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TotalEnergies: Third Quarter 2021 Results

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TotalEnergies benefits from favorable environment leveraging leading position in LNG to generate $4.8 billion adjusted net income and $8.4 billion cash flow

PARIS, October 28, 2021--(BUSINESS WIRE)--Regulatory News:

TotalEnergies SE (Paris:TTE) (LSE:TTE) (NYSE:TTE):

3Q21

Change
vs 3Q20

9M21

Change
vs 9M20

Oil price - Brent ($/b)

73.5

+71%

67.9

+65%

Average price of LNG ($/Mbtu)

9.1

x2.5

7.3

+51%

Variable cost margin - Refining Europe, VCM ($/t)

20.5

ns

12.3

-10%

Adjusted net income (TotalEnergies share)(1)

- in billions of dollars (B$)

4.8

x5.6

11.2

x4.1

- in dollars per share

1.76

x6.1

4.14

x4.3

Adjusted EBITDA(1) (B$)

11.2

x2.1

28.0

+76%

DACF(1) (B$)

8.4

+96%

20.9

+65%

Cash Flow from operations (B$)

5.6

+30%

18.8

x2.1

Net income (TotalEnergies share) of 4.6 B$ in 3Q21

Net-debt-to-capital ratio(2) of 17.7% at September 30, 2021 vs. 18.5% at June 30, 2021

Third interim dividend set at 0.66 €/share

The Board of Directors of TotalEnergies SE, meeting on October 27, 2021, under the Chairmanship of Chief Executive Officer Patrick Pouyanné, approved the Company's third quarter 2021 accounts. On the occasion, Patrick Pouyanné said:

"The global economic recovery, notably in Asia, drove all energy prices sharply higher in the third quarter due to the interconnection of energy systems. Gas prices in Asia and Europe, up more than 85% from the previous quarter, reached unprecedented levels, and oil prices gained 7%, continuing their steady year-long rise.

TotalEnergies reported adjusted net income of $4.8 billion, up 38% compared to the second quarter 2021, fully benefiting from its multi-energy model, and, particularly this quarter, from its position as a world leader in LNG. The Company generated cash flow (DACF) of $8.4 billion, up nearly 25% compared to the previous quarter, and adjusted EBITDA of $11.2 billion.

The integrated Gas Renewables & Power (iGRP) segment generated adjusted net income of $1.6 billion and cash flow of $1.7 billion, both new record highs, thanks to an outperformance of its trading activities, which leveraged its integrated worldwide LNG portfolio. The renewables and electricity activities continued to grow, with gross renewable electricity generation capacity reaching nearly 10 GW, thanks mainly to the addition of 1 GW during the quarter from India. The number of electricity customers grew to six million.

Exploration & Production, benefiting from a 2% production increase during the quarter, thanks to the evolution of OPEC+ quotas, and from higher Brent and natural gas prices, reported $2.7 billion of adjusted net operating income, up more than 20% from the previous quarter, and cash flow of $4.9 billion.

Downstream took advantage of petrochemical margins that remained high and of the improvement in refining margins in Europe, although impacted by the rise in energy costs. Marketing & Services confirmed its return to pre-crisis level results. The Downstream generated adjusted net operating income and cash flow that were up by approximately 10% over the quarter to $1 billion and $1.6 billion, respectively.

Maintaining discipline on investments, TotalEnergies reported net cash flow of $6.2 billion in the third quarter, covering the interim dividend of $2.1 billion and allowing it to continue to reduce its net debt, with gearing of 17.7% as of September 30, 2021. The return on equity was 12% over the past twelve months. Strong cash generation from oil and gas makes it possible to invest in profitable growth projects in renewables & electricity, and thus to build a sustainable multi-energy company, combining energy transition and shareholder returns.

The Board of Directors decided to distribute a third interim dividend for the 2021 financial year of €0.66/share and confirms the completion of $1.5 billion share repurchases in the fourth quarter 2021."

1. Highlights(3)

  • Signed major agreements in Iraq covering investments in four projects (gas treatment for electricity generation, solar power, optimization of an existing field, seawater treatment) for the sustainable development of natural resources in the Basra area

Sustainability

  • TotalEnergies contributed to energy transition dialog in view of COP26 with the publication of "Energy Panorama" and "TotalEnergies Energy Outlook 2021"

  • Methane emissions: deployed innovative technology developed by Qnergy to significantly reduce methane emissions and partnered with GHGSat to monitor methane emissions at sea by satellite

  • CCS: Aramis partnership with Shell, EBN and Gasunie, for the development of CO2 transport infrastructure for storage in depleted gas fields in the Netherlands

Renewables and Electricity

  • Adani Green Energy Limited (TotalEnergies 20%) acquired SB Energy India's portfolio of 5 GW of renewable power generation capacity in operation and under construction in India

  • Offshore wind:

    • Submitted bid with Green Investment Group (GIG) and RIDG for a 2 GW project in Scotland and study of associated industrial-scale green hydrogen project

    • Associations with Simply Blue Group for floating wind development in the U.S., and with GIG and Qair for floating wind development in France

  • Corporate PPA:

    • Renewable electricity sales contract of 50 GWh/year over 15 years with Air Liquide in Belgium

    • Partnership with Amazon to supply its data centers with renewable electricity (474 MW), in Europe and the U.S.

  • Electric mobility:

    • Mercedes-Benz entered as an equal partner with TotalEnergies and Stellantis in Automotive Cell Company (ACC), targeting at least 120 GWh EV battery manufacturing capacity by 2030

    • Acquired a network of 1500 EV charging stations in Singapore

    • Obtained concession for Antwerp's EV public charging network

    • Partnered with China Three Gorges Corporation to develop more than 11,000 EV fast-charging stations in Hubei Province, China

  • Hydrogen:

    • Launched with other industrial players the world's largest fund dedicated to the development of carbon-free hydrogen infrastructure, with an investment target of €1.5 billion

    • Agreement with Air Liquide for the development of low-carbon hydrogen production in the Normandy industrial basin, backed by technologies such as CCS and electrolysis

Upstream

  • Launched the fourth development phase of the giant Mero field in Brazil

Downstream

  • Expanded Synova in Normandy to double TotalEnergies' recycled plastics production capacity

  • Partnered with Safran in the field of decarbonization of the aviation sector

2. Key figures from TotalEnergies’ consolidated financial statements(4)

3Q21

2Q21

3Q20

3Q21
vs
3Q20

3Q19

3Q21
vs
3Q19

In millions of dollars, except effective tax rate,
earnings per share and number of shares

9M21

9M20

9M21
vs
9M20

11,180

8,667

5,321

x2.1

8,989

+24%

Adjusted EBITDA (5)

28,017

15,904

+76%

5,374

4,032

1,459

x3.7

3,673

+46%

Adjusted net operating income from business segments

12,893

4,580

x2.8

2,726

2,213

801

x3.4

1,734

+57%

Exploration & Production

6,914

1,295

x5.3

1,608

891

285

x5.6

574

x2.8

Integrated Gas, Renewables & Power

3,484

1,524

x2.3

602

511

(88)

ns

952

-37%

Refining & Chemicals

1,356

869

+56%

438

417

461

-5%

413

+6%

Marketing & Services

1,139

892

+28%

1,143

740

352

x3.2

521

x2.2

Contribution of equity affiliates to adjusted net income

2,403

1,021

x2.4

39.6%

34.3%

45.7%

30.7%

Effective tax rate (6)

36.6%

32.3%

4,769

3,463

848

x5.6

3,017

+58%

Adjusted net income (TotalEnergies share)

11,235

2,755

x4.1

1.76

1.27

0.29

x6.1

1.13

+56%

Adjusted fully-diluted earnings per share (dollars) (7)

4.14

0.97

x4.3

1.49

1.06

0.24

x6.2

1.01

+48%

Adjusted fully-diluted earnings per share (euros)*

3.46

0.86

x4

2,655

2,646

2,637

+1%

2,614

+2%

Fully-diluted weighted-average shares (millions)

2,648

2,612

+1%

4,645

2,206

202

x23

2,800

+66%

Net income (TotalEnergies share)

10,195

(8,133)

ns

* Average €-$ exchange rate: 1.1788 in the third quarter 2021 and 1.1962 in the first nine months 2021.

3. Key figures of environment, greenhouse gas emissions and production

3.1 Environment* – liquids and gas price realizations, refining margins

3Q21

2Q21

3Q20

3Q21
vs
3Q20

3Q19

3Q21
vs
3Q19

9M21

9M20

9M21
vs
9M20

73.5

69.0

42.9

+71%

62.0

+19%

Brent ($/b)

67.9

41.1

+65%

4.3

3.0

2.1

x2

2.3

+85%

Henry Hub ($/Mbtu)

3.3

1.9

+74%

16.9

8.7

2.9

x5.9

3.9

x4.3

NBP ($/Mbtu)

10.8

2.5

x4.3

18.6

10.0

3.6

x5.1

4.7

x4

JKM ($/Mbtu)

12.9

3.1

x4.2

67.1

62.9

39.9

+68%

58.0

+16%

Average price of liquids ($/b)
Consolidated subsidiaries

62.2

35.6

+75%

6.33

4.43

2.52

x2.5

3.48

+82%

Average price of gas ($/Mbtu)
Consolidated subsidiaries

4.95

2.84

+74%

9.10

6.59

3.57

x2.5

5.93

+53%

Average price of LNG ($/Mbtu)
Consolidated subsidiaries and equity affiliates

7.25

4.81

+51%

20.5

10.2

-2.7

ns

47.4

-57%

Variable cost margin - Refining Europe, VCM ($/t)**

12.3

13.6

-10%

* The indicators are shown on page 20
** 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) – 3Q21 data restated to reflect 2Q21 environment for energy costs.

The average LNG selling price increased by 38% this quarter compared to the previous quarter, benefiting on a lagged basis from the increase in the oil and gas price indexes on long-term contracts.

3.2 Greenhouse gas emissions(5)

3Q21*

2Q21*

GHG emissions (MtCO2e)

2020

2020
(excluding
Covid effect)

8

7

Scope 1+2 from operated oil & gas facilities (14)

35.8

39

81

77

Scope 3 from energies sales (15)

350

400

46

45

Scope 1+2+3 in Europe (16)

212

239

* Estimated emissions.

3.3 Production*

3Q21

2Q21

3Q20

3Q21
vs
3Q20

3Q19

3Q21
vs
3Q19

Hydrocarbon production

9M21

9M20

9M21
vs
9M20

2,814

2,747

2,715

+4%

3,040

-7%

Hydrocarbon production (kboe/d)

2,808

2,882

-3%

1,288

1,258

1,196

+8%

1,441

-11%

Oil (including bitumen) (kb/d)

1,272

1,319

-4%

1,526

1,489

1,519

-

1,599

-5%

Gas (including condensates and associated NGL) (kboe/d)

1,535

1,563

-2%

2,814

2,747

2,715

+4%

3,040

-7%

Hydrocarbon production (kboe/d)

2,808

2,882

-3%

1,517

1,464

1,437

+6%

1,720

-12%

Liquids (kb/d)

1,496

1,563

-4%

7,070

7,017

6,973

+1%

7,200

-2%

Gas (Mcf/d)

7,161

7,193

-

* Company production = E&P production + iGRP production

Hydrocarbon production was 2,814 thousand barrels of oil equivalent per day (kboe/d) in the third quarter 2021, up 4% year-on-year, comprised of:

  • +6% due to project start-ups and ramp-ups, including North Russkoye in Russia and Iara in Brazil, and the resumption of production in Libya,

  • +5% due to the increase in gas demand and OPEC+ production quotas,

  • -1% due to the price effect,

  • -3% due to planned maintenance and unplanned downtime, notably in Norway (Snøhvit)

  • -3% due to natural decline of fields.

Hydrocarbon production was 2,814 thousand barrels of oil equivalent per day (kboe/d) in the third quarter 2021, up 2% quarter-on-quarter, due to the end of summer maintenance programs and the increase in OPEC+ production quotas.

For the first nine months of 2021 hydrocarbon production was 2,808 kboe/d, down 3% year-on-year, comprised of:

  • +3% due to project start-ups and ramp-ups, including North Russkoye in Russia, Iara in Brazil and Johan Sverdrup in Norway, and the resumption of production in Libya,

  • +2% due to the increase in gas demand, particularly in Norway, and OPEC+ production quotas,

  • -1% due to portfolio effect, in particular the disposals of assets in the United Kingdom and the CA1 block in Brunei,

  • -1% due to the price effect,

  • -3% due planned maintenance and unplanned downtime, notably in the United Kingdom and Norway (Snøhvit),

  • -3% due to natural decline of fields.

4. Analysis of business segments

4.1 Integrated Gas, Renewables & Power (iGRP)

4.1.1 Production and sales of Liquefied natural gas (LNG) and electricity

3Q21

2Q21

3Q20

3Q21
vs
3Q20

3Q19

3Q21
vs
3Q19

Hydrocarbon production for LNG

9M21

9M20

9M21
vs
9M20

533

502

518

+3%

539

-1%

iGRP (kboe/d)

518

530

-2%

67

52

70

-3%

73

-8%

Liquids (kb/d)

61

70

-12%

2,527

2,464

2,445

+3%

2,546

-1%

Gas (Mcf/d)

2,489

2,509

-1%

3Q21

2Q21

3Q20

3Q21
vs
3Q20

3Q19

3Q21
vs
3Q19

Liquefied Natural Gas in Mt

9M21

9M20

9M21
vs
9M20

10.0

10.5

8.1

+24%

7.4

+34%

Overall LNG sales

30.4

28.3

+7%

4.3

4.2

4.3

-1%

4.2

+2%

incl. Sales from equity production*

12.8

13.3

-4%

8.3

8.8

6.6

+25%

5.5

+50%

incl. Sales by TotalEnergies from equity production and third party purchases

25.0

23.2

+8%

* The Company’s equity production may be sold by TotalEnergies or by the joint ventures

Hydrocarbon production for LNG increased by 6% compared to the previous quarter, in particular due to the end of planned maintenance at Ichthys in Australia.

Total LNG sales increased sharply compared to 2020, up 24% for the quarter and 7% for the first nine months.

3Q21

2Q21

3Q20

3Q21
vs
3Q20

Renewables & Electricity

9M21

9M20

9M21
vs
9M20

42.7

41.7

26.3

+62%

Portfolio of renewable power generation gross capacity
(GW) (1),(2)

42.7

26.3

+62%

9.5

8.3

5.1

+87%

o/w installed capacity

9.5

5.1

+87%

6.1

5.4

4.0

+52%

o/w capacity in construction

6.1

4.0

+52%

27.1

28.0

17.3

+57%

o/w capacity in development

27.1

17.3

+57%

26.6

22.6

14.2

+88%

Gross renewables capacity with PPA (GW) (1),(2)

26.6

14.2

+88%

31.7

30.7

18.0

+77%

Portfolio of renewable power generation net capacity
(GW) (1),(2)

31.7

18.0

+77%

4.7

4.0

2.3

x2.1

o/w installed capacity

4.7

2.3

x2.1

4.0

3.1

1.6

x2.5

o/w capacity in construction

4.0

1.6

x2.5

23.0

23.6

14.1

+64%

o/w capacity in development

23.0

14.1

+64%

4.7

5.1

4.1

+17%

Net power production (TWh) (3)

14.5

9.9

+46%

1.7

1.7

1.0

+67%

incl. Power production from renewables

4.9

2.8

+75%

6.0

5.8

4.4

+37%

Clients power - BtB and BtC (Million) (2)

6.0

4.4

+37%

2.7

2.7

1.7

+56%

Clients gas - BtB and BtC (Million) (2)

2.7

1.7

+56%

11.7

12.7

10.2

+15%

Sales power - BtB and BtC (TWh)

40.5

33.8

+20%

13.2

20.6

13.5

-2%

Sales gas - BtB and BtC (TWh)

70.0

64.4

+9%

291

310*

64

x4.6

Proportional adjusted EBITDA Renewables and Electricity (M$) (4)

946

404

x2.3

104

82*

66

+57%

incl. from renewables business

334

250

+34%

(1) Includes 20% of Adani Green Energy Ltd 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 and Electricity affiliates, regardless of consolidation method.
* 2Q21 data corrected for estimated results of AGEL.

Gross installed renewable power generation capacity grew to 9.5 GW at the end of the third quarter 2021, up 1.2 GW thanks in particular to the acquisition by AGEL (TotalEnergies 20%) during the quarter of the operating assets of SB Energy India's 5 GW renewable portfolio. Total gross capacity increased by 1 GW over the quarter to 42.7 GW, mainly due to the addition of a 1 GW solar power plant project in Iraq.

Net electricity generation stood at 4.7 TWh in the third quarter 2021, up 17% year-on-year, mainly due to strong growth in renewable electricity generation and the acquisition of four natural gas power plants (CCGT) in France and Spain in the fourth quarter 2020.

TotalEnergies’ Renewables and Electricity business adjusted EBITDA was $291 million in the third quarter 2021, a 4.6-fold increase over one year, driven by growing electricity production, particularly from renewables, and the number of gas and electricity customers.

4.1.2 Results

3Q21

2Q21

3Q20

3Q21
vs
3Q20

3Q19

3Q21
vs
3Q19

In millions of dollars

9M21

9M20

9M21
vs
9M20

1,608

891

285

x5.6

574

x2.8

Adjusted net operating income*

3,484

1,524

x2.3

755

356

99

x7.6

206

x3.7

including income from equity affiliates

1,375

278

x4.9

639

759

450

+42%

640

-

Organic investments

2,150

1,714

+25%

(941)

166

36

ns

3,375

ns

Net acquisitions

1,119

1,606

-30%

(302)

925

486

ns

4,015

ns

Net investments

3,269

3,320

-2%

1,720

904

695

x2.5

732

x2.3

Operating cash flow before working capital changes **

3,683

2,346

+57%

(463)

567

654

ns

401

ns

Cash flow from operations ***

884

1,554

-43%

* Detail of adjustment items shown in the business segment information annex to financial statements.
** Excluding financial charges, 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 segment was:

  • $1,608 million in the third quarter 2021, a 5.6-fold increase from a year ago, thanks to the increase in LNG prices and the strong performance of gas and electricity trading activities,

  • $3,484 million for the first nine months of 2021, an increase of 2.3-times compared to last year, for the same reasons.

Operating cash flow before working capital changes was:

  • $1,720 million in the third quarter 2021, an increase of 2.5-times compared to the third quarter 2020, thanks to the rise in LNG prices and the strong performance of gas and electricity trading activities,

  • $3,683 million for the first nine months of 2021, up 57% year-on-year, for the same reasons.

Cash flow from operations was -$463 million for the third quarter due to variations in margin calls related to hedging contracts in a context of highly volatile gas and electricity markets.

4.2 Exploration & Production

4.2.1 Production

3Q21

2Q21

3Q20

3Q21
vs
3Q20

3Q19

3Q21
vs
3Q19

Hydrocarbon production

9M21

9M20

9M21
vs
9M20

2,281

2,245

2,197

+4%

2,501

-9%

EP (kboe/d)

2,290

2,352

-3%

1,450

1,412

1,367

+6%

1,647

-12%

Liquids (kb/d)

1,435

1,493

-4%

4,543

4,553

4,528

-

4,654

-2%

Gas (Mcf/d)

4,672

4,684

-

4.2.2 Results

3Q21

2Q21

3Q20

3Q21
vs
3Q20

3Q19

3Q21
vs
3Q19

In millions of dollars, except effective tax rate

9M21

9M20

9M21
vs
9M20

2,726

2,213

801

x3.4

1,734

+57%

Adjusted net operating income*

6,914

1,295

x5.3

315

279

268

+18%

297

+6%

including income from equity affiliates

864

706

+22%

46.4%

38.2%

32.9%

39.7%

Effective tax rate**

42.5%

39.7%

1,656

1,559

1,266

+31%

2,064

-20%

Organic investments

4,494

3,950

+14%

(34)

231

(309)

ns

(3)

ns

Net acquisitions

(5)

(4)

1,622

1,790

957

+69%

2,061

-21%

Net investments

4,489

3,946

+14%

4,943

4,262

2,646

+87%

4,451

+11%

Operating cash flow before working capital changes ***

13,029

...

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