)
on disposals
of assets - - - - - -
Other items (352) (286) - (8) (173) (819)
TOTAL (1,137) (3,779) 738 247 (173) (4,104)
2(nd) Inventory
quarter valuation
2021 effect - - 327 48 - 375
Effect of changes in
fair value (44) - - - - (44)
Restructuring charges (4) (44) (32) (8) (22) (110)
Asset impairment and
provisions charges (36) - (13) - - (49)
Gains (losses) on
disposals of assets - (1 379)* - - - (1,379)
Other items (7) (44) - 1 - (50)
TOTAL (91) (1,467) 282 41 (22) (1,257)
1(st) Inventory
half valuation
2022 effect - - 1,573 460 - 2,033
Effect of changes in
fair value (631) - - - - (631)
Restructuring charges (11) - - - - (11)
Asset impairment and
provisions charges (4,174) (4,525) - (72) (9) (8,780)
Gains (losses)
on disposals
of assets - - - - - -
Other items (352) (272) (32) (8) (84) (748)
TOTAL (5,168) (4,797) 1,541 380 (93) (8,137)
1(st) Inventory
half valuation
2021 effect - - 926 138 - 1,064
Effect of changes in
fair value (50) - - - - (50)
Restructuring charges (12) (85) (71) (43) (60) (271)
Asset impairment and
provisions charges (180) - (13) - - (193)
Gains (losses) on
disposals of assets - (1 379)* - - - (1,379)
Other items (42) (41) (9) 5 - (87)
TOTAL (284) (1,505) 833 100 (60) (916)
* Impact of the TotalEnergies' interest sale of Petrocedeño to
PDVSA.
4) Shareholders' equity
Treasury shares (TotalEnergies shares held directly by
TotalEnergies SE)
December 31, 2021 June 30, 2022
Number of treasury shares 33,841,104 55,465,917
Percentage of share capital 1.28% 2.12%
of which shares acquired with the intention
to cancel them 30,665,526 55,260,084
of which shares allocated to TotalEnergies
share performance plans for Company
employees 3,103,018 99,850
of which shares intended to be allocated to
new share performance or purchase options
plans 72,560 105,983
Dividend
The Shareholders' meeting of May 25, 2022 approved the
distribution of a dividend of 2.64 euros per share for the 2021
fiscal year and the payment of a final dividend of 0.66 euro per
share given the three interim dividends that had already been paid.
The dividend for fiscal year 2021 was paid according to the
following timetable:
Dividend 2021 First interim Second interim Third interim Final
Amount EUR 0.66 EUR 0.66 EUR 0.66 EUR 0.66
Set date April 28, 2021 July 28, 2021 October 27, May 25, 2022
2021
Ex-dividend September 21, January 3, March 22, 2022 June 21, 2022
date 2021 2022
Payment date October 1, January 13, April 1, 2022 July 1, 2022
2021 2022
The Board of Directors of April 27, 2022 decided to increase
interim dividends by 5% and consequently set the first interim
dividend for the fiscal year 2022 at EUR0.69 per share. The
ex-dividend date of this interim dividend will be September 21,
2022 and it will be paid in cash on October 3, 2022.
Furthermore, the Board of Directors of July 27, 2022 decided to
set the amount of the second interim dividend for the 2022 fiscal
year at 0.69 euro per share, i.e an amount equal to the
aforementioned first interim dividend. The ex-dividend date of the
second interim dividend will be January 2, 2023 and it will be paid
in cash on January 12, 2023.
Dividend 2022 First interim Second interim
Amount EUR 0.69 EUR 0.69
Set date April 27, 2022 July 27, 2022
Ex-dividend date September 21, 2022 January 2, 2023
Payment date October 3, 2022 January 12, 2023
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 EUR2.03 per share for the 2nd
quarter 2022 (EUR1.67 per share for the 1st quarter 2022 and
EUR0.66 per share for the 2nd quarter 2021). Diluted earnings per
share calculated using the same method amounted to EUR2.03 per
share for the 2nd quarter 2022 (EUR1.65 per share for the 1st
quarter 2022 and EUR0.66 per share for the 2nd quarter 2021).
Earnings per share are calculated after remuneration of
perpetual subordinated notes.
Perpetual subordinated notes
On January 17, 2022, TotalEnergies SE issued perpetual
subordinated notes:
-- Perpetual subordinated notes 2.000% callable in April 2027, or in
anticipation in January 2027 (EUR1,000 million); and
-- Perpetual subordinated notes 3.250% callable in January 2037, or in
anticipation in July 2036 (EUR750 million).
On May 18, 2022, TotalEnergies SE fully reimbursed the residual
nominal amount of EUR1,750 million of its perpetual subordinated
notes 3.875% issued in May 2016, on their first call date.
Other comprehensive income
Detail of other comprehensive income is presented in the table
below:
(M$) 1(st) half 2022 1(st) half 2021
Actuarial gains and losses 204 449
Change in fair value of investments in
equity instruments (17) 68
Tax effect (42) (154)
Currency translation adjustment generated by
the parent company (7,137) (2,934)
Sub-total items not potentially
reclassifiable to profit and loss (6,992) (2,571)
Currency translation adjustment 3,535 1,777
-- Unrealized gain/(loss) of the period 3,532 1,898
-- Less gain/(loss) included in net income (3) 121
Cash flow hedge 2,959 80
-- Unrealized gain/(loss) of the period 2,901 (56)
-- Less gain/(loss) included in net income (58) (136)
Variation of foreign currency basis spread 70 (4)
-- Unrealized gain/(loss) of the period 49 (29)
-- Less gain/(loss) included in net income (21) (25)
Share of other comprehensive income of
equity affiliates, net amount 2,464 451
-- Unrealized gain/(loss) of the period 2,427 449
-- Less gain/(loss) included in net income (37) (2)
Other (1) -
Tax effect (1,059) (57)
Sub-total items potentially reclassifiable
to profit and loss 7,968 2,247
Total other comprehensive income, net amount 976 (324)
Tax effects relating to each component of other comprehensive
income are as follows:
(M$) 1(st) half 2022 1(st) half 2021
Pre-tax Tax Net Pre-tax Tax Net
amount effect amount amount effect amount
Actuarial gains
and losses 204 (53) 151 449 (141) 308
Change in fair
value of
investments in
equity
instruments (17) 11 (6) 68 (13) 55
Currency
translation
adjustment
generated by
the parent
company (7,137) - (7,137) (2,934) - (2,934)
Sub-total items
not
potentially
reclassifiable
to profit and
loss (6,950) (42) (6,992) (2,417) (154) (2,571)
Currency
translation
adjustment 3,535 - 3,535 1,777 - 1,777
Cash flow hedge 2,959 (1,041) 1,918 80 (55) 25
Variation of
foreign
currency basis
spread 70 (18) 52 (4) (2) (6)
Share of other
comprehensive
income of
equity
affiliates,
net amount 2,464 - 2,464 451 - 451
Other (1) - (1) - - -
Sub-total items
potentially
reclassifiable
to profit and
loss 9,027 (1,059) 7,968 2,304 (57) 2,247
Total other
comprehensive
income 2,077 (1,101) 976 (113) (211) (324)
5) Financial debt
The Company has not issued any new senior bond during the first
six months of 2022.
The Company reimbursed three senior bonds during the first six
months of 2022:
-- Bond 2.875% issued by TotalEnergies Capital International in 2012 and
maturing in February 2022 ($1,000 million)
-- Bond 1.125% issued by TotalEnergies Capital Canada in 2014 and maturing
in March 2022 (EUR1,000 million)
-- Bond 2.250% issued by TotalEnergies Capital International in 2015 and
maturing in June 2022 (GBP400 million).
On March 4, 2022, the Company put in place a committed
syndicated credit line with banks for an amount of $8,000 million
and with a 12-month tenor (with the option to extend its maturity
twice by a further 6 months at TotalEnergies SE' hand).
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 2022.
The impact of the Russian-Ukrainian conflict on transactions
with related parties in Russia is described in paragraph 7 Other
risks and commitments.
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 39.62%, to stop its commercial
production and export of LNG and to declare force majeure to its
various stakeholders in 2015. The plant has been put in
preservation mode.
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.
Russian-Ukrainian conflict
Since the month of February 2022, Russia's invasion of Ukraine
led European and American authorities to adopt several sets of
sanctions measures targeting Russian and Belarusian persons and
entities, as well as the financial sector.
TotalEnergies holds investments in this country in major LNG
projects (Yamal LNG and Arctic LNG 2) both directly and through its
holding in the company PAO Novatek, whose production and sale of
LNG are not materially impacted by the sanctions adopted as of the
date hereof.
Depending on the developments of the Russian-Ukrainian conflict
and the measures that the European and American authorities could
be required to take, the activities of TotalEnergies in Russia
could be affected in the future.
TotalEnergies announced on March 1, 2022, that it condemned
Russia's military aggression against Ukraine, and that sanctions
will be implemented by the Company regardless of the consequences
on its asset management.
On March 22, 2022, TotalEnergies announced that, given the
uncertainty created by the technological and financial sanctions on
the ability to carry out the Arctic LNG 2 project currently under
construction and their probable tightening with the worsening
conflict, TotalEnergies SE had decided to no longer book proved
reserves for the Arctic LNG 2 project.
Since then, on April 8,2022, new sanctions have effectively been
adopted by the European authorities, notably prohibiting export
from European Union countries of goods and technology for use in
the liquefaction of natural gas benefitting a Russian company. It
appears that these new prohibitions constitute additional risks on
the execution of the Arctic LNG 2 project.
As a result, TotalEnergies recorded, in its accounts as of March
31, 2022, an impairment of $(4,095) million, concerning notably
Arctic LNG 2. As of June 30, 2022, TotalEnergies recorded in its
accounts a new $(3,513) million impairment charge related mainly to
the potential impact of international sanctions on the value of its
Novatek stake. In this context, indications of impairment were
identified, and an impairment test to determine the value in use
based on future cash flows was performed, taking into account
assumptions reflecting the impact of sanctions on future cash
flows.
The table below presents the contribution of Russian assets to
the key income and cash flow indicators:
2(nd) quarter 1(st) quarter 1(st) half
Russian Upstream Assets (M$) 2022 2022 2022 2021
Adjusted net operating income 707 1,021 1,727 2,092
Operating cash flow before
working capital changes(1) 857 288 1,144 1,613
Capital Employed(2) by TotalEnergies in Russia as at June 30,
2022 was $8,760 million, after taking into account the $(3,513)
million impairment and the impact of the evolution of the
ruble/dollar exchange rate between March 31, 2022 and June 30,
2022, which leads to a $2,066 million revaluation of Capital
Employed on the balance sheet as at June 30, 2022.
8) Subsequent events
There are no post-balance sheet events that could have a
material impact on the Company's financial statements.
(1) 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 iGRP's contracts and including capital gain from
renewable projects sales.
(2) Capital Employed consists of non-current assets and working
capital, at replacement cost, net of deferred income taxes and
non-current liabilities.
TotalEnergies SE Financial report first half 2022
Registered office: Published in July 2022
2, place Jean Millier -- La Défense Produced by Acolad France
692400
Courbevoie -- France
Reception:+33 (0)1 47 44 45 46 Investor
Relations:+44 (0)1 47 44 46 46 North
American Investor Relations:+1 (173)
483-5070
Share capital:EUR6,547,828,212.50542 051
180 RCS Nanterre
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CONTACT:
TotalEnergies SE
SOURCE: TOTALENERGIES SE
Copyright Business Wire 2022
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