TotalEnergies SE - Q1 2025 Limited audit Review

(a) Except for per share amounts.                                                                                                                                                                                                         

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME                                               

TotalEnergies

(unaudited)

                                                                                                                                                  1^st quarter            4^th quarter               1^st quarter

(M$)                                                                                                                                                                                                                               2025                   2024                      2024

CONSOLIDATED BALANCE SHEET                                                                                                   

TotalEnergies                                                                                                                                                                    

                                                                                                                                              March 31,  December 31,                      March 31,

                                                                                                                                                   2025                       2024                         2024

Total liabilities & shareholders' equity                                                                                   291,057                 285,487                 283,133

Cash and cash equivalents at the end of the period                                                                             22,837                25,844                  25,640

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

(a)Treasury shares related to the performance share grants.                                                                                                                                                                                     

TotalEnergies

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  FOR THE FIRST THREE MONTHS 2025

(unaudited)

1) Basis of preparation of the consolidated financial statements

The consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and IFRS as published by the International Accounting Standards Board (IASB).

The interim consolidated financial statements of TotalEnergies SE and its subsidiaries (the Company) as of March 31, 2025, are presented in U.S. dollars and have been prepared in accordance with International Accounting Standard (IAS) 34 Interim Financial .

The accounting principles applied for the consolidated financial statements at March 31, 2025, are consistent with those used for the financial statements at December 31, 2024.  

The preparation of financial statements in accordance with IFRS for the closing as of March 31, 2025 requires the General Management to make estimates, assumptions and judgments that affect the information reported in the Consolidated Financial Statements and the Notes thereto.  

These estimates, assumptions and judgments are based on historical experience and other factors believed to be reasonable at the date of preparation of the financial statements. They are reviewed on an on-going basis by General Management and therefore could be revised as circumstances change or as a result of new information. 

The main estimates, judgments and assumptions relate to the estimation of hydrocarbon reserves in application of the successful efforts method for the oil and gas activities, asset impairments, employee benefits, asset retirement obligations and income taxes. These estimates and assumptions are described in the Notes to the Consolidated Financial Statements as of December 31, 2024.

Different estimates, assumptions and judgments could significantly affect the information reported, and actual results may differ from the amounts included in the Consolidated Financial Statements and the Notes thereto. 

Furthermore, when the accounting treatment of a specific transaction is not addressed by any accounting standard or interpretation, the General Management of the Company applies its judgment to define and apply accounting policies that provide information consistent with the general IFRS concepts: faithful representation, relevance and materiality.

2)   Changes in the Company structure

2.1) Main acquisitions and divestments

TotalEnergies did not make any significant acquisitions or divestments during the first three months of 2025.

2.2) Major business combinations

 Integrated LNG

Acquisition of the Upstream Gas Assets of SapuraOMV

In December 2024, TotalEnergies has finalized the acquisition of the interests of OMV (50%) and Sapura Upstream Assets (50%) in SapuraOMV Upstream (SapuraOMV), an independent gas producer and operator in Malaisia. In accordance with  TotalEnergies is assessing the fair value of identifiable acquired assets, liabilities and contingent liabilities on the basis of available information. The preliminary purchase price allocation is shown below:

                (M$)                                                                                                                At the acquisition date

2.3) Major divestment projects

On July 17, 2024, TotalEnergies announced that its subsidiary TotalEnergies EP Nigeria signed a sale and purchase agreement (SPA) with Chappal Energies for the sale of its 10% interest in the SPDC JV licenses in Nigeria.

As of March 31, 2025, the assets and liabilities are respectively classified in the consolidated balance sheet as

amount of $980 million. These assets mainly include tangible assets.

3) Business segment information

Description of the business segments

Financial information by business segment is reported in accordance with the internal reporting system and shows internal segment information that is used to manage and measure the performance of TotalEnergies and which is reviewed by the main operational decision-making body of TotalEnergies, namely the Executive Committee.

The operational profit and assets are broken down by business segment prior to the consolidation and inter-segment adjustments.

Sales prices for transactions between business segments approximate market prices.

The reporting structure for the business segment is based on the following five business segments:

-         An Exploration & Production segment that encompasses the activities of exploration and production of oil and natural gas, conducted in about 50 countries;

-         An Integrated LNG segment covering the integrated gas chain (including upstream and midstream LNG activities) as well as biogas, hydrogen and gas trading activities;

-         An Integrated Power segment covering generation, storage, electricity trading and B2B-B2C distribution of gas and electricity;

-         A Refining & Chemicals segment constituting a major industrial hub comprising the activities of refining, petrochemicals and specialty chemicals. This segment also includes the activities of oil Supply, Trading and marine Shipping;

-         A Marketing & Services segment including the global activities of supply and marketing in the field of petroleum products; 

In addition the Corporate segment includes holdings operating and financial activities.

Definition of the indicators

Adjusted Net Operating Income

TotalEnergies measures performance at the segment level on the basis of adjusted net operating income. Adjusted net operating income comprises operating income of the relevant segment after deducting the amortization and the depreciation of intangible assets other than mineral interest, translation adjustments and gains or losses on the sale of assets, as well as all other income and expenses related to capital employed (dividends from non-consolidated companies, income from equity affiliates and capitalized interest expenses) and after income taxes applicable to the above, excluding the effect of the adjustments describe below.

The income and expenses not included in net operating income adjusted that are included in net income TotalEnergies share are interest expenses related to net financial debt, after applicable income taxes (net cost of net debt), non-controlling interests, and the adjusted items.

Adjustment items include:

a) Special items

Due to their unusual nature or particular significance, certain transactions qualifying as "special items" are excluded from the business segment figures. In general, special items relate to transactions that are significant, infrequent or unusual. However, in certain instances, transactions such as restructuring costs or assets disposals, which are not considered to be representative of the normal course of business, may qualify as special items although they may have occurred in prior years or are likely to occur in following years. b) The inventory valuation effect

In accordance with IAS 2, TotalEnergies values inventories of petroleum products in its financial statements according to the First-in, First-Out (FIFO) method and other inventories using the weighted-average cost method. Under the FIFO method, the cost of inventory is based on the historic cost of acquisition or manufacture rather than the current replacement cost. In volatile energy markets, this can have a significant distorting effect on the reported income. Accordingly, the adjusted results of the Refining & Chemicals and Marketing & Services segments are presented according to the replacement cost method. This method is used

of its main competitors. 

In the replacement cost method, which approximates the Last-In, First-Out (LIFO) method, the variation of inventory values in the statement of income is, depending on the nature of the inventory, determined using either the month-end prices differential between one period and another or the average prices of the period rather than the historical value. The inventory valuation effect is the difference between the results under the FIFO and the replacement cost method.

c) Effect of changes in fair value 

The effect of changes in fair value presented as an adjustment item reflects for trading inventories and storage

and the accounting for these transactions under IFRS.

IFRS requires that trading inventories be recorded at their fair value using period end spot prices. In order to best reflect the management of economic exposure through derivative transactions, internal indicators used to measure performance include valuations of trading inventories based on forward prices. 

TotalEnergies, in its trading activities, enters into storage contracts, whose future effects are recorded at fair

Furthermore, TotalEnergies enters into derivative instruments to risk manage certain operational contracts or assets. Under IFRS, these derivatives are recorded at fair value while the underlying operational transactions are recorded as they occur. Internal indicators defer the fair value on derivatives to match with the transaction occurrence. 

3.1) Information by business segment

3.2) Adjustment items

The main adjustement items for the first three months 2025 are the following:

Profits Levy in the United Kingdom on deferred tax.

The detail of the adjustment items is presented in the table below.

ADJUSTMENTS TO NET OPERATING INCOME                                                                                                                                                       

                                                                                Exploration       Integrated        Integrated        Refining       Marketing       Corporate         Total

                                               Restructuring charges                     -                    -                    -                   -                   -                   -                   -

1^st quarter 

                                         Inventory valuation effect                    -                    -                    -                93                14                   -                  107

2024

                                   Effect of changes in fair value                     -                 38              (358)                  -                   -                   -               (320)

Gains (losses) on disposals of

                                                                                (9)            -               -               -               1,516       -               1,507 assets

4)  

Treasury shares (TotalEnergies shares held directly by TotalEnergies SE)

At its meeting on February 4, 2025, the Board of Directors decided, following the authorization of the Extraordinary

27, 2023 and November 19, 2024.

Dividend

On February 4, 2025, the Board of Directors, after approving the financial statements for fiscal year 2024, decided to

Dividend 2024                             First interim                      Second interim                        Third interim                               Final

The Board of Directors, at its meeting on April 29, 2025, set the first interim dividend for the fiscal year 2025 0.85 per share. The ex-dividend date of this interim dividend will be October 1, 2025 and it will be paid in cash on October 3, 2025.

Earnings per share in Euro

Earnings per share in Euro, calculated from the earnings per share in U.S. dollars converted at the average

Earnings per share are calculated after remuneration of perpetual subordinated notes.

Perpetual subordinated notes

TotalEnergies SE has not issued any perpetual subordinated notes during the first three months of 2025.

In February 2025, TotalEnergies SE has redeemed subordinated notes carrying a coupon of 2.625%, issued in February 2015, on their first call date.

Other comprehensive income

Detail of other comprehensive income is presented in the table below: 

(M$)                                                                                                                                 1^st quarter 2025                   1^st quarter 2024

                                                                                                                                                                                                         (2)

                                                                                                                                                                                                        40

                                                                                                                                                                                                         (8)

                                                                                                                                                                                                  (1,506)

                                                                                                                                                                                                   1,099

                                                                                                                                                                                                   1,097

                              (2)                            

                                                                                                                                                                                                      807

                                                                                                                                                                                                      763

                                                                                                                                                                                                       (44)

                                                                                                                                                                                                       (15)

                                                                                                                                                                                                       (41)

                              (26)                          

                                                                                                                                                                                                       (76)

                                                                                                                                                                                                       (78)

                                                                                                                                                                                                        (2)

                                                                                                                                                                                                          2

                                                                                                                                                                                                     (219)

Tax effects relating to each component of other comprehensive income are as follows:

5) Financial debt

The Company has issued senior bonds across three tranches in the Euro markets in February 2025:

-         1,000 million of euros at 3.160% issued by TotalEnergies Capital International and maturing in March 2033; -       850 million of euros at 3.499% issued by TotalEnergies Capital International and maturing in March 2037;

-         1,300 million of euros at 3.852% issued by TotalEnergies Capital International and maturing in March 2045.

The Company has redeemed two senior bonds during the first three months of 2025:

-         1,000 million dollars at 2.434% bond issued by TotalEnergies Capital International in 2019 and maturing in January 2025;

-         850 million euros at 1.375% bond issued by TotalEnergies Capital International in 2014 and maturing in March 2025.

6) Related parties

The related parties are mainly equity affiliates and non-consolidated investments. 

There were no major changes concerning transactions with related parties during the first three months of 2025.

7) Other risks and contingent liabilities

TotalEnergies is not currently aware of any exceptional event, dispute, risks or contingent liabilities that could have a material impact on the assets and liabilities, results, financial position or operations of the TotalEnergies company, other than those mentioned below.

Yemen

In Yemen, the deterioration of security conditions in the vicinity of the Balhaf site caused the company Yemen LNG, in which the TotalEnergies company holds a stake of 39.62%, to stop its commercial production and export of LNG and to declare force majeure to its various stakeholders in 2015. The plant has been put in preservation mode.

Mozambique 

Considering the evolution of the security situation in the north of the Cabo Delgado province in Mozambique, the TotalEnergies company has confirmed on April 26, 2021, the withdrawal of all Mozambique LNG project personnel from the Afungi site. This situation led the Company, as operator of Mozambique LNG project, to declare force majeure. 

Legal and arbitration proceedings -    Disputes relating to Climate 

associations and local communities in order to oblige the Company to complete its Vigilance Plan, by identifying in detail risks relating to a global warming above 1.5 °C, as well as indicating the expected amount of future greenhouse gas emissions related to the Company's activities and its product utilization by third parties and in order to obtain an injunction ordering the Corporation to cease exploration and exploitation of new oil or gas fields, to reduce its oil and gas production by 2030 and 2050, and to reduce its net direct and indirect CO₂ emissions by 40% in 2040 compared with 2019. This action was declared inadmissible on July 6, 2023, by the Paris Civil Court of Justice to which the case was transferred following a new procedural law. Following the appeal filed by the claimants, the Paris Court of Appeal, in a judgment of June 18, 2024, considered the action initiated admissible in particular on the basis of the law on the duty of vigilance transferring the case for trial on the merits before the Paris Civil Court of Justice, while strucking out 17 of the 22 applicants as well as declining to awards any provisional measures. TotalEnergies SE considers that it has fulfilled its obligations under the French law on the vigilance duty. A new action against the Corporation, with similar requests for injunction, has started in March 2024 before the commercial court of Tournai in Belgium.

Some associations in France brought civil and criminal actions against TotalEnergies SE, with the purpose of

proving that since May 2021                          after the change of name of TotalEnergies                

communication and its publicity campaign contain environmental claims that are either false or misleading for the consumer. TotalEnergies considers that these accusations are unfounded.

In France, on July 4, 2023, nine shareholders (two companies and 7 individuals holding a small number of the Corporation's shares) brought an action against the Corporation before the Nanterre Commercial Court, seeking the

recording the results for fiscal year 2022 and setting the amount of the dividend to be distributed for fiscal year 2022. The plaintiffs essentially allege an insufficient provision for impairment of TotalEnergies's assets in the financial statements for the fiscal year 2022, due to the insufficient consideration of future risks and costs related to the consequences of greenhouse gas emissions emitted by its customers (scope 3) and carbon cost assumptions presented as too low. The Corporation considers this action to be unfounded.

In the United States, several US subsidiaries of TotalEnergies were summoned, amongst many companies and professional associations, in several "climate litigation" cases, seeking to establish legal liability for past greenhouse gas emissions, and to compensate plaintiff public authorities, in particular for resulting adaptation costs. The Corporation was summoned, in some of these claims along with these subsidiaries and considers that the courts lack jurisdiction, that it has many arguments to put forward, and considers also that the past and present behavior of the Company does not constitute a fault susceptible to give rise to liability.

-          Mozambique

In France, victims and heirs of deceased persons filed a complaint against the Company in October 2023 with the Nanterre Prosecutor, following the events perpetrated by terrorists in the city of Palma in March 2021. This complaint

The Corporation considers these accusations as unfounded in both law and fact¹.

-          Kazakhstan

On April 1st, 2024, the Republic of Kazakhstan filed a Statement of Claims in the context of an arbitration involving TotalEnergies EP Kazakhstan and its partners under the production sharing contract related to the North Caspian Sea. TotalEnergies EP Kazakhstan and its partners consider this action to be unfounded. Therefore, it is not possible at this date to reliably assess the potential consequences of this claim, particularly financial ones, nor the date of their implementation.

8) Subsequent events 

In April 2, 2025, following the agreements signed in 2024, TotalEnergies finalized the acquisition of VSB Group, a European wind and solar developer with extensive operations in Germany, for a consideration of  billion.

1 Refer to the press release published by the Company on October 11, 2023 contesting the accusations.