TotalEnergies enjoys OPEC+ compliance, demand
French TotalEnergies saw its Q2 net income and adjusted earnings multiply year on year, in common with its peers that have so far reported. They benefited from the surge in commodity prices – oil was up 13% and gas 18% on Q1 2021 – and demand for plastics, while suffering from poor European refining margins.
Reporting adjusted Ebitda of $8.67bn (up 2.2 times) and adjusted net income of $3.46bn (up 28 times), it said OPEC+ discipline on crude exports and progressive global recovery demand were the main causes.
Adjusted net income and cashflow from upstream were about 10% more than in Q1 2021, at $2.2bn and $4.3bn respectively, despite maintenance and field decline meaning 4% less production at 2.75mn barrels of oil equivalent/day than in Q1. In Q2 2020 the upstream sector had made a loss of $209mn as crude and gas prices plummeted.
Integrated gas, power and renewables saw Q2 adjusted net income almost treble year-on-year to $891mn, and LNG prices were up 8% on the quarter as higher crude prices and greater competition among buyers pushed prices up on the long-term contract and spot markets respectively.
Sales of 10.5mn metric tons (mt) over the quarter were similar year on year, and of that, 4.2mn mt were equity, again as in Q2 2020. This was despite the maintenance at the liquefaction trains at Ichthys, Australia; and the shut-down of the Snohvit LNG project in Norway. Its average gas sales price was up 60% at $4.43/mn Btu while LNG averaged $6.6/mn Btu in Q2.
Net cashflow of $3.2bn covered the dividend of $2.1bn and some debt repayment, bringing gearing down below the target 20%. It now stands at 18.5%. TotalEnergies also plans buybacks, using 40% of the revenue generated at prices above $60/barrel of crude to do so.