TOTALENERGIES SE Total net income adjustments(4) were -$646 million in the third quarter 2020, essentially related to the conversion of the Grandpuits refinery in France and the sale of the Lindsey refinery in the United Kingdom.
The effective tax rate for the Group was 45.7% in the third quarter 2020, compared to -6.8% in the previous quarter and 30.7% in the third quarter 2019. The rate of 45.7% reflects negative adjusted net results in the Refining & Chemicals segment which reduces the base for calculating the Group rate.
> Adjusted earnings per share
Adjusted fully-diluted earnings per share was:
-- $0.29 in the third quarter 2020, calculated on the basis of a weighted
average of 2,637 million fully-diluted shares, compared to $1.13 in the
same period last year.
-- $0.97 in the first nine months 2020, calculated on the basis of a
weighted average of 2,612 million fully-diluted shares, compared to $3.20
in the same period last year.
The number of fully-diluted shares was 2,644 million on September 30, 2020.
> Acquisitions - asset sales
Finalized acquisitions were:
-- $150 million in the third quarter 2020, comprised notably of acquiring
51% of the Seagreen offshore wind project in the United Kingdom.
-- $2.7 billion in the first nine months 2020, comprised of the item above
as well as the acquisition in India of 50% of a portfolio of installed
solar activities from Adani Green Energy Limited, the closing of the
acquisition of 37.4% stake in Adani Gas Ltd, the acquisition of interests
in Blocks 20 and 21 in Angola, and the payment for a second tranche
linked to taking the 10% stake in the Arctic LNG 2 project in Russia.
Finalized asset sales were:
-- $422 million in the third quarter 2020, comprised notably of the sale of
non-strategic assets in the UK North Sea.
-- $1.1 billion in the first nine months 2020, comprised notably of the sale
above, as well as closing the sale of Block CA1 in Brunei, the sale of
the Group's interest in the Fos Cavaou regasification terminal in France,
and 50% of the sale of a portfolio of solar and wind assets from Total
Quadran in France.
> Net cash flow
Net cash flow(5) for the Group was:
-- $1,879 million in the third quarter 2020 compared to $19 million in the
third quarter 2019, which takes into account a decrease in net
investments from $6,718 million to $1,912 million and a decrease in
operating cash flow before working capital changes from $6,737 million to
$3,791 million.
-- $2.7 billion in the first nine months 2020 compared to $6.1 billion in
the first nine months 2019, due to the decrease of $8.1 billion in
operating cash flow before working capital changes, partially offset by a
reduction in net investments of $4.8 billion.
> Profitability
The return on equity was 5.5% for the twelve months ended September 30, 2020.
In millions of
dollars October 1, 2019 July 1, 2019 October 1, 2018
September 30,
2020 June 30, 2020 September 30, 2019
Adjusted net
income 5,960 8,214 12,104
Average adjusted
shareholders'
equity 108,885 109,448 117,037
Return on equity
(ROE) 5.5% 7.5% 10.3%
The return on average capital employed was 5.4% for the twelve months ended September 30, 2020.
In millions of
dollars October 1, 2019 July 1, 2019 October 1, 2018
September 30,
2020 June 30, 2020 September 30, 2019
Adjusted net
operating income 7,801 10,125 14,094
Average capital
employed 144,061 145,621 146,222
ROACE 5.4% 7.0% 9.6%
Total SE accounts
Net income for Total SE, the parent company, was EUR4,727 million in the first nine months 2020 compared to EUR5,934 million a year ago.
2020 Sensitivities*
Estimated impact Estimated impact
on adjusted net on cash flow from
Change operating income operations
Dollar +/- 0.1 $ per EUR -/+ 0.1 B$ 0 B$
Average liquids
price** +/- 10 $/b +/- 2.9 B$ +/- 3.3 B$
European gas price
- NBP ($/Mbtu) +/- 1 $/Mbtu +/- 0.35 B$ +/- 0.35 B$
Variable cost
margin, European
refining (VCM) +/- 10 $/t +/- 0.5 B$ +/- 0.6 B$
* Sensitivities are revised once per year upon publication of the previous year's fourth quarter results. Sensitivities are estimates based on assumptions about the Group's portfolio in 2020. Actual results could vary significantly from estimates based on the application of these sensitivities. The impact of the $-EUR sensitivity on adjusted net operating income is essentially attributable to Refining & Chemicals. Please find the indicators detailed page 16.
** In a 60 $/b Brent environment.
Summary and outlook
The oil market environment remains uncertain and will depend notably on the speed of the global demand recovery, affected by the Covid-19 pandemic.
Oil prices have remained above $40/b since June, supported by strong compliance with OPEC+ quotas and lower hydrocarbon production in North America. In this context, given the quotas, the Group now anticipates full-year 2020 production below 2.9 Mboe/d.
Total anticipates that the increase in oil prices over the second and third quarters will have a positive impact on its average LNG selling price in the fourth quarter, which is expected to be over $4/Mbtu.
In the Downstream, since the beginning of the fourth quarter, European refining margins have averaged more than $10/t and remain fragile given the low demand for jet fuel that weighs on the valuation of all distillates. In this context, the Group expects the Downstream to contribute more than $4.5 billion to the Group's cash flow in 2020.
In this context, the Group maintains strong discipline on spending. The Group's operating cost reduction program will surpass its objective with savings of more than $1 billion in 2020. Net investments will be less than $13 billion in 2020, including $2 billion for renewables and electricity.
The Group's priority is the generation of a level of cash flow that allows it to continue to invest in profitable projects, support the dividend and maintain a solid balance sheet. The Group's teams remain fully committed to the four priorities of HSE, operational excellence, cost reduction and cash flow generation.
* * * * *
To listen to the conference call with CFO Jean-Pierre Sbraire today at 13:00 (Paris time) please log on to total.com or call +44 (0) 207 192 8338 in Europe or +1 646 741 3167 in the United States (code: 2124019).
The conference replay will be available on total.com after the event.
* * * * *
Operating information by segment
> Group production (Exploration & Production + iGRP)
3Q20 Combined liquids and gas 9M20
vs production by region vs
3Q20 2Q20 3Q19 3Q19 (kboe/d) 9M20 9M19 9M19
969 1,032 1,004 -3% Europe and Central Asia 1,032 997 +4%
598 653 733 -18% Africa 651 705 -8%
576 641 720 -20% Middle East and North Africa 633 703 -10%
343 314 363 -5% Americas 343 364 -6%
229 206 221 +4% Asia-Pacific 223 212 +5%
2,715 2,846 3,040 -11% Total production 2,882 2,981 -3%
667 699 698 -4% includes equity affiliates 706 719 -2%
3Q20 9M20
vs Liquids production by region vs
3Q20 2Q20 3Q19 3Q19 (kb/d) 9M20 9M19 9M19
359 381 367 -2% Europe and Central Asia 381 349 +9%
458 514 583 -21% Africa 509 558 -9%
432 494 562 -23% Middle East and North Africa 481 543 -12%
144 127 163 -11% Americas 150 167 -10%
44 37 44 -1% Asia-Pacific 42 41 +3%
1,437 1,553 1,720 -16% Total production 1,563 1,658 -6%
197 199 210 -6% includes equity affiliates 203 217 -6%
3Q20 9M20
vs Gas production by region vs
3Q20 2Q20 3Q19 3Q19 (Mcf/d) 9M20 9M19 9M19
3,284 3,506 3,431 -4% Europe and Central Asia 3,507 3,498 -
713 706 768 -7% Africa* 722 755 -4%
801 818 866 -8% Middle East and North Africa 844 879 -4%
1,115 1,047 1,124 -1% Americas 1,085 1,111 -2%
1,060 968 1,011 +5% Asia-Pacific* 1,035 982 +5%
6,973 7,045 7,200 -3% Total production* 7,193 7,225 -
2,540 2,698 2,635 -4% includes equity affiliates* 2,714 2,719 -
* 3Q19 and 9M19 data restated
(MORE TO FOLLOW) Dow Jones Newswires
10-30-20 0855ET
