> Petroleum product sales 


 
                           2Q20                                          1H20 
                             vs                                            vs 
2Q20     1Q20     2Q19      2Q19    Sales in kb/d*     1H20     1H19      1H19 
                                    Total Marketing 
                                    & Services 
1,301    1,656    1,860    -30%     sales              1,478    1,848    -20% 
740      906      1,004    -26%     Europe             823      1,008    -18% 
561      750      856      -34%     Rest of world      656      840      -22%

* Excludes trading and bulk refining sales 



  Petroleum product sales volumes fell by 30% in the quarter and by 20% in the first half year-on-year notably due to the impact of the lockdown on demand. 


  > Results 

 
                         2Q20                                            1H20 
                           vs     In millions of                           vs 
2Q20    1Q20     2Q19     2Q19    dollars               1H20    1H19      1H19 
                                  Adjusted net 
129     302      423     -70%     operating income*     431     766      -44% 
 
                                  Organic 
155     109      204     -24%     investments           264     283      -7% 
(5)     6        96      ns       Net acquisitions      1       89       -99% 
150     115      300     -50%     Net investments       265     372      -29% 
 
                                  Operating cash 
                                  flow before 
                                  working capital 
492     390      626     -21%     changes **            882     1,208    -27% 
                                  Cash flow from 
819     (399)    611     +34%     operations **         420     843      -50% 
 


  * 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 was $129 million in the second quarter 2020, a drop of 70% due to the decrease in volumes. It decreased by 44% in the first half compared to last year for the same reason. 


  Operating cash flow before working capital changes was $492 million in the second quarter 2020 and $882 million in the first half. 


  Group results 


  > Adjusted net operating income from business segments 


  Adjusted net operating income from the business segments was: 

   -- $821 million in the second quarter 2020, a decrease of 77% compared to a 
      year ago due to lower Brent prices, natural gas prices and refining 
      margins as well as the impact of the Covid-19 crisis on demand. 
 
   -- $3,121 million in the first half 2020, a decrease of 55% year-on-year for 
      the same reasons. 
 


  > Adjusted net income (Group share) 


  Adjusted net income (Group share) was: 

   -- $126 million in the second quarter 2020, compared to $2,887 million a 
      year ago due to lower Brent prices, natural gas prices and refining 
      margins as well as the impact of the Covid-19 crisis on demand. 
 
   -- $1,907 million in the first half 2020 for the same reasons. 
 


  Adjusted net income excludes the after-tax inventory effect, special items and the impact of effects of changes in fair value(12) . 


  Total net income adjustments(13) were -$8,495 million in the second quarter 2020, including -$8,101 million for impairments. 


  The effective tax rate for the Group was -6.8% in the second quarter 2020, compared to 30% in the previous quarter. The negative rate is explained by the adjusted net operating loss in Exploration & Production, which has a high tax rate, and was not offset by the positive results in the Downstream, which has a lower tax rate. 


  > Adjusted fully-diluted earnings per share 


  Adjusted earnings per share was: 

   -- $0.02 in the second quarter 2020, calculated on the basis of a weighted 
      average of 2,598 million fully-diluted shares, compared to $1.05 in the 
      same period last year. 
 
   -- $0.68 in the first half 2020, calculated on the basis of a weighted 
      average of 2,598 million fully-diluted shares, compared to $2.07 in the 
      same period last year. 
 


  The number of fully-diluted shares was 2,605 million on June 30, 2020. 


  > Acquisitions - asset sales 


  Acquisitions were: 

   -- $857 million in the second quarter 2020, comprised notably of finalizing 
      the acquisition in India of 50% of a portfolio of installed solar 
      activities from Adani Green Energy Limited as well as the acquisition of 
      interests in Blocks 20 and 21 in Angola. 
 
   -- $2.5 billion in the first half 2020, comprised of the elements above as 
      well as the finalization of the acquisition of 37.4% of Adani Gas Limited 
      in India and the payment for a second tranche linked to taking the 10% 
      stake in the Arctic LNG 2 project in Russia. 
 


  Asset sales were: 

   -- $136 million in the second quarter 2020. 
 
   -- $678 million in the first half 2020, comprised notably of the sales of 
      Block CA1 in Brunei, the Group's interest in the Fos Cavaou 
      regasification terminal in France, and 50% of a portfolio of solar and 
      wind assets from Total Quadran in France. 
 


  > Net cash flow 


  Net cash flow(14) for the Group was: 

   -- $226 million in the second quarter 2020 compared to $3.3 billion a year 
      ago due to the decrease in operating cash flow before working capital 
      changes in the context of sharply lower oil and gas prices. It remains 
      positive thanks to the decrease in net investments. 
 
   -- $0.6 billion in the first half 2020 compared to $6.2 billion year-on-year 
      due to the decrease in operating cash flow before working capital changes 
      of $5.6 billion in the context of sharply lower oil and gas prices. 
 


  > Profitability 


  The return on equity was 7.5% for the twelve months ended June 30, 2020. 

 
In millions of dollars      July 1, 2019   April 1, 2019   July 1, 2018 
                            June 30, 2020  March 31, 2020  June 30, 2019 
Adjusted net income         8,214          11,079          13,125 
Average adjusted 
 shareholders' equity       109,448        113,607         117,787 
Return on equity (ROE)      7.5%           9.8%            11.1% 
 


  The return on average capital employed was 7% for the twelve months ended June 30, 2020. 

 
In millions of dollars      July 1, 2019   April 1, 2019   July 1, 2018 
                            June 30, 2020  March 31, 2020  June 30, 2019 
Adjusted net operating 
 income                     10,125         13,032          15,087 
Average capital employed    145,621        150,418         145,247 
ROACE                       7.0%           8.7%            10.4% 
 


  Total SE accounts 


  Net income for Total SE, the parent company, was EUR4,710 million in the first half 2020 compared to EUR6,282 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 15. 


  ** In a 60 $/b Brent environment. 


  Summary and outlook 


  Oil prices strengthened since the beginning of June, reaching around 40 $/b, benefiting from strong compliance with the OPEC+ quotas and the decline of hydrocarbon production in the United States and Canada as well as a recovery in demand. 


  The oil environment, however, remains volatile, given the uncertainty around the extent and speed of the global economic recovery post-Covid-19. 


  The Group demonstrates discipline in the implementation of its 2020 action plan: 


  - Net investments below $14 billion, 


  - Savings of $1 billion on operating costs compared to 2019. 


  Total will continue to profitably grow in low carbon electricity, particularly in renewables, with close to $2 billion of investments in 2020. 


  In LNG, Total anticipates significant deferred liftings in the third quarter and expects the decline in oil prices observed in the second quarter to have an impact on long-term LNG contract prices in the second half of the year. 


  Considering the implementation of the OPEC+ quotas and the situation in Libya, the Group now expects 2020 production to be between 2.9 Mboe/d and 2.95 Mboe/d, with a low point in the third quarter during the summer season. The ramp up of Iara's second FPSO in Brazil will contribute to production growth in the last part of the year. In the Downstream, high inventory levels continue to weigh on refining margins and utilization rates. In Marketing, activity in Europe returned to 90% of its pre-crisis level since June and the Group anticipates that it will remain at a comparable level in the coming months. 


  The Group's priority is to generate a level of cash flow that allows it to continue to invest in profitable projects, to preserve an attractive shareholder return and to maintain a strong balance sheet. To this end, the Group's teams are focused on the four priorities of HSE, operational excellence, cost reduction and cash flow generation. 


  * * * * * 


  (MORE TO FOLLOW) Dow Jones Newswires


  07-30-20 0830ET