REG-TOTALENERGIES SE Half-year Report
29/07/2022 16:00
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Half-year Report
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
€ : 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
m³ = 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 ≈ 0.405 hectares
1 b = 42 gallons US ≈ 159 liters
1 b/d of crude oil ≈ 50 t/y of crude oil
1 km ≈ 0.62 miles
1 m³ ≈ 35.3 cf
1 Mt de LNG ≈ 48 Bcf of gas
1 Mt/y of LNG ≈ 131 Mcf/d of gas
1 t of oil ≈ 7.5 b of oil (assuming a specific gravity of 37° API)
1 boe = 1 b of crude oil ≈ 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 (15°C 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
€100 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
* $50 million contribution in the Tropical Asia Forest Fund 2 to invest in
sustainable forestry projects in Southeast Asia
* Start-up of the "3D" carbon capture industrial pilot at the ArcelorMittal site
in Dunkirk
* Acquired a 49% stake in Compagnie des Bois du Gabon to develop natural carbon
sinks
* Launched a CO2 capture project to decarbonize Cameron LNG's production in the
U.S
(1) Certain transactions referred to in the highlights are subject to approval
by authorities or to conditions as per the agreements.
1.2 Key figures from TotalEnergies’ consolidated financial statements((1))
In millions of dollars, except effective tax rate, earnings per share and 1H22 1H21 1H22 vs 1H21
number of shares
Adjusted EBITDA((2)) 36,161 16,837 x2.1
Adjusted net operating income from business segments 19,958 7,519 x2.7
Exploration & Production 9,734 4,188 x2.3
Integrated Gas, Renewables & Power 5,606 1,876 x3
Refining & Chemicals 3,880 754 x5.1
Marketing & Services 738 701 +5%
Contribution of equity affiliates to adjusted net income 3,805 1,260 x3
Effective tax rate((3)) 39.0% 34.4%
Adjusted net income (TotalEnergies share) 18,773 6,466 x2.9
Adjusted fully-diluted earnings per share (dollars)((4)) 7.14 2.38 x3
Adjusted fully-diluted earnings per share (euros)* 6.53 1.97 x3.3
Fully-diluted weighted-average shares (millions) 2,602 2,644 -2%
Net income (TotalEnergies share) 10,636 5,550 +92%
Organic investments((5)) 4,800 5,181 -7%
Net acquisitions((6)) 2,998 1,986 +51%
Net investments((7)) 7,798 7,167 +9%
Operating cash flow before working capital changes((8)) 24,859 11,718 x2.1
Operating cash flow before working capital changes w/o financial charges 25,626 12,511 x2
(DACF)((9))
Cash flow from operations 23,901 13,149 +82%
* Average €-$ 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.
In millions of dollars July 1, April 1, July 1,
2021June 30,
2021March
2020June 30,
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.
In millions of dollars July 1, April 1, July 1,
2021June 30,
2021March 31,
2020June 30,
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 €3,702 million in
the first half 2022 compared to €4,568 in the first half 2021.
1.7 2022 Sensitivities*
Change Estimated impact on adjusted net operating income Estimated impact on cash flow from operations
Dollar +/- 0.1 $ per € -/+ 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 $-€ 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
Adjusted net Operating Adjusted net Operating
operating
cash flow
operating
cash flow
income
before
income
before
working
working
capital
capital
changes
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 1H22 1H21
generation gross
capacity (GW)((1),(2))
Solar Onshore Wind Offshore Wind Other Total Solar Onshore Wind Offshore 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 1H22 1H21
capacity from
renewables in
construction (GW)((1),(2))
Solar Onshore Wind Offshore Wind Other Total Solar Onshore Wind Offshore 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 1H22 1H21
capacity from
renewables in
development (GW)((1),(2))
Solar Onshore Wind Offshore Wind Other Total Solar Onshore Wind Offshore 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 In operation In construction In development
capacity covered by
PPA at 06/30/2022
(GW)
Solar Onshore Wind Offshore Wind Other Total Solar Onshore Wind Offshore Wind Other Total Solar Onshore Wind Offshore 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 In operation In construction In development
06/30/2022 ($/MWh)
Solar Onshore Wind Offshore Wind Other Total Solar Onshore Wind Offshore Wind Other Total Solar Onshore Wind Offshore 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 6,186 6,285 -2%
interests
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 (6,186) (6,285) ns
interests
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 (609) (185) ns
affiliates
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 25,626 12,511 x2
(DACF)
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
In millions of dollars Integrated Gas, Renewables & Power Exploration & Production Refining & Chemicals Marketing & 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
In millions of dollars Integrated Gas, Renewables & Power Exploration & Production Refining & Chemicals Marketing & 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 (€-$) 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 N°
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 Pédron
Partner Partner Partner 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 (6,781) (6,446)
interests
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 (3,102) (3,679) (3,121)
interests
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$) 2(nd) quarter 2022 1(st) quarter 2022 2(nd) quarter 2021
CONSOLIDATED NET INCOME 5,804 5,051 2,299
Other comprehensive income
Actuarial gains and losses 204 - 449
Change in fair value of investments in equity instruments (20) 3 56
Tax effect (53) 11 (142)
Currency translation adjustment generated by the parent company (5,387) (1,750) 1,239
ITEMS NOT POTENTIALLY RECLASSIFIABLE TO PROFIT AND LOSS (5,256) (1,736) 1,602
Currency translation adjustment 2,523 1,012 (746)
Cash flow hedge 3,222 (263) (424)
Variation of foreign currency basis spread 21 49 (4)
Share of other comprehensive income of equity affiliates, net amount 2,548 (84) (18)
Other (1) - (1)
Tax effect (1,112) 53 100
ITEMS POTENTIALLY RECLASSIFIABLE TO PROFIT AND LOSS 7,201 767 (1,093)
TOTAL OTHER COMPREHENSIVE INCOME (NET AMOUNT) 1,945 (969) 509
COMPREHENSIVE INCOME 7,749 4,082 2,808
– TotalEnergies share 7,705 3,953 2,670
– Non-controlling interests 44 129 138
2.6 Consolidated balance sheet
TotalEnergies
(M$) June 30, 2022 (unaudited) March 31, 2022 (unaudited) December 31, 2021 June 30, 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 END 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 END OF THE PERIOD 32,848 31,276 28,643
2.9 Consolidated statement of changes in shareholders’ equity
TotalEnergies
(unaudited)
(M$) Common shares issued Paid-in Currency Treasury shares Shareholders’ Non-controlling interests Total
surplus and
translation
equity –
shareholders’
retained
adjustment
TotalEnergies
equity
earnings
Share
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 - - 3,254 - - - 3,254 - 3,254
perpetual subordinated notes
Payments on perpetual - - (184) - - - (184) - (184)
subordinated notes
Other operations with non- - - 26 (6) - - 20 (20) -
controlling interests
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 - - (184) - - - (184) - (184)
subordinated notes
Other operations with non- - - 4 - - - 4 709 713
controlling interests
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 - - (44) - - - (44) - (44)
perpetual subordinated notes
Payments on perpetual - - (183) - - - (183) - (183)
subordinated notes
Other operations with non- - - 4 - - - 4 (9) (5)
controlling interests
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
1(st) half 2022 Integrated Gas, Exploration Refining Marketing Corporate Intercompany Total
Renewables
&
&
&
(M$)
& Power
Production
Chemicals
Services
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 (648) (4,773) (769) (514) (77) - (6,781)
tangible assets and mineral interests
Operating income 2,658 16,054 6,331 1,624 (786) - 25,881
Net income (loss) from equity affiliates and other (1,677) (3,426) 505 56 179 - (4,363)
items
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
1(st) half 2022 (adjustments)((a)) Integrated Gas, Exploration Refining Marketing Corporate Intercompany Total
Renewables
&
&
&
(M$)
& Power
Production
Chemicals
Services
External sales (3) - - - - - (3)
Intersegment sales - - - - - - -
Excise taxes - - - - - - -
Revenues from sales (3) - - - - - (3)
Operating expenses (723) (873) 1,722 641 (433) - 334
Depreciation, depletion and impairment of (14) (539) - (33) (9) - (595)
tangible assets and mineral interestst
Operating income((b)) (740) (1,412) 1,722 608 (442) - (264)
Net income (loss) from equity affiliates and other (4,497) (3,770) 169 (7) 106 - (7,999)
items
Tax on net operating income 58 337 (326) (180) 98 - (13)
Net operating income((b)) (5,179) (4,845) 1,565 421 (238) - (8,276)
Net cost of net debt - - - - - - 193
Non-controlling interests - - - - - - (54)
Net income – TotalEnergies share - - - - - - (8,137)
(a) Adjustments include special items, inventory valuation effect and the
effect of changes in fair value.
(b) Of which inventory valuation effect
– On operating income- 1,722 684
– On net operating income- 1,597 503
1(st) half 2022 (adjusted) Integrated Gas, Exploration Refining Marketing Corporate Intercompany Total
Renewables
&
&
&
(M$)
& Power
Production
Chemicals
Services
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 (634) (4,234) (769) (481) (68) - (6,186)
tangible assets and mineral interests
Adjusted operating income 3,398 17,466 4,609 1,016 (344) - 26,145
Net income (loss) from equity affiliates and other 2,820 344 336 63 73 - 3,636
items
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
1(st) half 2022 Integrated Gas, Exploration Refining Marketing Corporate Intercompany Total
Renewables
&
&
&
(M$)
& Power
Production
Chemicals
Services
Total expenditures 2,311 6,099 561 428 34 - 9,433
Total divestments 1,481 346 83 151 12 - 2,073
Cash flow from operating activities 4,285 14,536 4,633 1,478 (1,031) - 23,901
1(st) half 2021 Integrated Gas, Exploration Refining Marketing Corporate Intercompany Total
Renewables
&
&
&
(M$)
& Power
Production
Chemicals
Services
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 (762) (4,317) (787) (526) (54) - (6,446)
tangible assets and mineral interests
Operating income 1,060 6,021 1,948 1,140 (353) - 9,816
Net income (loss) from equity affiliates and other 682 (973) 211 23 (5) - (62)
items
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
1(st) half 2021 (adjustments)((a)) Integrated Gas, Exploration Refining Marketing Corporate Intercompany Total
Renewables
&
&
&
(M$)
& Power
Production
Chemicals
Services
External sales (44) - - - - - (44)
Intersegment sales - - - - - - -
Excise taxes - - - - - - -
Revenues from sales (44) - - - - - (44)
Operating expenses (62) (23) 1,131 213 - - 1,259
Depreciation, depletion and impairment of (148) - (13) - - - (161)
tangible assets and mineral interests
Operating income((b)) (254) (23) 1,118 213 - - 1,054
Net income (loss) from equity affiliates and other (96) (1,482) 28 (43) (62) - (1,655)
items
Tax on net operating income 59 (10) (302) (60) 2 - (311)
Net operating income((b)) (291) (1,515) 844 110 (60) - (912)
Net cost of net debt - - - - - - 10
Non-controlling interests - - - - - - (14)
Net income – TotalEnergies share - - - - - - (916)
(a) Adjustments include special items, inventory valuation effect and the
effect of changes in fair value.
(b) Of which inventory valuation effect
– On operating income 1,140 206 -
– On net operating income- 937 148 -
1(st) half 2021 (adjusted) Integrated Gas, Exploration Refining Marketing Corporate Intercompany Total
Renewables
&
&
&
(M$)
& Power
Production
Chemicals
Services
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 (614) (4,317) (774) (526) (54) - (6,285)
tangible assets and mineral interests
Adjusted operating income 1,314 6,044 830 927 (353) - 8,762
Net income (loss) from equity affiliates and other 778 509 183 66 57 - 1,593
items
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
1(st) half 2021 Integrated Gas, Exploration Refining Marketing Corporate Intercompany Total
Renewables
&
&
&
(M$)
& Power
Production
Chemicals
Services
Total expenditures 4,187 3,195 578 360 48 - 8,368
Total divestments 452 374 129 107 18 - 1,080
Cash flow from operating activities 1,347 8,571 3,228 1,102 (1,099) - 13,149
2(nd) quarter 2022 Integrated Gas, Exploration Refining Marketing Corporate Intercompany Total
Renewables
&
&
&
(M$)
& Power
Production
Chemicals
Services
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 (327) (2,112) (389) (241) (33) - (3,102)
tangible assets and mineral interests
Operating income 846 8,454 4,029 929 (516) - 13,742
Net income (loss) from equity affiliates and other 823 (3,668) 349 98 71 - (2,327)
items
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
2(nd) quarter 2022 (adjustments)((a)) Integrated Gas, Exploration Refining Marketing Corporate Intercompany Total
Renewables
&
&
&
(M$)
& Power
Production
Chemicals
Services
External sales (15) - - - - - (15)
Intersegment sales - - - - - - -
Excise taxes - - - - - - -
Revenues from sales (15) - - - - - (15)
Operating expenses (606) (82) 775 373 (301) - 159
Depreciation, depletion and impairment of (14) (46) - (4) - - (64)
tangible assets and mineral interests
Operating income((b)) (635) (128) 775 369 (301) - 80
Net income (loss) from equity affiliates and other (558) (3,756) 52 (4) - - (4,266)
items
Tax on net operating income 47 75 (75) (100) 78 - 25
Net operating income((b)) (1,146) (3,809) 752 265 (223) - (4,161)
Net cost of net debt - - - - - - 80
Non-controlling interests - - - - - - (23)
Net income – TotalEnergies share - - - - - - (4,104)
(a) Adjustments include special items, inventory valuation effect and the
effect of changes in fair value.
(b) Of which inventory valuation effect
– On operating income 775 376 -
– On net operating income- 752 275 -
2(nd) quarter 2022 (adjusted) Integrated Gas, Exploration Refining Marketing Corporate Intercompany Total
Renewables
&
&
&
(M$)
& Power
Production
Chemicals
Services
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 (313) (2,066) (389) (237) (33) - (3,038)
tangible assets and mineral interests
Adjusted operating income 1,481 8,582 3,254 560 (215) - 13,662
Net income (loss) from equity affiliates and other 1,381 88 297 102 71 - 1,939
items
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
2(nd) quarter 2022 Integrated Gas, Exploration Refining Marketing Corporate Intercompany Total
Renewables
&
&
&
(M$)
& Power
Production
Chemicals
Services
Total expenditures 872 4,128 333 288 25 - 5,646
Total divestments 466 63 56 72 7 - 664
Cash flow from operating activities 3,970 8,768 3,526 580 (560) - 16,284
2(nd) quarter 2021 Integrated Gas, Exploration Refining Marketing Corporate Intercompany Total
Renewables
&
&
&
(M$)
& Power
Production
Chemicals
Services
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 (291) (2,134) (396) (271) (29) - (3,121)
tangible assets and mineral interests
Operating income 436 3,180 955 579 (197) - 4,953
Net income (loss) from equity affiliates and other 419 (1,243) 123 57 23 - (621)
items
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
2(nd) quarter 2021 (adjustments)((a)) Integrated Gas, Exploration Refining Marketing Corporate Intercompany Total
Renewables
&
&
&
(M$)
& Power
Production
Chemicals
Services
External sales (9) - - - - - (9)
Intersegment sales - - - - - - -
Excise taxes - - - - - - -
Revenues from sales (9) - - - - - (9)
Operating expenses (54) (23) 386 71 - - 380
Depreciation, depletion and impairment of (3) - (13) - - - (16)
tangible assets and mineral interests
Operating income ((b)) (66) (23) 373 71 - - 355
Net income (loss) from equity affiliates and other (47) (1,436) 22 (8) (22) - (1,491)
items
Tax on net operating income 21 (12) (109) (20) - - (120)
Net operating income( (b)) (92) (1,471) 286 43 (22) - (1,256)
Net cost of net debt 4
Non-controlling interests (5)
Net income – TotalEnergies share (1,257)
(a) Adjustments include special items, inventory valuation effect and the
effect of changes in fair value.
(b) Of which inventory valuation effect
– On operating income 394 69 -
– On net operating income- 331 50 -
2(nd) quarter 2021 (adjusted) Integrated Gas, Exploration Refining Marketing Corporate Intercompany Total
Renewables
&
&
&
(M$)
& Power
Production
Chemicals
Services
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 (288) (2,134) (383) (271) (29) - (3,105)
tangible assets and mineral interests
Adjusted operating income 502 3,203 582 508 (197) - 4,598
Net income (loss) from equity affiliates and other 466 193 101 65 45 - 870
items
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
2(nd) quarter 2021 Integrated Gas, Exploration Refining Marketing Corporate Intercompany Total
Renewables
&
&
&
(M$)
& Power
Production
Chemicals
Services
Total expenditures 1,167 1,830 291 222 22 - 3,532
Total divestments 310 63 13 36 6 - 428
Cash flow from operating activities 567 4,835 2,232 437 (520) - 7,551
3.2) Reconciliation of the information by business segment with consolidated
financial statements
1(st )half 2022 (M$) Adjusted Adjustments((a)) Consolidated statement of 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 (6,186) (595) (6,781)
interests
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.
1(st) half 2021 (M$) Adjusted Adjustments((a)) Consolidated statement of income
Sales 90,830 (44) 90,786
Excise taxes (10,520) - (10,520)
Revenues from sales 80,310 (44) 80,266
Purchases net of inventory variation (51,397) 1,280 (50,117)
Other operating expenses (13,576) (21) (13,597)
Exploration costs (290) - (290)
Depreciation, depletion and impairment of tangible assets and mineral (6,285) (161) (6,446)
interests
Other income 554 27 581
Other expense (334) (623) (957)
Financial interest on debt (967) - (967)
Financial income and expense from cash & cash equivalents 156 16 172
Cost of net debt (811) 16 (795)
Other financial income 374 - 374
Other financial expense (261) - (261)
Net income (loss) from equity affiliates 1,260 (1,059) 201
Income taxes (2,931) (317) (3,248)
Consolidated net income 6,613 (902) 5,711
TotalEnergies share 6,466 (916) 5,550
Non-controlling interests 147 14 161
(a) Adjustments include special items, inventory valuation effect and the
effect of changes in fair value.
2nd quarter 2022 (M$) Adjusted Adjustments((a)) Consolidated statement of 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 (3,038) (64) (3,102)
interests
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.
2(nd) quarter 2021 (M$) Adjusted Adjustments((a)) Consolidated statement of 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 (3,105) (16) (3,121)
interests
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 $(3,513) million in net result related
to the potential impact of international sanctions on the value of Novatek
stake.
The detail of the adjustment items is presented in the table below.
Adjustments to operating income
(M$) Integrated Exploration & Refining Marketing Corporate Total
Gas,
Production
&
&
Renewables
Chemicals
Services
& Power
2(nd) quarter 2022 Inventory valuation 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) quarter 2021 Inventory valuation 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) half 2022 Inventory valuation 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) half 2021 Inventory valuation 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
(M$) Integrated Exploration & Refining Marketing Corporate Total
Gas,
Production
&
&
Renewables
Chemicals
Services
& Power
2(nd) quarter 2022 Inventory valuation 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) quarter 2021 Inventory valuation 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) half 2022 Inventory valuation 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) half 2021 Inventory valuation 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 3,103,018 99,850
employees
of which shares intended to be allocated to new share performance or purchase 72,560 105,983
options plans
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 € 0.66 € 0.66 € 0.66 € 0.66
Set date April 28, 2021 July 28, 2021 October 27, 2021 May 25, 2022
Ex-dividend date September 21, 2021 January 3, 2022 March 22, 2022 June 21, 2022
Payment date October 1, 2021 January 13, 2022 April 1, 2022 July 1, 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 €0.69 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 € 0.69 € 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 €2.03 per share for the 2nd quarter 2022 (€1.67 per share for
the 1st quarter 2022 and €0.66 per share for the 2nd quarter 2021). Diluted
earnings per share calculated using the same method amounted to €2.03 per
share for the 2nd quarter 2022 (€1.65 per share for the 1st quarter 2022 and
€0.66 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 (€1,000 million); and
* Perpetual subordinated notes 3.250% callable in January 2037, or in
anticipation in July 2036 (€750 million).
On May 18, 2022, TotalEnergies SE fully reimbursed the residual nominal amount
of €1,750 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 amount Tax effect Net amount Pre-tax amount Tax effect Net amount
Actuarial gains and losses 204 (53) 151 449 (141) 308
Change in fair value of investments in (17) 11 (6) 68 (13) 55
equity instruments
Currency translation adjustment generated (7,137) - (7,137) (2,934) - (2,934)
by the parent company
Sub-total items not potentially (6,950) (42) (6,992) (2,417) (154) (2,571)
reclassifiable to profit and loss
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 2,464 - 2,464 451 - 451
equity affiliates, net amount
Other (1) - (1) - - -
Sub-total items potentially reclassifiable 9,027 (1,059) 7,968 2,304 (57) 2,247
to profit and loss
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 (€1,000 million)
* Bond 2.250% issued by TotalEnergies Capital International in 2015 and maturing
in June 2022 (£400 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 $(3,513) million
impairment charge related mainly to the potential impact of international
sanctions on the value of its Novatek stake. In this context, indications of
impairment were identified, and an impairment test to determine the value in
use based on future cash flows was performed, taking into account assumptions
reflecting the impact of sanctions on future cash flows.
The table below presents the contribution of Russian assets to the key income
and cash flow indicators:
Russian Upstream Assets (M$) 2(nd 1(st 1(st) half 2021
)quarter
)quarter
2022
2022
2022
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:€6,547,828,212.50542 051 180 RCS
Nanterre
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