TotalEnergies(US:TTE)2020-02-09 16:43Financial Data and Key Metrics Changes - The company faced a weaker environment in 2019, with average oil prices down by approximately 20%, gas prices down by about 10%, and refining margins down by around 40% [15][66] - Despite this, the company demonstrated resilience, with net adjusted results down by only 14% and cash flow increasing by $2 billion to over $26 billion, marking an 8% increase [15][66] - Adjusted net income was reported at $11.8 billion, with a return on equity of 10.4%, the highest among peers [71][94] Business Line Data and Key Metrics Changes - Upstream generated $18 billion in cash flow, up 1% year-over-year, while iGRP saw an impressive 8% growth to $3.7 billion, driven by a 60% increase in LNG sales [67][68] - Downstream maintained stable cash flow at $6.6 billion despite a 10% decrease in refinery margins [68][82] - Refining & Chemicals net operating result was $3.0 billion, reflecting lower margins, while Marketing & Services contributed $1.7 billion [74][82] Market Data and Key Metrics Changes - Oil demand grew by 1 million barrels per day in 2019, slightly below the three-year average of 1.5 million barrels per day [41][42] - LNG market growth accelerated to 13% in 2019, driven by lower prices and favorable local climate policies [52][54] - European gas demand for power generation saw significant growth, with a notable increase in gas power plant load factors due to cheaper LNG [59][60] Company Strategy and Development Direction - The company focuses on operational excellence and cost control as key pillars of its strategy, aiming to deliver the most from its assets [17][20] - The strategy includes being countercyclical, taking advantage of market opportunities, and enhancing LNG production capabilities [20][22] - The company aims to reduce its breakeven point below $25 per barrel and has set ambitious targets for greenhouse gas emissions reduction [70][98] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by a weaker commodity price environment but emphasized the company's ability to maintain cash flow and operational performance [63][66] - The outlook for 2020 includes cautious optimism regarding demand growth, despite uncertainties related to the virus outbreak in China [44][45] - The company remains committed to its strategic goals, including production growth and cost discipline, with expectations of 2% to 4% production growth in 2020 [103] Other Important Information - The company reported a total recordable injury rate of 0.8, indicating ongoing improvements in safety, although four fatalities were noted, prompting a renewed focus on zero fatal accidents [26][28] - The company achieved significant cost savings of $4.7 billion in 2019 and targets an additional $5 billion in 2020 [75][90] - The company maintains a strong balance sheet with a gearing ratio of 20.7%, aiming to keep it below 20% [86][87] Q&A Session Summary Question: How does the company plan to manage the impact of the virus outbreak in China on demand? - Management indicated that while there is immediate demand disruption, it is too early to quantify the long-term impact, and they are cautious not to overreact [45] Question: What are the expectations for LNG production growth in 2020? - The company expects LNG production to continue growing, supported by new field startups and a strong market demand [102][103] Question: How is the company addressing safety concerns following recent incidents? - Management emphasized the importance of safety as a core value and is implementing measures to ensure zero fatal accidents, including working closely with contractors [28][10]