The Shareholders' Newsletter #74 Summer 2024

The results for the first quarter 2024 provide a further demonstration of the relevance of the Company’s balanced transition strategy. Anchored on two pillars, hydrocarbons and power, that strategy is delivering strong results and an attractive shareholder return.

In a context of sustained oil prices and refining margins but softening gas prices, the Company announced adjusted net income of $5.1 billion and cash flow of $8.2 billion, in line with its ambitious 2024 objectives.

Oil & gas production was 2.46 Mboe/d, benefiting from 6% quarter-to-quarter production growth in LNG and from start-ups at Mero 2 in Brazil and Akpo West in Nigeria. The Company positively appraised the Venus discovery in Namibia and Cronos in Cyprus. Exploration & Production delivered adjusted net operating income of $2.6 billion and cash flow of $4.5 billion, and confirms its leadership as a low-cost operator with operating costs below $5/boe.

Integrated LNG achieved adjusted net operating income of $1.2 billion and cash flow of $1.3 billion for the quarter in a softening and less volatile price environment. The Company strengthened its integration in the LNG value chain with the acquisition of Lewis Energy Group’s upstream natural gas assets in the Eagle Ford Basin in the United States, and with the signature of an LNG sales agreement to Sembcorp in Asia. The Company further deployed its multi-energy strategy in Oman, launching the full electric and ultra-low-emission (3 kg/boe) Marsa LNG project that primarily targets the marine fuels market and also developing an 800 MW portfolio of wind and solar projects, including the 300 MW solar project that will supply Marsa LNG.

Integrated Power generated sequentially higher adjusted net operating income of $0.6 billion and $0.7 billion of cash flow, with a return on average capital employed reaching 10%, confirming the Company’s ability to grow profitably across the electricity value chain. TotalEnergies enhanced its integrated position in Texas through a 1.5 GW flexible gas capacity acquisition that closed this quarter.

Downstream adjusted net operating income was $1.2 billion and cash flow was $1.8 billion, benefiting from strong refining margins during the quarter. The Company finalized the divestment of part of its European retail network to Alimentation Couche-Tard and advanced its development in sustainable aviation fuels (SAFs) through partnerships with Airbus and Sinopec.

Given these strong results, in line with TotalEnergies’ ambitious 2024 objectives, the Board of Directors approved the distribution of a first interim dividend of €0.79/share for fiscal year 2024, an increase of close to 7% compared to 2023, and authorized the Company to buy back $2 billion in shares in the second quarter of 2024.

This indicator measures a company’s ability to generate cash flow from its operating activities before changes in working capital, i.e. the necessary liquidity to fund the operating cycle. The CFFO is obtained by adjusting cash flow from operating activities according to IFRS accounting standards for certain items that are specific to the company, such as inventory replacement costs, the impact of contracts measured at fair value, capital gain from renewable project sales and loan repayments from equity affiliates. Consequently, the CFFO can be used to compare the company’s performance with its peers on a uniform basis and to determine the share of its cash flow available to be remunerated to shareholders or invested in new projects.