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Half-year Report

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PARIS, September 16, 2021--(BUSINESS WIRE)--

TOTAL ENERGIES

Financial report
1
st half 2021

Certification of the person responsible for the half-year financial report

This translation is a non binding translation into English of the Chairman and Chief Executive Officer’s certification issued in French, and is provided solely for the convenience of English-speaking readers.

"I certify, to the best of my knowledge, that the condensed Consolidated Financial Statements of TotalEnergies SE (the Corporation) for the first half of 2021 have been prepared in accordance with the applicable set of accounting standards and give a fair view of the assets, liabilities, financial position and profit or loss of the Corporation and all the entities included in the consolidation, and that the half-year financial report on pages to herein includes a fair review of the important events that have occurred during the first six months of the financial year and their impact on the financial statements, major related parties transactions and the principal risks and uncertainties for the remaining six months of the financial year.

The statutory auditors’ report on the limited review of the above-mentioned condensed Consolidated Financial Statements is included on page of this half-year financial report."

Courbevoie, July 29, 2021

Patrick Pouyanné
Chairman and Chief Executive Officer


Glossary
The terms "TotalEnergies" and "TotalEnergies company" as used in this document refer to TotalEnergies SE collectively with all of its direct and indirect consolidated companies located in or outside of France. The term "Corporation" as used in this document exclusively refers to TotalEnergies SE, which is the parent company of TotalEnergies company.

Abbreviations

€ :

euro

$ or dollar :

US dollar

ADR :

American depositary receipt (evidencing an ADS)

ADS :

American depositary share (representing a share of a company)

AMF :

Autorité des marchés financiers (French Financial Markets Authority)

API :

American Petroleum Institute

CO2 :

carbon dioxide

DACF :

debt adjusted cash flow is defined as operating cash flow before working capital changes without financial charges

EV :

electric vehicle

FLNG :

floating liquefied natural gas

FPSO :

floating production, storage and offloading

FSRU :

floating storage and regasification unit

GHG :

greenhouse gas

HSE :

health, safety and the environment

IFRS :

International Financial Reporting Standards

IPIECA :

International Petroleum Industry Environmental Conservation Association

LNG :

liquefied natural gas

LPG :

liquefied petroleum gas

NGL :

natural gas liquids

NGV :

natural gas vehicle

OML :

oil mining lease

PPA :

Power Purchase Agreement

ROACE :

return on average capital employed

ROE :

return on equity

SEC :

United States Securities and Exchange Commission

VCM :

variable cost margin – Refining Europe

This indicator represents the average margin on variable costs realized by TotalEnergies’ European refining business. It is equal to the difference between the sales of refined products realized by TotalEnergies’ European refining and the crude purchases as well as associated variable costs, divided by refinery throughput in tons.

Units of measurement

b = barrel(1)

b = billion

Bcm = billion of cubic meters

boe = barrel of oil equivalent

btu = British thermal unit

cf = cubic feet

CO2e = CO2 equivalent

/d = per day

GtCO2 = billion of CO2 tons

GW = gigawatt

GWh = gigawatt hour

k = thousand

km = kilometer

m = meter

= cubic meter(1)

M = million

MW = megawatt

PJ = petajoule

t = (Metric) ton

toe = ton of oil equivalent

TWh = terawatt hour

W = watt

Wac = AC watt

Wp = watt-peak or watt of peak power

/y = per year

Conversion table

1 acre ≈ 0.405 hectares

1 b = 42 gallons US ≈ 159 liters

1 b/d of crude oil ≈ 50 t/y of crude oil

1 km ≈ 0.62 miles

1 m³ ≈ 35.3 cf

1 Mt de LNG ≈ 48 Bcf of gas

1 Mt/y of LNG ≈ 131 Mcf/d of gas

1 t of oil ≈ 7.5 b of oil (assuming a specific gravity of 37° API)

1 boe = 1 b of crude oil ≈ 5,399 cf of gas in 2020(2) (5,395 cf in 2019 and 5,387 cf in 2018)

(1) Liquid and gas volumes are reported at international standard metric conditions (15°C and 1 atm).
(2) Natural gas is converted to barrels of oil equivalent using a ratio of cubic feet of natural gas per one barrel. This ratio is based on the actual average equivalent energy content of TotalEnergies’ natural gas reserves during the applicable periods and is subject to change. The tabular conversion rate is applicable to TotalEnergies natural gas reserves on a Company-wide basis.


01 HALF YEAR FINANCIAL REPORT
1.1 Highlights since the beginning of 2021
(1)
Sustainability

  • Total transforms and becomes TotalEnergies, with a new visual identity

  • TotalEnergies’ Board of Directors takes the initiative to submit a resolution on the Company’s ambition for sustainable development and energy transition toward carbon neutrality

  • Consistent with its climate policy, TotalEnergies withdraws from the American Petroleum Institute

  • Inauguration of L’Industreet, a campus for training young people in the industry profession, TotalEnergies’ flagship action for social responsibility in France

  • 3rd place globally and 1st place for the sector Oil and Gas in the BloombergNEF ranking on the alignment of corporate strategies with the United Nations’ Sustainable Development Goals

  • TotalEnergies and Chevron decide to suspend distribution of dividends from gas transport company in Myanmar

  • Partnership with Novatek to reduce emissions from LNG production, develop large-scale carbon capture and storage, and study carbon-free hydrogen and ammonia projects

  • Partnership with GHGSat for satellite-based monitoring of methane emissions at sea

Renewables and Electricity

  • Acquired in India 20% of Adani Green Energy Limited (AGEL), the largest solar developer in the world

  • Secured with Macquarie rights to seabed lease to jointly develop 1.5 GW offshore wind project in the UK

  • Acquired 4 GW portfolio of solar and energy storage projects in the US

  • Farmed down 50% of two renewables portfolios in France representing close to 340 MW

  • Acquired 23% stake in 640 MW offshore wind project under construction in Taiwan

  • Acquisition by Adani Green Energy Ltd., in which TotalEnergies has a 20% stake, of a portfolio of 5 GW of renewable electricity generation capacity in operation and under construction in India that will contribute 1 GW to TotalEnergies’ target of 35 GW in 2025

  • Signed major green power sale agreement to Orange to develop 80 MW of solar farms in France

  • Signed contract with Merck & Co. for the sale of 90 GWh/y renewable electricity in Spain for 10 years

  • Sales contract for 50GWh/y over 15 years with Air Liquide in Belgium

  • Partnered with Microsoft to support digital innovation and carbon neutrality goals

  • Partnership with Amazon to supply (474 MW) renewable electricity to its data centers in Europe and the United States, and to accelerate TotalEnergies digital transformation

LNG

  • Declaration of force majeure on Mozambique LNG project considering the security situation in the northern Cabo Delgado

  • Remobilization of the Papua LNG project with a view to final investment decision in 2023

  • Agreement with Novatek to acquire 10% of Arctic Transshipment LLC, which will operate two LNG transshipment terminals under construction in Russia

  • Tolling agreement with GIP, for more than $750 million, for Gladstone LNG infrastructure in Australia

  • Withdrew from the Driftwood LNG project and sold TotalEnergies’ stake in Tellurian Inc.

  • Signed agreements with Shenergy Group for the supply of up to 1.4 Mt/y of LNG in China

  • Signed contract with ArcelorMittal Nippon Steel for a 5-year supply of up to 0.5 Mt/y of LNG in India

  • Obtained supplier license for marine bunker LNG in Singapore

  • Technical collaboration agreements with Siemens Energy and Technip Energies to develop low-carbon LNG technologies

Upstream

  • Signed definitive agreements enabling the launch of Tilenga and Kingfisher upstream oil projects and construction of East African Crude Oil Pipeline in Uganda and Tanzania

  • Published societal and environmental studies relating to the Tilenga and EACOP projects in Uganda and Tanzania

  • Started production of Zinia Phase 2, short-cycle development project on Block 17 in Angola

  • Significant new discovery on the Sapakara South well in Suriname

  • Awarded two new conventional offshore exploration permits in Suriname with partner Qatar Petroleum

  • Entry on Block 29 exploration permit in Angola as operator

  • Agreed to divest TotalEnergies 18% interest in the Sarsang block, in Iraqi Kurdistan

  • Divested TotalEnergies’ interest in Petrocedeño to PDVSA in Venezuela which led to the recognition of an exceptional capital loss of $1.38 billion during the second quarter 2021

Downstream

  • Started production of sustainable aviation biofuels in France and made, in partnership with Air France-KLM, Groupe ADP and Airbus, the first long-haul flight with sustainable air fuel (SAF) in France

  • Obtained concession for the expansion of the public charging network for electric vehicles of the City of Amsterdam, with 2,200 new charging points

  • Global partnership in the field of lubricants and electric mobility with Peugeot, Citroën, DS Automobiles, Opel and Vauxhall

  • Partnership agreement with Uber to accelerate transition of VTC drivers to electric mobility in France

  • Acquired 20% stake in Hysetco, a French company owning the world’s first fleet of hydrogen taxis, operated under the Hype brand, as well as hydrogen charging stations

Carbon sinks

  • Investment to plant 40,000-hectare forest in Republic of Congo that will create a carbon sink to sequester more than 10 million tons of CO2 over 20 years

  • Creation of the joint-venture development of the Northern Lights CO2 sequestration project in the northern North Sea

(1) Certain transactions referred to in the highlights are subject to approval by authorities or to conditions as per the agreements.


1.2 Key figures from TotalEnergies’ consolidated financial statements(1)

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

1S21

1S20

1S21 vs 1S20

Adjusted EBITDA(2)

16,837

10,583

+59%

Adjusted net operating income from business segments

7,519

3,121

x2.4

Exploration & Production

4,188

494

x8.5

Integrated Gas, Renewables & Power

1,876

1,239

+51%

Refining & Chemicals

754

957

-21%

Marketing & Services

701

431

+63%

Contribution of equity affiliates to adjusted net income

1,260

669

+88%

Effective tax rate(3)

34.4%

24.3%

Adjusted net income (TotalEnergies share)

6,466

1,907

x3.4

Adjusted fully-diluted earnings per share (dollars)(4)

2.38

0.68

x3.5

Adjusted fully-diluted earnings per share (euros)*

1.97

0.62

x3.2

Fully-diluted weighted-average shares (millions)

2,644

2,598

+2%

Net income (TotalEnergies share)

5,550

(8,335)

ns

Organic investments(5)

5,181

4,724

+10%

Net acquisitions(6)

1,986

1,823

+9%

Net investments(7)

7,167

6,547

+9%

Operating cash flow before working capital changes**(8)

11,718

7,409

+58%

Operating cash flow before working capital changes w/o financial charges (DACF)(9)

12,511

8,420

+49%

Cash flow from operations

13,149

4,778

x2.8

* Average €-$ exchange rate: 1.2053 in the first half 2021.

** 1H20 data restated.

(1) Adjusted results are defined as income using replacement cost, adjusted for special items, excluding the impact of changes for fair value; adjustment items are on page ■.

(2) Adjusted EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) corresponds to the adjusted earnings before depreciation, depletion and impairment of tangible and intangible assets and mineral interests, income tax expense and cost of net debt, i.e. all operating income and contribution of equity affiliates to net income.

(3) Effective tax rate = (tax on adjusted net operating income) / (adjusted net operating income – income from equity affiliates – dividends received from investments – impairment of goodwill + tax on adjusted net operating income).

(4) In accordance with IFRS rules, adjusted fully-diluted earnings per share is calculated from the adjusted net income less the interest on the perpetual subordinated bond.

(5) Organic investments = net investments excluding acquisitions, asset sales and other operations with non-controlling interests.

(6) Net acquisitions = acquisitions – assets sales – other transactions with non-controlling interests (see page ■).

(7) Net investments = organic investments + net acquisitions (see page ■).

(8) Operating cash flow before working capital changes, is defined as cash flow from operating activities before changes in working capital at replacement cost, excluding the mark-to-market effect of iGRP’s contracts and including capital gain from renewable projects sale (effective first quarter 2020).

The inventory valuation effect is explained on page ■. The reconciliation table for different cash flow figures is on page ■.

(9) DACF = debt adjusted cash flow, is defined as operating cash flow before working capital changes and financial charges.

1.3 Key figures of environment, greenhouse gas emissions and production
1.3.1 Environment – liquids and gas price realizations, refining margins

1S21

1S20

1S21 vs 1S20

Brent ($/b)

65.0

40.1

+62%

Henry Hub ($/Mbtu)

2.9

1.8

+57%

NBP ($/Mbtu)

7.7

2.4

x3.2

JKM ($/Mbtu)

10.0

2.9

x3.5

Average price of liquids ($/b) Consolidated subsidiaries

59.7

33.8

+77%

Average price of gas ($/Mbtu) Consolidated subsidiaries

4.23

2.99

+41%

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

6.33

5.42

+17%

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

7.6

21.0

-64%

1.3.2 Greenhouse gas emissions(1)

GHG emissions (MtCO2e)

1S21

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

15

Scope 3(3)

159

Scope 1+2+3 in Europe(4)

95

1.3.3 Production*

Hydrocarbon production

1S21

1S20

1S21 vs 1S20

Hydrocarbon production (kboe/d)

2,805

2,966

-5%

Oil (including bitumen) (kb/d)

1,265

1,381

-8%

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

1,540

1,584

-3%

Hydrocarbon production (kboe/d)

2,805

2,966

-5%

Liquids (kb/d)

1,486

1,626

-9%

Gas (Mcf/d)

7,208

7,302

-1%

* Company production = E&P production + iGRP production

Hydrocarbon production was 2,805 kboe/d in the first half 2021, a decrease of 5%, comprised of:

  • +2% due to the start-up and ramp-up of projects, including North Russkoye in Russia, Culzean in the United Kingdom, Johan Sverdrup in Norway and Iara in Brazil,

  • -1% portfolio effect, notably asset sales in the United Kingdom and Block CA1 in Brunei,

  • -2% due to planned maintenance and unplanned outages, notably in the United Kingdom, Australia, Norway and Nigeria,

  • -1% due to the price effect,

  • -3% due to the natural decline of the fields.

(1) The six greenhouse gases in the Kyoto protocol, namely CO2, CH4, N2O, HFCs, PFCs and SF6, with their respective GWP (Global Warming Potential) as described in the 2007 IPCC report. HFCs, PFCs and SF6 are virtually absent from the Company’s emissions or are considered as non-material, and are therefore not counted.

(2) Scope 1+2 GHG emissions of operated oil & gas facilities are defined as the sum of direct emissions of greenhouse gases from sites or activities that are included in the scope of reporting

(as defined in the Company’s 2020 Universal Registration Document) and indirect emissions attributable to brought-in energy (electricity, heat, steam), excluding purchased industrial gases (H2). They do not include facilities for power generation from renewable sources or natural gas, such as combined cycle natural gas power plants (CCGT) and sites with GHG emissions and activities of less than 30 kt CO2e/year.

(3) Scope 3 GHG emissions are defined as the indirect emissions of greenhouse gases related to the use by customers of energy products sold for end-use, i.e. combustion of the products to obtain energy. A stoichiometric emission (oxidation of molecules to carbon dioxide) factor is applied to these sales to obtain an emission volume. The Company usually follows the oil & gas industry reporting guidelines published by IPIECA, which comply with the GHG Protocol methodologies. Only item 11 of Scope 3 (use of sold products), which is the most significant, is reported.

(4) Scope 1+2+3 GHG emissions in Europe are defined as the sum of Scope 1+2 GHG emissions of facilities operated by the Company and indirect GHG emissions related to the use by customers of energy products sold for end-use (Scope 3) in the EU, Norway, United Kingdom and Switzerland.

1.4 Analysis of business segments
1.4.1 Integrated Gas, Renewables & Power (iGRP)
1.4.1.1 Production and sales of Liquefied natural gas (LNG) and electricity

Hydrocarbon production for LNG

1S21

1S20

1S21 vs 1S20

iGRP (kboe/d)

510

536

-5%

Liquids (kb/d)

58

69

-17%

Gas (Mcf/d)

2,470

2,541

-3%

Liquefied Natural Gas in Mt

1S21

1S20

1S21 vs 1S20

Overall LNG sales

20.4

20.2

+1%

incl. Sales from equity production*

8.5

9.0

-5%

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

16.7

16.5

+1%

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

Hydrocarbon production for LNG decreased year-on-year by 5% in the first half 2021, notably due to the shutdown of the Snøhvit LNG plant following a fire at the end of September 2020 and the planned maintenance shutdown in the second quarter 2021 on Ichthys LNG’s liquefaction trains in Australia.

Total LNG sales were stable year-on-year in the first half 2021.

Renewables & Electricity

1S21

1S20

1S21 vs 1S20

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

41.7

20.4

x2

o/w installed capacity

8.3

5.1

+63%

o/w capacity in construction

5.4

2.9

+89%

o/w capacity in development

28.0

12.4

x2.3

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

22.6

11.2

x2

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

30.7

13.6

x2.3

o/w installed capacity

4.0

2.3

+76%

o/w capacity in construction

3.1

1.1

x3

o/w capacity in development

23.6

10.3

x2.3

Net power production (TWh)(3)

9.8

5.9

+67%

incl. Power production from renewables

3.2

1.8

+79%

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

5.8

4.2

+38%

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

2.7

1.7

+58%

Sales power – BtB and BtC (TWh)

28.8

23.6

+22%

Sales gas – BtB and BtC (TWh)

56.8

50.9

+12%

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

635

340

+87%

incl. from renewables business

210

184

+14%

Gross installed capacity of renewable electricity generation grew to 8.3 GW at the end of first semester 2021.

Net electricity production was 9.8 TWh in the first half 2021, an increase of 67% year-on-year, notably due to strong growth in renewable electricity generation and the acquisition of four CCGT plants in France and Spain in the fourth quarter of 2020.

Electricity and gas sales increased by 22% and 12% respectively in the first half 2021 compared to last year thanks to the growing number of customers, with TotalEnergies notably surpassing the 5 million customer mark (B2C and B2B) in France.

TotalEnergies’ share of the EBITDA of the Renewables and Electricity activities was $635 million in the first half 2021, an increase of 87% over one year, driven by growing electricity production, particularly renewable electricity, and the number of gas and electricity customers.

(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.

1.4.1.2 Results

In millions of dollars

1S21

1S20

1S21 vs 1S20

Adjusted net operating income*

1,876

1,239

+51%

including income from equity affiliates

620

179

x3.5

Organic investments

1,512

1,264

+20%

Net acquisitions

2,059

1,570

+31%

Net investments

3,571

2,834

+26%

Operating cash flow before working capital changes**

1,963

1,652

+19%

Cash flow from operations***

1,347

900

+50%

* Detail of adjustment items shown in the business segment information annex to financial statements.

** Excluding financial expenses, 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. 1H20 data restated (see note 8 on page ■).

*** Excluding financial charges, except those related to leases.

Adjusted net operating income for the iGRP sector was 1,876 million in the first half 2021, an increase of 51% year-on-year, thanks to higher LNG prices, growing contribution from Renewables and Electricity as well as good performance by the trading activities in the first quarter 2021.

Operating cash flow before working capital changes increased 19% year-on-year to $1,963 million in the first half 2021, in line with the rise in LNG prices and the growing contribution of Renewables and Electricity.

1.4.2 Exploration-Production
1.4.2.1 Production

Hydrocarbon production

1S21

1S20

1S21 vs 1S20

EP (kboe/d)

2,295

2,430

-6%

Liquids (kb/d)

1,428

1,557

-8%

Gas (Mcf/d)

4,738

4,761

1.4.2.2 Results

In millions of dollars, except effective tax rate

1S21

1S20

1S21 vs 1S20

Adjusted net operating income*

4,188

494

x8.5

including income from equity affiliates

549

438

+25%

Effective tax rate**

39.5%

69.6%

Organic investments

2,838

2,684

+6%

Net acquisitions

29

305

-90%

Net investments

2,867

2,989

-4%

Operating cash flow before working capital changes***

8,086

4,386

+84%

Cash flow from operations***

8,571

4,833

+77%

* Details on adjustment items are shown in the business segment information annex to financial statements.

** Tax on adjusted net operating income/(adjusted net operating income - income from equity affiliates - dividends received from investments - impairment of goodwill + tax on adjusted net operating income).

*** Excluding financial charges, except those related to leases.

Adjusted net operating income for Exploration & Production was $4,188 million in the first half 2021, more than eight times higher in the first half 2020, thanks to the sharp rebound in oil and gas prices.

Operating cash flow before working capital changes increased by 84% to $8,086 million in the first half 2021, in line with higher oil and gas prices.

1.4.3 Downstream (Refining & Chemicals and Marketing & Services)
1.4.3.1 Results

In millions of dollars

1S21

1S20

1S21 vs 1S20

Adjusted net operating income*

1,455

1,388

+5%

Organic investments

803

734

+9%

Net acquisitions

(104)

(50)

ns

Net investments

699

684

+2%

Operating cash flow before working capital changes**

2,332

2,552

-9%

Cash flow from operations**

4,330

317

x13.7

* Detail of adjustment items shown in the business segment information annex to financial statements.

** Excluding financial charges, except those related to leases.

1.4.3.2 Refining & Chemicals
1.4.3.2.1 Refinery and petrochemicals throughput and utilization rates

Refinery throughput and utilization rate*

1S21

1S20

1S21 vs 1S20

Total refinery throughput (kb/d)

1,109

1,347

-18%

France

131

230

-43%

Rest of Europe

578

676

-14%

Rest of world

400

441

-9%

Utlization rate based on crude only**

58%

64%

* Includes refineries in Africa reported in the Marketing & Services segment.

** Based on distillation capacity at the beginning of the year, excluding Grandpuits (definitively shut down first quarter 2021) from 2021 and Lindsey refinery (divested) from second quarter 2021.

Petrochemicals production and utilization rate

1S21

1S20

1S21 vs 1S20

Monomers* (kt)

2,829

2,778

+2%

Polymers (kt)

2,377

2,395

-1%

Vapocracker utilization rate**

88%

83%

* Olefins.

** Based on olefins production from steamcrackers and their treatment capacity at the start of the year.

Refinery throughput decreased 18% in the first half 2021 compared to the previous year, mainly due to the prolonged voluntary economic shutdown of the Donges refinery given the low European margins, the planned major shutdown of the Leuna refinery in Germany, the shutdown of the Grandpuits refinery in the first quarter 2021 for its conversion to a zero-oil platform, and the sale of the Lindsey refinery in the United Kingdom. The decrease was partially offset by the restart of the Feyzin refinery, in France, and the distillation unit at the Normandy platform, following a fire at the end of 2019.

Monomer production increased slightly in the first half 2021 compared to a year ago thanks to the restart of the Feyzin refinery, in France, after a major shutdown in 2020.

Polymer production also increased slightly in the first half 2021 compared to a year ago, despite the major shutdown in the second quarter 2021 of the Feluy plant in Belgium.


1.4.3.2.2 Results

In millions of dollars

1S21

1S20

1S21 vs 1S20

Adjusted net operating income*

754

957

-21%

Organic investments

501

470

+7%

Net acquisitions

(55)

(51)

ns

Net investments

446

419

+6%

Operating cash flow before working capital changes**

1,147

1,670

-31%

Cash flow from operations**

3,228

(103)

ns

* 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 for the Refining-Chemicals segment decreased 21% year-on-year to $754 million in the first half of 2021, due to still-depressed European refining margins that reflect the recovery in oil prices and the continued weak product demand, notably for distillates, linked to the reduced air transport, and to the outperformance of trading activities in the first half 2020. The first half 2021 results nevertheless benefited from the very good performance of petrochemicals.

Operating cash flow before working capital changes decreased by 31% to 1,147 M$ in the first half 2021.

Cash flow from operations increased to $3,228 million in the first half 2021 from $(103) million in the first half 2020, mainly due to a decrease in working capital requirements and a positive stock effect.

1.4.3.3 Marketing & Services
1.4.3.3.1 Petroleum product sales

Sales in kb/d*

1S21

1S20

1S21 vs 1S20

Total Marketing & Services sales

1,458

1,478

-1%

Europe

783

823

-5%

Rest of world

674

656

+3%

* Excludes trading and bulk refining sales.

In the first half 2021, petroleum products sales were stable overall year-on-year, as the slowdown in global activity due to the Covid-19 pandemic and the 50% decline in the aviation activity were offset by the global economic rebound seen in the second quarter of 2021.

1.4.3.3.2 Results

In millions of dollars

1S21

1S20

1S21 vs 1S20

Adjusted net operating income*

701

431

+63%

Organic investments

302

264

+14%

Net acquisitions

(49)

1

ns

Net investments

253

265

-5%

Operating cash flow before working capital changes**

1,185

882

+34%

Cash flow from operations**

1,102

420

x2.6

* Detail of adjustment items shown in the business segment information annex to financial statements.

** Excluding financial charges, except those related to leases.

In first half 2021, adjusted net operating income was $701 million compared to $431 million a year earlier. This increase was mainly related to the increase in global sales volumes in a context of rising margins.

Operating cash flow before working capital changes was $1,185 million in the first half 2021.

1.5 TotalEnergies results
1.5.1 Adjusted net operating income from business segments
Adjusted net operating income for the sectors was $7,519 million in the first half 2021, compared to $3,121 million a year earlier, due to higher oil and gas prices.

1.5.2 Adjusted net income (TotalEnergies share)
Adjusted net income (TotalEnergies share) was $6,466 million in the first half 2021 compared to $1,907 million a year earlier, due to the increase in oil and gas prices.

Adjusted net income excludes the after-tax inventory effect, special items and impact of changes in fair value(1).

Total net income adjustments(2) were $(916) million in the first half 2021, mainly comprised of the effect of the sale of TotalEnergies’ participation in Petrocedeño to PDVSA in Venezuela for an amount of $(1,379) million, a $1,064 million positive inventory effect, restructuring charges related to voluntary departures in France and Belgium and an impairment related to end of the Qatargas 1 contract.

The effective tax rate for TotalEnergies was 34.4% in the first half 2021, compared to 24.3% in the first half 2020.

1.5.3 Adjusted earnings per share
Adjusted fully-diluted earnings per share was $2.38 in the first half 2021, calculated based on 2,644 million weighted-average diluted shares, compared to $0.68 a year earlier.

As of June 30, 2021, the number of fully-diluted shares was 2,654 million.

1.5.4 Acquisitions – asset sales
Acquisitions were $2,870 million in the first half 2021 and included notably the acquisition, for $2 billion, of a 20% interest in the renewable projects developer in India, Adani Green Energy Limited, the 23% stake in a 640 MW offshore wind project in Taiwan, the Fonroche Biogas in France and Repsol’s interest in the Tin Fouyé Tabankort II field in Algeria.

Asset sales were $884 million in the first half 2021 and included notably the sale in France of a 50% interest in a portfolio of renewable projects with a total capacity of 285 MW (100%), the sale of the 10% interest in onshore block OML 17 in Nigeria, a price supplement relating to the sale of Block CA1 in Brunei, the sale of the Lindsey refinery in the United Kingdom, the sale of TotalEnergies’ interest in the TBG pipeline in Brazil, the sale of shares in Clean Energy Fuels Corp, and the sale of its interest in Tellurian Inc. in the United States.

1.5.5 Net cash flow
TotalEnergies’ net cash flow(3) was $4,551 million in the first half 2021 compared to $862 million a year earlier, which takes into account the $4.3 billion increase in operating cash flow before changes in working capital, partially offset by a $620 million increase in net investments to $7,167 million in the first half 2021.

1.5.6 Profitability
The return on equity was 8.4% for the twelve months ended June 30, 2021.

In millions of dollars

July 1, 2020
June 30, 2021

April 1, 2020

March 31, 2021

July 1, 2019

June 30, 2020

Adjusted net income

8,786

5,330

8,214

Average adjusted shareholders' equity

109,135

109,448

Return on equity (ROE)

8.4%

4.9%

7.5%

The return on average capital employed was 7.2% for the twelve months ended June 30, 2021.

In millions of dollars

July 1, 2020
June 30, 2021

April 1, 2020

March 31, 2021

July 1, 2019

June 30, 2020

Adjusted net operating income

10,252

6,915

10,125

Average capital employed

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