📊 TotalEnergies | 100 years of operation

In this edition, we take a quick look at the French Multinational TotalEnergies. Did you know TotalEnergies turned 100 this year. They were founded on 28-Mar-1924.

Income Statement

Q1 2024 takes no prisoners. TotalEnergies has seen a dip in its sales. However, they managed to improve their overall profit. This is due to a reduction in taxes for this quarter. Let’s take a quick look at the significant items.

Integrated LNG: Reduction in sales due to lower European demand due to a mild winter and high inventories.

Exploration & Production: Slightly lower production and prices

Equity Affiliates: From what I can tell, this is mostly due to the timing of the dividend payments. They hadn’t been issued in time for the 24Q1 report, but they were for the 23Q1 report.

Acquisitions & Divestments

Exploration & Production:

• Absheron Gas Field: In February 2024, TotalEnergies, along with its partner SOCAR (State Oil Company of the Republic of Azerbaijan), completed the sale of a 15% interest each in the Absheron gas field to ADNOC (Abu Dhabi National Oil Company). TotalEnergies now holds a 35% stake in the field, with SOCAR also holding 35% and ADNOC 30%.

Integrated Power:

• Texas Power Plants: TotalEnergies finalised the acquisition of three gas-fired power plants in Texas from TexGen in February 2024. The total capacity of these plants is 1.5 GW, and the net investment was U$635M.

Marketing & Services:

• Retail Network Divestment: In January 2024, TotalEnergies completed the partial divestment of its retail network in Belgium and Luxembourg and the full divestment in the Netherlands to Alimentation Couche-Tard for U$1.4B.

Cashflow Statement

I find cashflow to be the most interesting chart of the set. It sometimes shows that the disposal of assets can negatively impact the cashflow, and other disposals can be a net increase in cashflow.

Highlights & Outlook

Financial Performance

• Investment and Returns: TotalEnergies invested U$16.8B , with 35% allocated to low-carbon energies. The company achieved a return on equity of 20% and a return on average capital employed of 19%.

• Shareholder Returns: Ordinary dividends increased by 7.1%, and TotalEnergies completed U$9B in share buybacks. The payout ratio increased to 46.0% in 2023.

• Debt Reduction: Net debt was further reduced, achieving 5% gearing, supported by a U$5B positive contribution from working capital.

Employee and Customer Initiatives:

• Profit Sharing: TotalEnergies ensured balanced profit sharing with employees, including a 5% wage increase, a value-sharing bonus of at least €2,000, and support for employees' energy transitions.

Operational Highlights:

• Oil & Gas: Q4 production was 2.46 Mboe/d, benefiting from 7% LNG production growth. Full-year 2023 production increased by 2%, driven by 9% growth in LNG. Exploration & Production achieved an adjusted net operating income of U$10.9B and cash flow of U$19.1B. The reserves replacement ratio was 141%, with a proved reserves life index of 12 years.

• Integrated LNG: Q4 adjusted net operating income was U$1.5B, and cash flow was U$1.8B, reflecting higher production and strengthening prices.

• Integrated Power: Q4 adjusted net operating income was U$527M, with cash flow of U$705M. Full-year 2023 cash flow was U$2.2B, more than double compared to 2022. The business achieved an ROACE of 9.8%.

• Downstream: Q4 adjusted net operating income was U$939M, with cash flow of U$1.7B. Full-year 2023 adjusted net operating income was U$6.1B, with cash flow of U$8.2B.

Balance Sheet

The increase in equity is due to a positive comprehensive income. Otherwise, you can see a reduction in liabilities of assets for sale and in current loan liabilities. However, we can also see that the non-current loan liabilities dropped.

Cheers,

Connor

All data can be found at the TotalEnergies Investors website