- TotalEnergies reports IFRS net income of $6.6 billion, driven by its LNG business, strengthens its balance sheet and shares benefit with employees and shareholders
According to the company’s website press release on October 27, 2022, the Board of Directors of TotalEnergies SE, meeting on October 26, 2022 under the chairmanship of CEO Patrick Pouyanné approved the Company’s financial statements for the third quarter of 2022. On this occasion, Patrick Pouyanné said:
"In a context marked by an average Brent price of 100 $/b and an increase in gas prices exacerbated by Russia’s military aggression in Ukraine, TotalEnergies leveraged its integrated model, particularly LNG, to generate results in line with previous quarters. In the third quarter 2022, the Company posted adjusted net income of $9.9 billion and IFRS net income of $6.6 billion after taking into account a new impairment of $3.1 billion related to Russia. Cash flow was $11.7 billion, and the Company strengthened its balance sheet with a gearing ratio of 4%. Return on equity was more than 30% over the past 12 months.
The iGRP (integrated Gas, Renewables & Power) segment reported record adjusted net operating income of $3.6 billion this quarter, up $1.1 billion from the second quarter, and cash flow of $2.7 billion, driven by an average LNG selling price up more than 50% compared to the previous quarter and by the strong performance of its trading activities. The Company continued to implement its growth strategy by taking a stake in the North Field South LNG project in Qatar. In Electricity & Renewables, TotalEnergies completed the acquisition of 50% of the Clearway Energy Group in the United States and announced a significant acquisition in Brazil.
Exploration & Production posted adjusted net operating income of $4.2 billion and cash flow of $6.4 billion, despite a decrease in production this quarter, mainly due to unplanned shutdowns at Kashagan. TotalEnergies started production at the Ikike field in Nigeria, launched the Begonia project in Angola and the Fenix project in Argentina, and announced a significant gas discovery in Cyprus.
Downstream benefited from strong distillate margins, generating an outstanding adjusted net operating income of $2.4 billion and a cash flow of $2.9 billion.
In this favorable environment, taking into account income and production taxes of $26 billion worldwide, the Company is implementing a balanced value-sharing policy with an exceptional one-month-salary bonus in 2022 to all its employees(3) worldwide and, as announced on September 28, its shareholder return policy targeting 35-40% cash flow payout beginning in 2022.
The Board of Directors therefore decided to distribute a third interim dividend for the 2022 financial year in the amount of €0.69/share, equal to the first and second 2022 interim dividends and an increase of 5% from the interim and the final dividends paid for the 2021 financial year, and set the ex-dividend and payment dates for the interim special dividend of €1/share in December 2022. »
Highlights
Social and environmental responsibility
- TotalEnergies' contributed to the energy transition dialogue in view of COP27 with the publication of the "TotalEnergies Energy Outlook 2022"
- Fuel price reduction program until year-end for TotalEnergies’ service stations in France: 20 c/l discount extended until November 15 and then 10 c/l discount until December 31, 2022
Electricity & Renewables
- Acquired an interest in the development of more than 12 GW of onshore solar and wind projects in Brazil
- Offshore wind:
Start-up of Seagreen, Scotland's largest offshore wind farm
- Solar:
Start-up of the 800 MW Al Kharsaah solar power plant in Qatar
Reached the objective of 500 MW of distributed solar generation capacity worldwide
LNG
- Acquired a 9.375% stake in the 16 Mt/y North Field South LNG project in Qatar
- Launched the FEED for the Papua LNG project’s upstream production facilities, in Papua New Guinea
Upstream
- Started production at the Ikike field in Nigeria
- Launched developments in Angola of the Begonia oil field, the Quiluma and Maboqueiro gas fields, as well as a first solar project with a capacity of 35 MW
- Launched the Fenix offshore gas project in Argentina
- Significant offshore gas discovery at Cronos-1 well, located on Block 6 in Cyprus
- Exploration & production sharing agreement signed for Block 11 in Oman
- Sold 18% stake in the onshore Sarsang oil field in Iraq
- Sold 49% interest in the Termokarstovoye gas field in Russia to Novatek
Downstream and new molecules
- Agreement with SARIA to develop SAF production on the Grandpuits platform in France
- Sold 50% of fuel distribution business in Egypt to ADNOC
Decarbonization
- Awarded a CO2 sequestration license in Australia, in partnership with INPEX and Woodside
- First cross-border commercial agreement for CO2 transport and storage on the Northern Lights project in Norway
- Memorandum of understanding with Holcim for a pilot project to decarbonize a cement plant in Belgium
- Created with the Technical University of Denmark a research center of excellence in decarbonized energies
Key figures of environment, greenhouse gas emissions and production
The average LNG selling price was up 54% in the third quarter compared to the previous quarter, benefiting on a lagged basis from the increase in oil and gas price indexes on long-term contracts as well as high spot gas prices.
Production
Hydrocarbon production was 2,669 thousand barrels of oil equivalent per day (kboe/d) in the third quarter of 2022, down 5% year-on-year, comprised of:
- +3% due to the start-up and ramp-up of projects including Clov Phase 2 and Zinia Phase 2 in Angola,
Mero 1 in Brazil and Ikike in Nigeria,
- +2% due to the increase in OPEC+ production quotas,
- -3% due to higher planned maintenance, particularly on Ichthys, and unplanned shutdowns on Kashagan,
- -3% portfolio effect, notably related to the end of the operating licenses for Qatargas 1 and Bongkot North in Thailand, as well as the effective withdrawal from Myanmar, partially offset by the entry into the Sepia and Atapu producing fields in Brazil,
- -1% due to security-related production cuts in Libya and Nigeria,
- -1% due to the price effect,
- -2% due to the natural decline of the fields.
Compared to the previous quarter, production was down 2.5%, mainly due to planned maintenance, notably at Ichthys, and unplanned shutdowns at Kashagan, partially offset by the entry into production fields of Sepia and Atapu and the ramp-up of Mero 1 in Brazil.
Analysis of business segments
4.1 Integrated Gas, Renewables & Power (iGRP)
Third quarter 2022 LNG production was down 6% year-on-year, mainly due to the end of the Qatargas 1 operating license, planned maintenance on Ichthys LNG in Australia as well as the decrease in gas supply to NLNG in Nigeria for security reasons.
Overall LNG sales were down 10% in the third quarter compared to the previous quarter, mainly due to the outage at Freeport LNG, planned maintenance at Ichthys LNG and a shutdown of production at Idku LNG in Egypt due to insufficient gas supply.
Nevertheless, third quarter 2022 overall LNG sales were up 5% year-on-year, mainly due to the increase in spot purchases to maximize the use of the Company's regasification capacity in Europe and seize opportunities in a volatile market.
Gross installed renewable power generation capacity reached 16.0 GW at the end of the third quarter 2022, up 4.4 GW from the previous quarter, including 3.8 GW related to the acquisition of 50% of Clearway Energy Group in the United States and 160 MW related to the start-up of the Seagreen offshore wind farm in Scotland.
Gross power generation capacity in development increased by 12.5 GW quarter-on-quarter, mainly due to the acquisition of 50% of Clearway Energy Group in the United States.
Net electricity generation stood at 8.5 TWh in the third quarter 2022, up 79% 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 Electricity & Renewables business reached $460 million in the third quarter 2022, up 58% year-on-year due to the growth of the business.
Results
Adjusted net operating income for the iGRP segment was:
- $3,649 million in the third quarter 2022, 2.3 times the same quarter last year, thanks to higher LNG prices, the performance of gas, LNG and electricity trading activities and the growing contribution of Electricity & Renewables,
- $9,255 million over the first nine months of 2022, 2.7 times the same period last year for the same reasons.
The iGRP segment's cash flow was as follows:
- $2,683 million in the third quarter 2022, up 56% year-on-year, thanks to higher LNG prices, the performance of gas, LNG and electricity trading activities and the growing contribution of Electricity &Renewables, despite a lag effect on dividends received from equity affiliates,
- $7,628 million over the first nine months of 2022, 2.1 times the same period last year for the same reasons.
Operating cash flow was $4,390 million for the quarter, mainly due the positive impact on working capital requirements of margin call reductions and the seasonality of the gas and electricity supply business.
About TotalEnergies
TotalEnergies is a global multi-energy company that produces and markets energies: oil and biofuels, natural gas and green gases, renewables and electricity. Our more than 100,000 employees are committed to energy that is ever more affordable, cleaner, more reliable and accessible to as many people as possible. Active in more than 130 countries, TotalEnergies puts sustainable development in all its dimensions at the heart of its projects and operations to contribute to the well-being of people.
TotalEnergies Contacts
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Investor Relations: +33 (0)1 47 44 46 46 l ir@totalenergies.com
