Q1 2025 TotalEnergies SE Earnings Call
Okay.
Ladies and gentlemen, and welcome to the total Energy's first quarter of 2025 results Conference call I now hand over to Patrick for your knee Chairman and CEO and jumped yeah Plaid CFO will lead you through this cool Sir Please go ahead.
Speaker Change: Good afternoon, everybody or good morning to our connected from the U S.
Before.
We go through the detail of the first quarter results.
We'd like to just make some few opening remarks on.
Speaker Change: Although once distribute today.
Speaker Change: More challenging global environment in terms of ways, but the thing that was just in terms to leverage.
Speaker Change: Consistent strategy to deliver because you have to resolve.
But if you do promote I know she's putting some rules.
Speaker Change: A positive shareholder returns.
Speaker Change: We have entered into a period of heightened macroeconomic and geopolitical uncertainty.
Speaker Change: We even his list is not exhaustive procurement farzana negotiations on the Ukrainian hirschmann conflicts.
Speaker Change: But fluid Dummies 40 C and that's despite the U S.
Speaker Change: As you all know OPEC plus.
Speaker Change: And the way it is for them to reach production.
Speaker Change: Yes.
Speaker Change: You've only three impacts are not yet fully I. Appreciate this might evolve in the coming months vs. Moving context speaking uncertainties.
Speaker Change: Notably on order demand, along along with volatility in the market or in market.
Speaker Change: Oriented on the downside of it was the past few weeks and also on costs for new projects in the U S. Because subservicing partners.
Speaker Change: And it's quite Oh, it's a freeze in the landscape.
Speaker Change: As us.
Speaker Change: And I.
Speaker Change: I would say.
Speaker Change: Continue our unique strengths.
Speaker Change: We have consistently built over the last 10 years.
Speaker Change: I'm always full stop being so close.
Speaker Change: Since almost.
Speaker Change: We have been strong and never gave up on and yes, we have built.
Speaker Change: Austin, Yes, one of the best low cost, drawing Michelle Sona and gas portfolio.
Speaker Change: We move on to the views of reserves lives, which today gives us substantial leverage boost claim and expect these rules right.
Speaker Change: But do you have any differentiation Bose this is deliberate.
Delivering this growth is of course.
Speaker Change: One way to protect all future cash flows.
Speaker Change: We are growing companies with two pillows, including Cigna below electricity, which is not dependent depend on the arbitrage, which given additional religion yards to our model.
Speaker Change: You will see we've shops average quarter with diversity.
Speaker Change: You're on your producer roof, or nearly 4% New Orleans, and 18% of the specie, which presents a unique deal done and as you put the jungles of close to 5%.
Speaker Change: But we are also at the same time controllable cost.
Speaker Change: Oh, Capex first because most of them.
Speaker Change: Oh Capex have been engaged at all based on a lump sum EPC contracts are secured.
Speaker Change: Capex, but also on the Opex side, we have maintained a in the last year. Despite the inflationary.
Speaker Change: So as a cost per barrel of oil.
Speaker Change: So barbara eaten away about $5 per borrower and again this quarter.
Speaker Change: And finally, we are benefiting and all balance sheet remains strong.
Speaker Change: Countries as you know our ability to achieve a gross orders in Q4, 25 and keep figuring under control.
Speaker Change: Yeah.
Speaker Change: Because we have confidence in our business model.
Speaker Change: <unk> has decided to maintain attractive share where joey subs, despite the uncertain environment.
Speaker Change: The world's first and foremost confirms the first interim dividend.
Speaker Change: Which was announced.
Speaker Change: In February, but 85 euro per share, which is a seven 6% increase compared to 24 instead.
Speaker Change: So I would say, it's even more than that it's more than 10% at current exchange rates of 1.14.
Speaker Change: As you know <unk> is our first priority.
Speaker Change: Our location framework.
Speaker Change: And will continue.
Speaker Change: To maintain and to Rubens dividends in should you use.
Speaker Change: These uncertain times with governments remember what we do.
Speaker Change: So dividends during COVID-19 periods.
Speaker Change: Our suits will Cortez neuro of 2 billion more or share buybacks of boards is once again announce share buybacks of up to 2 billion. So obviously going forward to.
Speaker Change: Despite a softening price Townsville it must be Bryan Burrough suite.
Since the beginning of a board and so it sounds you're pretty core to the macroeconomic context.
Speaker Change: Just as we have Don during OBO horizontal time supposedly concierge to him when he does a buyback on a quarterly basis.
Speaker Change: We beat the guidance, we gave to the market last September to maintain at $2 billion buyback in Reis on the broader market conditions.
Speaker Change: And to conclude towards me to in my remarks, as you would see again today. We've all Q1 results I think we are well equipped and prepared to navigate uncertain environments.
Speaker Change: We remain focused on delivering on all 2025 or six years and to manage them as far to shorter leases.
Speaker Change: On the bus notes I will know turn to.
Speaker Change: Yeah, we'll go for the details of the first quarter results.
Speaker Change: Yes. Thank you. So my first comments, we need them to place 11 months into the first quarter that was globally similar to the environment. We had in the fourth quarter of 24.
Speaker Change: So behind Suez.
Speaker Change: 76, blah blah blah.
Speaker Change: Good luck in the fourth quarter GTA, if you'll look on gas price was $14 four upper limit to U C.
Speaker Change: <unk> compared to Q4 and the other way.
Speaker Change: Energy price was stand it up I'm gonna be EU down 4% compared to Q4.
Speaker Change: And the euro as well and you get also European refining mountain remain weak regime 29 got up there although the quarter. So in this context. The companion reported adjusted net income of $4 2 billion to that and assess it full of 7 million below the first quarter of 'twenty five.
Speaker Change: Coffee <unk> tea remain robust with return on capital employed.
Speaker Change: For the 12 months ending in March.
Speaker Change: Pinpoint to defense.
Speaker Change: So a little more but they didn't actually continues.
Speaker Change: So I think all of those that's what he showed up distribution with $2 billion.
Speaker Change: The EQT can do in the first quarter and aesthetic mentions a seven 6% year on year increase in the first and getting have you done of 20 520 point 85 Youll go sure.
Speaker Change: Which is up 20%.
Colby: Hey, Colby.
Speaker Change: Now moving to the business segment results and starting with others join society is off to a strong start.
Colby: First quarter production was stable.
Colby: And does the guidance range at two points 56 media buying public we didn't build it with 19% growth year on year.
Colby: But you said benefited from continued ramp up of projects in Brazil.
Colby: Stage in Malaysia.
Colby: In Denmark.
Colby: In addition, we continue to be successful at keeping operating cost at low level.
Colby: It was $4 9 billion up about I think with a lot during the first quarter.
Colby: Looking for a second what's up with the fed is expected to O, 2% to 3% year on year.
Colby: Are you seeing more cloud methanol compared to what's up what's up which has an impact of around 50000 barrels of oil equivalents.
Colby: Neither this call 4% growth achieved in the first quarter, we hasty rights fully off 25 predictions with guidance of more than 3% compared to 24.
Colby: Moving now to its relation and put a check.
Colby: The company continues to execute very well.
Colby: <unk> reported strong ongoing.
Colby: The results we've addressed the net operating income of $2 5 billion and as cash flow or $4 <unk> in the first quarter, but 6% and 9% quarter to quarter.
Colby: Absolutely.
Colby: No real cost and low emission oil plagues, yet we generated roughly an additional one I leave me at all casual.
Colby: With where the portfolio average would that developed during the first quarter.
Colby: We anticipate additional known closings.
Colby: Close together with the bedroom offshore field in the U S. Having achieved first oil.
Colby: Mill for <unk> expected to be online in the stuck with them.
Colby: Both of which are high margin barrels that way.
Colby: That's the gasoline.
Colby: Okay.
Moving on to integrate tw.
Colby: And then he says about stable at $10 6 million ton and achieved adjusted net income of $1 six.
Colby: <unk> year on year, and 10% quarter over quarter in line with the evolution of your average LNG price are recommended.
Colby: Compared to last quarter that true up was going to be into that was impacted by the timing effects of peanuts from somebody quits yet yes.
Colby: And then he said it continues to perform in line with expectations for 2005.
Colby: Yes, Craig reserves.
Colby: Unexpected downturn of European markets.
Colby: We knew entity, that's definitely on the voting shares of the Russia, Ukraine, yet coffees.
Colby: But all European market expect gas prices to remain elevated in the second quarter FY device in a context of inventory and instruments in Europe.
Colby: Yeah.
Colby: Neither in the evolution of oil and gas <unk> excellent malls and the lag effect on <unk> com, yes.
Colby: But then he LTC base Adelaide <unk> selling price will be between nine and nine point site built up I'm going to be to you in the second quarter of 'twenty five.
Colby: Paul and to go deeper on that first quarter. Adjusted net income was $5 million and catch rule was seeks a lead me into.
Colby: So basically this quarter do not include anybody even impact will sound zone, which are expected later in the year. Thus, it's a matter of timing and it's right in the 1% temporary decrease in voyage at two 9% this quarter, which is expected to come down.
With progress.
Colby: Looking forward the company is on track to achieve your annual cash flow guidance.
Colby: Additionally, we are progressing on multiple fronts and you can take that keep our sigma. So if any of you sounding to paying them clean power contract, we estimate polyclinics or five points higher than.
Colby: What they were 15 years moving into first quarter. In addition, the company. So they'll deploy it is difficult to see if you can take that keeps our modeled in Germany with the launch of six new battery storage projects they've looked at the company that we acquired that you're doing with them and the quality of the acquisition or the renewables developer.
Colby: <unk> closed earlier this month.
Speaker Change: Turning now to Delphine.
Delphine: In the context of weak resigned Martinez to give are we declining pick what chemicals and value not only in Europe, but don't see posted adjusted net income was elephant type you can go out.
Speaker Change: And the cash flow of $1 12 billion to that.
Delphine: What's up 25.
Speaker Change: Yes sure.
Speaker Change: It was impacted by several factors first one being the usual seasonal seasonal dip.
Speaker Change: In the market and services businesses and the timing in fact, well give you those payments from equity I forget in refining and chemicals the beam debts. The met coal, although I remember remain challenged with refining petrochemicals and dilution mountain lower than our planning case impacting cash flow base of about 115.
Speaker Change: Uh huh.
Speaker Change: On operations, we encountered some issues at those refineries and Boston refinery, that's negatively impacted cash flow by about 200 million.
Speaker Change: This.
Speaker Change: Issuers go off to being as old and work continues at Dovish language.
Speaker Change: However, there are no systemic issues definitely mall sweat strong total sites such as on basketball Arena.
Speaker Change: The global refining utilization rate to 87% in the first quarter of which five from 'twenty 182.
Speaker Change: In the first quarter.
Speaker Change: Okay.
Speaker Change: Let's move now to the company level.
Speaker Change: As a company level net investment put towards.
Speaker Change: $4 9 billion without doing the first quarter and we hate their rates for your.
Speaker Change: 25, <unk> in the range of 17 to $17 5 billion thereof.
Speaker Change: We reported a seasonal working capital of $4 4 billion to underscore though.
Speaker Change: That's how you have to remind you that is less than the 6 million donuts coffee in the first quarter of 'twenty for any line. In fact, we the three four to $4 4 billion reported in the first quarter 'twenty two 'twenty three.
Speaker Change: The drivers of each quarter, our working cap E&ps are mainly first when you're already there.
Speaker Change: Sort of exceptional working cap items reported in the fourth quarter are plentiful.
Speaker Change: Secondly, your 2 billion there are seasonal effects from gas and power distribution activities in Iraq, and the ability to advance payments occurring in the first quarter of 2005 and felt the $1 billion.
Speaker Change: Evolution of the business, but it's two stocks and sales increased at the end of the quarter.
Speaker Change: Lastly, the balance sheet remains strong, giving us at 14 points of sense, but as indicated earlier the $4 4 billion without looking at each quarter is highly seasonal excluding these impacts the visa Medici the normalized getting would be Alan lymphocytes.
Mike: So that he can Mike says all available to answer all your questions. So please open up the line.
Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session.
Speaker Change: As a reminder, if you wish to ask a question. Please press star and one on your telephone and wait for your name to be announced.
Speaker Change: Please contact me with any audio sources, while asking question.
Speaker Change: If you wish to cancel your request please press star two.
Speaker Change: Once again, please press Star then one.
Speaker Change: The first question is from Doug Leggate of Wolfe Research.
Doug Leggate: Hi, Good morning, a very early morning from Houston, Patrick and G. P. Thanks for taking my question.
Doug Leggate: I think the reaction to the debt moved this quarter R. J P is obviously weighing on your stock and I think this is probably thank you for the explanation on the moving parts, but I think it begs the question.
Doug Leggate: How do you think about standing the 40% payout share buyback.
Doug Leggate: If that means that you end up leaning on the balance sheet to fund the capital program. What is the trade off how resilient our how much would you be prepared to continue to do that is there a limit where.
Doug Leggate: The buyback would become the payout would become on the question and I have a follow up please.
Doug Leggate: Because of 40% or go through full buyback is not.
Doug Leggate: 40% of cash flow is not the door into question.
Doug Leggate: And the strong guidance so it would be about 40% by the end of the year, Kevin committed to that's what we said about the buyback I remind you. The guidance. We gave you in September is that and I.
Doug Leggate: I repeated in my speech. He said our guidance is to maintain a $2 billion buyback per quarter and is on the broader market conditions. The board, obviously considered but these conditions.
Doug Leggate: Conditions that we experienced during the first quarter and even since the beginning of April or whether I remind you US forward as there was 265 70 got up and going down.
Doug Leggate: We've given you a set of recent LIBOR market conditions of course would be appreciated.
Doug Leggate: Global slipped one based up one specific price limits, it's more a globe board I would say our approach is a macro economic so we observe like you in fact, the world as I said, it's very uncertain because these stories.
Doug Leggate: It seems to be a hit but it's quite fluid that we could expect maybe the ways to come back to more was unable to approach on all of that is not in bulk seaborne that oh, we have to adapt ourselves. That's one of the difficulties and so in fact, the reaction of the board like we've done joining Phil. This is our first openings the fundamentals of the company are strong.
Doug Leggate: Our strong cash flow so why should we overreact today no let's look because we could see some 46 challenge on the one side there. Besides it's true, but the oil markets and in fact I'm more looking to on all sides of what's the Opex plus we'll do in Fox is more important for us really.
Doug Leggate: In this type of environment.
Doug Leggate: So that's why you know, it's 40% for sure of cash through distributions keep it as a strong guidance, but I remind you last year.
Doug Leggate: 50% about 40%.
Doug Leggate: And by the way I think if we the first quarter with 4 billion of buybacks plus a strong commitment to the dividends as we said.
Doug Leggate: What they've said permanently.
Doug Leggate: As far as dividends as opposed to irrigation is means that we are on the basis of 12 billion dollar at least in more between 12 and 16 I would say obviously you make the math you will find you a 40% so no no points about this you can be sure of it and again you said.
Doug Leggate: An important part of the debt, it's why what we wanted to do at the board. The board is what this concept of a normalized gearing that we shared with you which was not because I was sure about your reaction of the market in these kind of thick and we monitor it and in fact as we told you at the beginning in February at $70 per borrower we're targeting.
Doug Leggate: The gearing by 12 or 13% as of a year to date, we've always excluding service sees a lot of FX, we would be at 11%. So honestly there is no fee maybe is there a price is at $65.
Doug Leggate: 70, it will be something around 14, instead of two efforts invest so yeah, our guidance, which works well so well at the board level I think we are confident that the fundamental work Roe.
Doug Leggate: Ooh is coming the Wolf is that Iraq, which is of course fundamental such as.
Doug Leggate: Ooh Ooh.
Doug Leggate: What are your Gulf Coast, we have a swung it's bill, yes, and so I could go on that and so we think is the best signal, which would send to our investors is a as I said like for the strategy to no consistency things or keep their word I want you to have in mind is that there is a consistent company and even more Windsor.
Doug Leggate: Under a month is unstable.
Doug Leggate: Rather than just making short term reactions is out the door. So the way we want it as a company for the last 10 years and the board is aligned on this.
Doug Leggate: Teachers.
Speaker Change: Thank you Patrick My follow up is related to that you have built in capital flexibility to the plant, particularly around integrated power you've talked about a $2 billion.
Speaker Change: <unk> what would it take for you in the microenvironment to consider our spending reduction on your net capital guidance and I'll leave it there. Thank you.
Speaker Change: So I think honestly I think I'm clear as well we have a plan we could have some flexibility no way to do to activate that again, we are at $65 a bottle of water.
Speaker Change: Confidence in the way to move forward, who reside here a month so it.
Brian: It does it point to point might be on the what could be led us is more of the impact of the tariff on the supply chain of for example, renewable projects in the U S. A Bachelor is project in the U S issue, Brian Some February 'twenty.
Brian: 25% or an importing indiana panels in the U S. Obviously.
Brian: We could save some money just to be clear.
Brian: Is that because we just took the decision to pay somebody on a there was a 600 megawatt projects, which was approved by the ex com by end of March after the tariff impact. We also teams to look again through it and we say, okay. Let's boil it will not invest we will postpone it maybe because it's nice because obviously we are not exactly.
Brian: We voted.
Brian: This project was more about is around 12% we saw if it's less than 10%. So we say boy we are not in the boardroom, but all the value we have to take gas. So thats the type of things, which could happen, but again, it's more on.
Brian: On the cost side the impact on the Capex side more because of the tariff and we lead to money till about precisely and not to be driven by volume of other value. So, but again I'm comfortable to maintain the guidance on the capex.
Brian: No question of flexibility more if we go down like during Covid. When we go down to lower than $60. Then we will have to act and as you follow us for longer than you know about doing COVID-19, we safe, we're able to save 50 billion. So we are not there we have some flexibility and again I know that Nicola Oswald the Shreveport.
Speaker Change: I was beginning to ask his teams okay, because there may be a $500 million could be activated. So it is beginning to take actions is level.
Brian: Corporate company live or.
Speaker Change: I'm fine to money to that we've got a balance sheet.
Brian: Thank you very much indeed, guys.
Speaker Change: The next question is from Makena, the Lavinia of Goldman Sachs.
Makena Lavinia: Thank you very much I had two questions. If I may 1st I wanted to come back to your point Patrick on Paris, It's pretty clear that they would materially impact the renewable business in the U S. But I was wondering if we they kudos to affect some of the oil and gas projects and also if if there could be any issue.
Makena Lavinia: The LNG vessels globally, given that so many of them are Chinese built and then the second question you may not have been answered, but I was wondering if you had a view on what happened to the Iberian power systems. These days and if there was anything in terms of structural change to the power systems with renewables that you think you need to.
Makena Lavinia: Right. Thank you.
Makena Lavinia: Okay on the tariff.
Makena Lavinia: You have to we have to be clear as I said I think this could have an impact.
Makena Lavinia: On the new projects, we shut to be sanctioned.
Makena Lavinia: And we have.
Makena Lavinia: In most of our projects that we have already the Rio Grande and want to fee are secured.
Makena Lavinia: Don't expect any impact on the tariffs because of about where security is strong contract EPC, which is going well by the way. There is an advanced <unk> device for you Randy is an advance or would you have 59% compared to 31% we had a good news by the way we report.
Makena Lavinia: As you lose a legal issue the permitting has been I havent been pushed away.
Makena Lavinia: We will on train four and will be five this is a topic on which we are expecting to see if there is an impact on the tariff because of tariff on steel for new projects backed by.
Makena Lavinia: Again.
Makena Lavinia: Difficulty might be more to be sure and which we show yes, we speak <unk> always speaking about is it defeated finally at the end of the deal.
Makena Lavinia: 10% across the board, Okay, that's probably could be absorbed because in fact in the U S projects remembers.
Makena Lavinia: Policy was not only increasing studies there was a sort of come to a measure which was to lower the tax of the income tax effects of tax.
Speaker Change: We don't have any stock, but you know this is also something we have to keep in mind that Tony and myself cautious of metal profits. It yeah. So if the cursor measures and the reconciliation Bill, which we've come before the end of the year is for me very important. So for me it's more at this stage its push into money to a six months uncertainty.
Makena Lavinia: I think we'll have much more clarity on the U S investments.
Makena Lavinia: <unk> by the end of the year, because we love, but Rudy Ortiz negotiation to the tariff would have landed so one way or the other and then the other side, we will have the beer, which lower Inc.
The corporate tax which of course is important in the U S system. So for me Thats a point so the way, we monitor that but I don't see the rest of the projects for us at this stage outside of the U S. We didn't see any impact on the dice certain issue. Your second question on the industry is sort of interesting because that's what they think.
Makena Lavinia: U S understand that if they want to export LNG, we vote Chinese vessels are afraid.
Makena Lavinia: Both will be limited and I think it has been raised I understand we basically.
Makena Lavinia: A lot of discussions and negotiations, but decided to sort of a special tax on all our vessels, which are not built in the U S. But they begin to see some I would say amendment. So a new way of I read the paper yesterday, but we are going in the right direction, but let's see yes. It has been always to be a U S authorities' vessels.
Makena Lavinia: Could be a yield issue, so everybody, including focus of ASIC voting for that so we know what it's a.
Makena Lavinia: Along with his last again, let's let's look at it so.
Makena Lavinia: Again, that's why again the board we took a position which is okay. No overreaction no panic lets look we will have more clarity a hope and getting out of this as more of the issues are is a lot of noise, but.
Makena Lavinia: I think at the end of the day business will prevail presenting to us will be there for everybody.
Speaker Change: She said no I know I don't know I know specific through I mean is that less service I think at the end.
Makena Lavinia: I will tell you what.
Speaker Change: What's happened and in fact, we observe what their opinion is.
Speaker Change: Germany in February when we had one week, we vote wins that struck me because I can tell you we have no problem in Germany, but one week. We both win if you don't have the full backup system with your guests by Bernard.
Speaker Change: But yes, it was more software for a venue of an issue and I think the lesson for me award that is that it's good time, when we speak about integrated power and deliberate to speak about today.
Speaker Change: With which needs to be adapted we observe and when degrees of more than 30% of renewable is become more stable. So we need to and investment in the grid and went back investment in flexible assets. I think is a truly since side pro forma so February event, and I'm suspecting that but again I have no specific.
Speaker Change: I'd.
Speaker Change: Yeah, Yeah, it might be the same type of in fact, it takes we can that's feet with renewables.
Speaker Change: We're going to be board seats that would work in that.
Speaker Change: This is not this.
Speaker Change: This is Elisa <expletive>, which in fact honesty, we can afford to be in our own strategy, which is to maintain these gas to power to get renewables. We gave a guidance 70 foods EBIT in both maybe we should adapt it to the future the more flexible assets.
Speaker Change: Money to this type of intermec.
Speaker Change: Intermittency and impacts on the system.
Speaker Change: Thank you.
Lee Gerry: The next question is from Lee Gerry fourth of Barclays.
Lee Gerry: Thank you and good afternoon everybody.
Speaker Change: Patrick if I just come back to the idea about the sustainability affordability the buyback.
Speaker Change: Part of the reason that they made that shortfall is that the pace of growth that title is delivering and I'm. Just wondering could you give us an idea of the difference in Capex that you would need just to keep the business flat.
Speaker Change: If we neglect to you are they really most of the growth Capex and the reason I ask that is it plenty others aren't living slightly higher free cash right.
Speaker Change: Less than two days.
Speaker Change: And then the second one.
Speaker Change: Just thanks again to the balance sheet is clearly showing at the moment, but that we can market always creates opportunities.
Speaker Change: How should we think about how you.
Speaker Change: If you would like to deploy the balance sheet.
Speaker Change: Acquisitions, though that's another way are there any holes in the portfolio that you would like to say thank you.
Speaker Change: Great question Saturday, Yes. Thank you.
Speaker Change: The first one <unk>.
Speaker Change: We are given by value. So we have some good fortunate in delivering equity value. So as the growth is coming from equities.
Speaker Change: Project. So this one must be preserved.
Speaker Change: The medium and long term industry, we need to develop it and then of course again, if you have to cut Capex again, I remind you I'm able to cut capex, but none of the fundamentals of the growth in the oil and gas, where we will deliver accretive cash flows for policyholders, but I will not let up.
Speaker Change: As to arbitrates, if I need to invest less in EV charging not worry that we'd do it I will give you a list of things on which we can be on CCA. So we are spending some of that will be reviewed.
Speaker Change: That's the way we are making our business plan exercise in June July and I will look at it we are preparing the future 2006.
Speaker Change: And our futures investors meetings by beginning of October we look at it obviously, we have a scenario of what happens if and looking to flexibility and finally to appetite, but I would note arbitrate.
Speaker Change: Fundamental to our future cash flow growth for shareholders. This is clear.
Speaker Change: Already you know we have these projects have been sections. They are being they will be delivered and in fact that priority must be to maintain their budgets and their timing rather than beginning to obviously, but we have enough. You know when you speak about $17 billion budget to find 2 billion is not so complex intercompany.
Speaker Change: We have to do it we will do it.
Speaker Change: As we have done it in the bus and I think we averaged track record over the last 10 years, we've demonstrated that we're able to do it.
Speaker Change: But I want to do it in a smart way and not again at the expense of our future cash flow growth.
Speaker Change: The balance sheet.
Speaker Change: I know my position by position in fact, it's always good to be counter cyclical. So the question is can we create value we create value when we buy at a low price and then the question for US is an arbitration of course buybacks today prices is cheap and it's good to be rubaiyat sure the our chips even cheaper.
Speaker Change: It's by the way, it's a cost in terms of cost. It's a the depth is lower than the cost of capital. So it's a good investment, but then we will have to compare that against what can we do a beauty food acquisition with Egypt, which we'd be exiting for everything but the way to think about it. So we had to use in fact the balance sheet. This is a trade off.
Speaker Change: But we as a board we would absolutely answer. So then we all know that today I'm, sorry, I don't see $50 on Ctrip acquisitions are more we are divesting. Some few fixed semi continue to sell them at $670 per dollar. So we'll see but this is a type of things, which I think we need to think again too.
Speaker Change: To the medium and long term and do we create more value more cash roes for our shareholders, but the fundamental way to speak about the balance sheet and the way to use the flexibility, which we have.
Speaker Change: At this stage is the buyback is okay.
Speaker Change: That's why we maintain.
Speaker Change: It is $2 billion for the quarter.
Dan: Sure Dan Thanks Lee.
Speaker Change: The next question is from <unk> <unk> of RBC.
Speaker Change: Hi, Thank you for taking my question and thanks for the comments and.
Speaker Change: So just a quick clarification on the way.
Speaker Change: You and the board look at the normalized gearing, which is the number that we see is it just the seasonal factors that are in that and the adjustments I think I don't care I talked about $3 billion of roughly of seasonal factors and I can't quite reconcile that with the 11% normalized gearing.
Speaker Change: And then second question is just on the latest situation in ways that would be.
Speaker Change: Obviously, we're a few months out from the election are important project for you just wanted an update there. Thank you.
Speaker Change: Good luck.
Speaker Change: It typically is a calculation, yes, we took a 3.4 billion, we say do better. So 44 billion working capital built it was 1 billion of reversal of exceptional events. We mentioned at the end of the year. So when you make them up with three four and minus 3.4, you'll find delivered percent jump year could give you and the team can provide you the details which is very.
Speaker Change: It's very easy simple straightforward effect.
Speaker Change: What has been done because fundamentally what you observe in again, the we as a.
Jim: Jim can provide us a slide in your kind of lines you can do it yourself because it's public.
Jim: Then bill as a release of working capital for yes. In fact, we know about what he's built at the beginning we'll come back and answer yes, except some exceptionally lower limits, we mentioned to you Julie.
Jim: And if you remember I said, we've had there was end of 20 $415 billion of exceptional one video that's been reversed visited 500 billion.
Jim: Solar, which we should come one would one day. So this one we cannot stop is always something which we lose but again. So we are confident because we have observed the company earns a wheat is able to do.
Jim: Erase vis seasonal effects around the year, because those working day during the quarter.
Jim: But what they think and Nobody's more released by the end of the last quarter, we have a business of first <unk> in the fourth quarter in between seeing some moving elements.
Jim: The Mozambique update Mozambique, I mean, you had we had the good news so older.
Jim: The financing is back on track thanks to our U S. Exim decision. So no other shareholders have decided fundamentally to move forward with the projects we are working on it.
Jim: We are still expecting one one or two answers, but in fact, we could finance legal equity.
Jim: And in fact, it's more a question of paperwork on the ground. So the security of the.
Jim: And just your area, where we are building a projects. So <unk> is completely secured safe. So what we are working with contractors disease to be sure that all contracts that we remain within the perimeter of the secured area. This is a point on which we work with them and.
Jim: If there is a note on the other side as you noticed we have works.
Jim: To answer to some controversies about human rights I don't know if it happens or not these events, we had no pufendorf, but we have I believe.
Jim: With myself I went to visit the president to telling you you need to take your general prosecutor, we want theory, an inquiry, we took the initiative to consult so national recognition of human rights in order for them to make two seats to ensure that these inquiries would be done properly and they will they have committed to make you report. So I think we have to.
Jim: Taken some actions in line on all sides, which is all associates a responsibility I would say and I think we have done it so I would say if I'm a <unk>.
Jim: The target is to be a board somewhere to be launched this project by a middle of the year.
Jim: Thank you.
Irene: The next question is from Irene <unk> of Bernstein.
Speaker Change: Thank you very much good afternoon.
Speaker Change: Going back to your adjusted gearing. It is obviously low at 11%. So there's no issue with the 2 billion quarterly buyback but.
Speaker Change: I was wondering if there is a level we cannot know if $65. Brent is a floor and is there a level for that normalized gaming where.
Speaker Change: The board would feel the need to revisit the 2 billion quarterly buyback.
Speaker Change: And my second question on Namibia and is there an update on the timeline of.
Speaker Change: And mature in that project and progressing towards thank you.
Speaker Change: Okay. I think I think you ran for the two questions I think I've answered somewhere about previously to Duke I think again, we gave you a guidance at the beginning of the year, but the board was ready at 70 Dota two go to 12, 13% I. Just told you. We're 65 will be somewhere around 14, so if I'm seeing that that's way off.
Speaker Change: Since we are consulted board of Vivat somewhere.
Speaker Change: Certain issue lays out the precise figure, but this is a range, where we are comfortable to use our balance sheet and secondly honestly.
Speaker Change: Notably by game, but I think in New York I tell you. It's 50 of you'll see we will revisit it.
Speaker Change: When we look at 55 out as well just to be clear, but we are not there. So let's let's convert it to a VAT once step by step and again I think we have if we further consistency rather than being erratic over that.
Speaker Change: And that may be out there.
Speaker Change: It wasn't in that midyear last week I visited me, therefore onvia forties.
Speaker Change: We are working on this one.
Speaker Change: To be clear, we are a projects, which in which we have given some useful information by the way on in.
Speaker Change: In February.
Speaker Change: I think it's a matter now to find a common ground between us and the authorities. It is a project, which face as you know in fact fundamentally some challenges at physical we have quite a lot of oil and we have something like 760 million by reward. So it's quite a big pool of oil these are low permeability.
Speaker Change: But in fact, when you inject the gas it's a longer plateau. So we need to have a long license to produce $750 million of all we did as well because it saw some challenges as is.
Speaker Change: It's a 3000 meter water depths, which means capex with alliance pipeline for lifestyle more expensive or that makes $20 per borrower that we say so in terms of course takes place with the government, but we have some thresholds in terms of our of our I would say.
Speaker Change: IRR targets and that I need to protect my my.
Speaker Change: My brokers a project in case the price of oil will go down. So we have open the discussion is premature but again, it's a it's like.
Speaker Change: Yeah, very similar situations like the one we had in Surinam one year ago. We are at the end of the day, we find a way to.
Speaker Change: To find a common ground between the government and ourselves in order to be able to move forward as a project.
Speaker Change: Whereas of course, the foods visit I don't expect any answer, but I've noticed but will enable <unk> to open these oil and gas industry, we could be the first mover, which means sometimes also some additional costs because of logistics. So there is a also who will take that into consideration.
Speaker Change: You know we have a very large.
Speaker Change: Pipeline of projects and as I said last year in Suriname, I know, Dan I'm, not driven by the volumes the volume and we are already quite a good growth. So I think <unk> will be of course, a soft company choice, but it will be done if we find again.
Speaker Change: If we are speaking with all return targets for us.
Speaker Change: And if I spend my time to visit you guys. Because I think there is possibility to find the common space, but it has to be we need to be to be to be to have 2% to play a tango.
Speaker Change: Thank you.
Speaker Change: Okay.
Speaker Change: Good morning.
Speaker Change: The next question is from Giacomo Romeo of Jefferies.
Speaker Change: Thank you two questions for me I think your message on.
Speaker Change: Buybacks in the current macro environment is very clear I just wanted to go back to.
Speaker Change: What you showed in your slide.
Speaker Change: Slide <unk>, where you were showing that <unk> below $50 and now you gave us.
Speaker Change: Flex level of capital investments.
Speaker Change: And you would expect those levels to generate free cash flow above the dividend and so is that a meaningful level of buyback in that.
Speaker Change: Macro environment that you think you'd be able to sustain.
Speaker Change: The second question I have for buyback is in Argentina, we have some I guess some of your European peers, taking any position in LNG projects in Argentina.
Speaker Change: There have been some headlines, suggesting you are looking to scale back your presence in the country.
Speaker Change: Yes.
Speaker Change: Just trying to get a bit of your thinking around the investment prospects in the country and whether you think there is some attractiveness around.
Speaker Change: Potential for Argentina to become an LNG export them. Thank you.
Speaker Change: Yeah.
Speaker Change: So.
Speaker Change: Firstly, you refer to slides, which it was a slide number 53. According to my colleagues, which gave me the slides, which you have the answer on the slides because if I remember like I just revisiting the slide we've told you that.
Speaker Change: At $50 per barrel continued disciplined capital investments, which was down by 2 billion compared to the global guidance.
We were able to deliver the dividend of course to grow the dividend and there were some cash flow remaining for buybacks. So I think you have the answer to your question. So <unk> I don't think the buyback are going down to zero.
Speaker Change: So the case of the IV. So you can make your master vendor, but this will give you more information. So for me. The answer was clear we ever in fact, a post dividend breakeven, which is lowered from $50 by the end of it all of these.
Speaker Change: So let's start with the monitor of us.
Speaker Change: And.
Speaker Change: By the way today is a $500 million I suspect we will have done already 4 billion by the end of the year. So has the board is confident.
Speaker Change: <unk> maintained the 2 billion I remind you as well, but very this home guidance, which has been a little farther than maybe we could have repeated it today.
Speaker Change: Which is more than 40% of cash flow from operations.
Speaker Change: Is another guidance on which we thought would be.
Speaker Change: Italy, which we agree full cycles, so more than 40% of cash flow from operation full cycles, each supportive of the distribution to shareholders.
Speaker Change: We are committed to that and this is nuts and so I know that you tend to forget it because we were up to 50%, but we didn't change the guidance of more than 40% full cycle and in fact, we've chatted through cycles, because it's exactly what we want to cover in case the prices goes with oil prices going down.
Speaker Change: So keep that in mind and you can make the.
Speaker Change: Mark with Argentina, Yes, we have been active we have a lot of projects in the world in LNG.
Speaker Change: Sure.
Speaker Change: No I think it's a question of allocation of capital in LNG, and we consider we have better projects.
Speaker Change: And the approach that we have enough.
Speaker Change: <unk> and <unk>.
Speaker Change: <unk> U S and Mozambique in parallel we have enough and we didnt fill.
Speaker Change: We've I would say.
Speaker Change: I know about today are president and really making a lot of before but in the last 25 years.
Speaker Change: <unk>. This is I think we managed to get some dividends to two years out of 25.
Speaker Change: To invest in infrastructure in a country, which has quite an unstable I would say exchange foreign exchange policy is not purely from my priority and again by the way we have other ways to monetize all our gas NGL and gas on which we work we recently signed some interesting contract.
Speaker Change: <unk> gas two two Brazil, who are worthy ASO, which is more project. So I respect the decision of others will be clear, but on all sides.
Speaker Change: Good.
Speaker Change: I visited Argentina last September and they express and expense was a credit event, so far stretch it out but.
Speaker Change: Although this can be a favorite photos that analysis was not a priority. So again, it's a question of portfolio of us.
Speaker Change: Thanks.
Speaker Change: The next question from Matt Lofting of Jpmorgan.
Thanks for taking the questions two if I could please first I just wanted to follow up on the earlier comments on buybacks payout ratios and gearing if I understood correctly, Patrick with what you said earlier.
Speaker Change: The board and it sounds like views April conditions as well as Q1 is within the bounds of reasonable in 50% to 55 for a sustained period is perhaps where you review.
Speaker Change: As you were referencing earlier that the mid cycle payout was greater than 40% when the board thinks about 2026 and beyond.
How mechanically and swiftly should investors expect total energies to revert to 40% plus as an underlying payout and then secondly, I just wanted to ask you about working capital.
Speaker Change: The quarter on quarter fluctuations appear to have been quite substantially over the last 612 months versus history, perhaps I wondered if.
Speaker Change: If you could touch on some of the reasons behind that and the extent to which you expect that to continue perhaps related to <unk>.
Speaker Change: Evolutions in the portfolio setup. Thank you.
Speaker Change: No.
Speaker Change: Matthew I'm, sorry I'm.
Speaker Change: I am sorry to correct you.
Speaker Change: <unk> never said that it was I just two examples of 50 to 65 I never said there is a limit somewhere is true, but this year this quarter, but we are still at 65% of LTE. We are comfortable to move forward, which is not a surprise its what the comments I gave you in new European last September.
Speaker Change: And again, the 40% is that the mid cycle, where it's something which is a sort of floor or throw we said through full cycles whatever will deliver.
Speaker Change: More than 40% so to remind you that gave you the guidance, which means that it was again, it's a fundamental one.
Speaker Change: I think it's it.
Speaker Change: Is that the bid either but we will take 40% is what.
Speaker Change: But we want to deliver at least 40%.
Speaker Change: Last year, we delivered 50% before as well so it's at least 40% so and in fact, the reality is when considering the dividend up to <unk>, which represents 8 billion.
Speaker Change: I can tell you real quickly about 50% because of dividend never because we continue to maintain be maintained so even in a low price environment. If we generate the cash flow of 120 billion dollar. When you have 8 billion of dividends you are already at 40% So and so I mean, just so don't try to guess more one more.
Speaker Change: We said I think we.
Speaker Change: And again, we are monitoring that as I said as well in the best interest of the shareholders as well obviously when the share price is low is good too. So it takes you use the balance sheet to buy some cheap shares but its a case of buyback is a good one.
Speaker Change: So.
Speaker Change: When you asked me a question of mechanically innovate new mechanics that mechanically it's we appraise the situation the macro environment geopolitics. It's not the board is not just looking to one figure there is no magic formula.
Speaker Change: It's more a question of global rendering and again, yes, it's true that we have uncertainty today, but as I said, it's quite fluid and could be reversed.
Speaker Change: I think maybe it's still a summer time, we could have some <unk>, we never know so and we are well positioned to weather the storm. So let's continue.
Speaker Change: Working capital I think you have two expansion very easily you have some structural bob's bulk of it in fiscal <unk>.
Speaker Change: Physical reversal, we have some deaths, which grew floating capital fiscal putting capital which come back every year.
Speaker Change: First quarter, Norway, all Gulf countries. The other part which is also seasonal as a marketing.
Speaker Change: And then it gets into a marketing people or just before.
Speaker Change: They're almost much more in winter times and you know in fact, they pay their bill on three important assortments along the year. So you have a deferment of revenues between the fact that we have some big consumptions, releasing here and equally sort of less than <unk> billion.
Speaker Change: This phenomenon is the vessels.
Speaker Change: Hey, this is all but we know that at the end of the year. So people will have favorable. So this is the type of things. That's why we have several here where between the fifth quarter. In this example, and I think we have one or two which we get it we could quantify from seasonal norm and that's the point on which show.
Speaker Change: We are <unk> 44, which will continue yes.
Speaker Change: We have observed this for several years again, we have wanted to reinvest internally.
This time, because our sure when I saw that jumped from 8% to 14, but you will have some questions.
Speaker Change: To share, but we view there to be able to give you some better so we ourselves the way, we think internally with our board, which we put on the table I proposed to be associated with you.
Patrick: Thanks, Patrick.
Speaker Change: The next question is from Patrick pool of UBS.
Patrick Pool: Yes, Hello, everyone. Thank you debate.
Speaker Change: Questions from me please the first one.
Speaker Change: The integrated power business, you mentioned that rotates with floor this quarter because it doesn't knock off a farm down so I'm just wondering whether that's something that's very much temporary.
Speaker Change: Or if you see actually some more challenges in them.
Speaker Change: By bringing on these farm downs given increased.
Speaker Change: Hudson T around renewables in particular in the U S. And then secondly on the integrated <unk>.
Speaker Change: <unk> business and the guidance on CFO you targeted earlier this year.
Speaker Change: $6 billion of cash flows looking at <unk> Q1 performance.
Speaker Change: It would be more stable cash flow at $5 billion.
Speaker Change: Do you still see.
Speaker Change: That's 6 billion target is achievable in 2025 and in the constant <unk>. Thank you.
Speaker Change: As the first one.
Speaker Change: It's good it's a question of timing.
Speaker Change: So from now you will see our observation on radio in Q2 weeks that we should have almost two quarters really in one fact, so in fact bounce revenues represent more than $70 million.
Speaker Change: On an annual business.
Speaker Change: Certain amount of around 312.
Speaker Change: 184 cameras of Opex, which has to be if they can reach our plan.
Speaker Change: <unk> 75 per quarter 70, 75 in fact, each time there was no pharma, but when you I know already that we just closed one in Portugal, which will generate what should have been done first of all just so it's really a question Krishna timing, we don't see as much difficulty we continue to do it we'll continue to do the farm Downs included.
Speaker Change: Any request by the way.
Speaker Change: So we have a program to execute we have put in place a dedicated specialized team working with many players.
Speaker Change: She is our adviser.
Speaker Change: So we asked to deliver as part of the business model and so at this point I can tell you. We I don't see why the team would not deliver its no hint of course, it's not linear quarter, we have quarterly results.
Speaker Change: And that's what it does to scrub. So on the second quarter, you would have a result of foreign bonds, which will be which will be I.
Speaker Change: I would say.
Speaker Change: Higher bandwidth Intrawest plan okay.
Speaker Change: No no no no challenge on this one of which is the main challenges sector.
Speaker Change: <unk> face a higher but again you have still quite difficult I.
Speaker Change: I would say appetite from these type of assets $4 million platforms et cetera.
Speaker Change: I LNG.
Speaker Change: The guidance yet when I look through the slides in February if you look carefully at what's target six but it was a shadow thoughts so it's between five five and six.
Speaker Change: It's true we all are.
Speaker Change: On this one today I would say if you want to drive out before we are more than 5556, but no. My teams have honestly on this one I want to make a comment on it in fact, and I think like others.
Speaker Change: Events in.
Speaker Change: Q1 25.
Speaker Change: Fundamentals of the markets. We are bullish so we're long run gas.
Speaker Change: Unfortunately, others players by the way that Novo competitors, the geopolitics became suddenly.
Speaker Change: Because of the comments on Russia, and Ukraine story, which was not anticipated.
Speaker Change: So in fact, you had the British position based on footage fundamentals, which we all right because we've seen sort of the inventory is declining.
Speaker Change: So it was the right position and we are bullish position, where so there need by an upward market reversal.
Speaker Change: Taken back by mid quarter to be an issue, particularly that so thats why its difficult and thats the way.
Speaker Change: <unk> of our traders is quite a complex with it to be honest in this type of development or are there on that because it depends on some we don't know.
Speaker Change: What will happen tomorrow morning, so.
Speaker Change: The position was perfectly right and so we're supportive of it certainly you have some so we experienced some few losses in February which will reverse but globally speaking.
Speaker Change: LNG trading was goods, where strong, whereas most of the gas trading which was it so.
Speaker Change: I'm fine.
Speaker Change: We took a decision recently by the way we have a new leader for all of these gas trading <unk> wants to make some.
Speaker Change: So I'm a supportive and so between five five and six just to clarify this guidance and on maintaining today.
Speaker Change: Got it thank you.
Speaker Change: The next question is from Martijn rats of Morgan Stanley.
Martijn Rats: Hi, Hello.
Speaker Change: Also I got two questions, if I may which actually sort of just follow up on the question from Henry.
Speaker Change: I wanted to ask you about the about your thoughts on the.
Speaker Change: The true appetite that Europe might have four more Russian pipeline gas. So many sort of contradictory comments indicators, it's a real market concern, but clearly.
Speaker Change: They're well connected to all the people are.
Speaker Change: I was wondering what your impression is so how likely this release say on the timeframe offset a 12 months or so I mean like.
Speaker Change: Multiyear view it probably all sorts of things are possible, but but I'll ask sort of a 12 month view how likely it is really and then.
Speaker Change: Secondly.
Speaker Change: Perhaps a bit of a technicality, but I don't.
Wanted to ask you about the guidance for LNG price realizations for the second quarter.
Speaker Change: Down to 90, 999, and a half total front of me to you I would imagine that doesn't fully capture.
Speaker Change: The impact.
Speaker Change: Okay.
Speaker Change: Recent set of spot price declines given the lag that is sort of built into the system.
If you had to think about that.
Speaker Change: Of course.
Speaker Change: Up would that sort of incrementally whole assuming say.
Speaker Change: Oil prices stayed at <unk> stays at current levels would we see a drop below nine to $8 eight is that sort of a trajectory that we should be thinking about that's interesting your comments on that.
Speaker Change: Okay first one I think.
Speaker Change: You know my view on that is to be cautious because I'm not sure but.
Speaker Change: I'm, just observing whats that bids on the geopolitical scene. It does not say that it is easier to land between the different parties. So I'm cautious about it and I think the market has overreacted to some of the news.
Speaker Change: And very complex situation, what they will serve as well as bet on one side you have quite a lot of pressure within the trade negotiations between the U S and Europe to buy more U S gas.
Speaker Change: And that's in fact, the U S LNG EWC and abuse case too.
Speaker Change: To fill the gap and I think honestly the European authority seems to be quite incline to please the U S. From this perspective, which is good news for pattern energy is by the way as you know we're quite involved but presents a USB two <unk> of LNG. If it's in the U S and Europe, So I see that as a as a good support for all our business.
Speaker Change: And I think on the other side politically.
Speaker Change: The Europeans do not.
Speaker Change: So we're happy with what happens on the other side you have <unk>.
Speaker Change: But when.
Speaker Change: When I look through the program of the New coalition in Germany, I don't see a lot of support for a lot of pushing five gas invest in that platform on the country and so and I know that all of the.
Speaker Change: The Brussels they are working on the sort of platform to which is off to exit from Russia for solid fuels because of security of supply in fact today is in fact.
Speaker Change: Interesting to observe that.
Speaker Change: European I would say narrative on energy East.
Speaker Change: Going from Green to security of supply there was a conference in London.
Speaker Change: We have all the leaders speaking about security of supply where renewables could contribute but from this perspective I don't see much.
Speaker Change: Phase II politically to take a lot of fresh and gas. So I think it's more U S LNG, which would go against that notion gas in Europe.
Speaker Change: My comments and over the next 12 volts ICANN, even confirm that that would be very surprised to see stability.
Speaker Change: A portion of guests coming through your book in the next 12 months. It will take time before it's also a matter of trust between customers and producers in fact, some of them are 32 inhibitor to us.
Speaker Change: Yeah.
Speaker Change: I'll just get probably that's okay look if we gave you a figure for $99 five when we gave our guidance we are making the math we have some cautiousness.
Speaker Change: So <unk> 50, because of the spot price because of the I would say on the long term contracts related to brand <unk> two top two months time lag. So it's quite easy to anticipate what will happen on these contract was in next quarter.
Speaker Change: As part of course.
Speaker Change: Sure So which is why we gave you nine to nine five differently.
Speaker Change: The reach one I'll, just booked which was I think around.
Speaker Change: Something like who is between 9% and 12 I would say that we took we tested between nine and 12 European guys. Today, we obviously intended to deliver so you should be in the middle of the range I don't know what will happen.
Speaker Change: The third quarter.
Speaker Change: Again, I am not to Magicjack, but it's quite clear Betsy.
Speaker Change: The hope of your price range, the second quarter, which is today without a poor will impact.
Speaker Change: That's quite clear again, if you want to me I don't have the math in front of me and it varies.
Speaker Change: It's uncertain.
Speaker Change: We propose a range if we're required fees on the board, but again little less.
Speaker Change: It's really difficult today again these markets are super fluid, maybe tomorrow is the tariff will disappear into the navy oil prices jumped so let's see.
Speaker Change: Let's all hope for that wonderful. Thank you.
Speaker Change: The next question is from Lucas Herrmann of Exxon BNP Paribas.
Speaker Change: Yes.
Speaker Change: Yes, thanks, very much a couple of quick questions if I might.
Speaker Change: The first just going back to that but also your balance sheets and what's been going on with currencies in fact might be Patrick I should ask you more broadly on currency impact, but the question specifically was that you hold a proportion of it is euro denominated.
Speaker Change: And the question simply is the impact that a strengthening euro rates has had on dollar reported that last quarter and I guess, if currencies remain strong we should probably expect absolute debt to see a modest uptick as well as a consequence of currency moves, but maybe talk more.
Speaker Change: Totally on given the given the volatility we've seen in the dollar you know the way that plays to your business in.
Speaker Change: And secondly, just a quick question on cash flow and associates.
Speaker Change: J P where should we expect you know the necessary contribution to end up for the year as a whole.
Speaker Change: Okay.
Speaker Change: $400 million appropriate booked in the first quarter, which is not covered by dividend, but how do you see things for the year as a whole what should we be modeling that's it. Thank you very much.
Speaker Change: So look as we did with the SEC.
Speaker Change: One question I Didnt catch it up I mean, as a 400 million were related to what.
Speaker Change: Just looking at the associate move you know the difference between dividends received on our side yes.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Can you get back to the yeah, Yeah equities. Okay. Good. Thank you for the two questions Lucas and their support.
Speaker Change: The first one so depth I will let.
Speaker Change: I will let a jump here.
Speaker Change: Sorry.
Speaker Change: But what I can tell you on the FX in fact, the dollar euro.
Speaker Change: Foreign exchange rates does not affect our global results the only positive impact it has today.
Speaker Change: Dividends as expressed in Europe and Windsor.
Speaker Change: When the dollar is at 115 and one for in fact, we lowers the burden of the dividend <unk> to 5%, which could make something like 400, let me up so it's not neutral.
Speaker Change: The address between the different lines in fact, when the Luxe global cash flows in the reserves, so Brazil minus or in fact equal when we make as a test around the portfolio. We have no global impact the outcome on solid business is of course, but globally, it's not an issue.
Speaker Change: In fact, when the prices are low.
Speaker Change: This week is better for us.
Speaker Change: On the dividend.
Speaker Change: Of course, but it is by the way, but offshore orders in the U S would not see a 7% both venmo, 10% of more increase of the dividend.
Speaker Change: But I will let our adult on the equity affiliates honestly is just because we have some equity Fps, which are run on a not on a quarterly basis, but on a yearly basis. So some of them are delivering their dividend by the end of the year some of them like Nigeria LNG for example, they make.
Speaker Change: Second quarter third quarter are a big full force up but no first quarter. So we don't have an Iga IAG.
Speaker Change: <unk> certainly seen a controller and I always say, it's more of this JV equity <unk>.
Speaker Change: By Board and so you have different I would say.
Speaker Change: Timing of leasing dividends of course of interest I can tell you all board members are pushing to maximize that so.
Speaker Change: <unk> 400 million.
Speaker Change: That will come back unless of course, they are affected by the price environment and Virtu everywhere reserves.
Speaker Change: Timing, so maybe it will not be 400 with <unk>, but it's not the.
Speaker Change: I have no doubt that this <unk> will deliver dividends because in Italy.
Speaker Change: Or one with a single concept of maximizing the dividend release were expecting of course, the depth of ratios, which maybe you have some depths.
Speaker Change: That's the way it works.
Speaker Change: I guess it was the time to think about the Olympics question now to confirm you made that you can do it all.
Speaker Change: Because you say issue booths on the euro markets, neither that maybe this isn't what I swept.
Speaker Change: In to the so my exposure.
Speaker Change: Effects on late it is very very limited because of it.
Speaker Change: So in fact, I should have known to the armed services bits are expressed by the CFO.
Speaker Change: And of course EBITDA.
Speaker Change: Okay.
Speaker Change: Thank you Lucas.
Speaker Change: The next question is from Cheng of Scotia Bank.
Cheng: Alright, Thank you good morning.
Speaker Change: Okay.
Speaker Change: Perfect.
Speaker Change: For like the agreement with you Kevin cyclists to export to get there can you give us some idea as to whats the timeline.
Speaker Change: What's the next step and that the size of the contract.
Speaker Change: Okay that was it a big steps done by the operator, so cloud <unk> is better positioned than me to answer to you because the operator.
Speaker Change: And I Trust and we support them there wasn't a good.
Speaker Change: Signature in January and the cable, which was quite an achievement because we managed revenue scheme now to be able to bring to gas from cypress, who some existing facilities.
Speaker Change: One of the LNG plant and in fact as a main discussion for US the important point was to be sure that we could explore the guests and so I can't tell you if any does one provision well some parts of the guests could be delivered better than netback to the Egyptian market again, we protected and it will be in fact LNG.
Speaker Change: Go into an existing plant in Egypt in <unk>, so for us and for Eni in Emmis. Thanks, Eni works and also the Egyptian authorities in particular, I mean, you said by the way forward in <unk>.
Speaker Change: Just because I think it's the optimal position to monetize these cypress gas and so we are very supportive of the projects and so the next step will be for you and I think to go to to the <unk> 26, which is a target. So there is some technical risks, which is being done and of course, some paperwork development grant.
Speaker Change: For us.
Speaker Change: In fact as total energies we were putting.
Speaker Change: This agreement is a precondition to spend any capex, even on the engineering side when he doesn't want the teams and the operator to spend some money as long as we have not secured your political agreement between the two countries, which was supportive of an acceptable scheme.
Speaker Change: Juniors, we'd love to spend money to make nice designs, but at the end. If you don't have <unk>. So I think he has done even so as it's quite a complex situation. So it's quite a good progress we have 50% of the projects Eni <unk>, it's over 50% and this progress completed but we'll evaluate it was not to be clear.
Speaker Change: It's another project, which you'll recall was lot Feedings award by 2040, so maybe by the way the delivery I know Eni's is very good to type two market. So we will see a wrong it will take but.
Speaker Change: It's some things, which we could see is we'll see it will feed the growth because this key message. We are using existing facilities is mainly a subsea pipeline. We don't build a lot of processing facilities I know processing facility. So we should be able to deliver the gas by 2008, 2019, we will feed or growth.
Speaker Change: Production in the future.
Speaker Change: Okay.
Speaker Change: Good question Curt.
Speaker Change: The U S to have a new roof top of America, the downhole come to Lincoln.
Speaker Change: That allowed the multi zone testing.
Speaker Change: Pat.
Speaker Change: It's that much of an opportunity for.
Speaker Change: Total energy there.
Speaker Change: <unk> I don't think we are producing on the although I've only for encore superiority in <unk>, we have some at Jack and anchored by the Virginia, Jack as well I think.
Jack and ankle.
Speaker Change: And so what can we do as you know the reservoir, but you know again the.
Speaker Change: Yes.
Speaker Change: Obviously this is good or bad.
Speaker Change: By the way one of your objectives, we are I said back in <unk>.
Speaker Change: Yes.
Speaker Change: We are discussing with some operators.
Speaker Change: Take again the exploration in the Gulf.
Speaker Change: In the U S Gulf.
Speaker Change: As a priority I think it's a good thing.
Speaker Change: So no we don't want to operate all set so we are discussing with some other companies.
Sure.
Speaker Change: One of the idea of in terms of the future, we knew where our reserves to take again, because they are happy with what we've done with the anchor with Vattimo by remote came on stream.
Speaker Change: Last week I think all are very recently and the.
Speaker Change: Well again as a <unk> operator in the Gulf of Mexico, So doing more in the Gulf of Mexico and exploring again.
Speaker Change: For me one of the I would say of the new action plan for exploration teams.
Speaker Change: But we will.
Speaker Change: This collection of reserved to lower the core so it's available.
Speaker Change: Thank you.
Speaker Change: The next question is from Christopher <unk> of Bank of America.
Speaker Change: Yes. Thank you very much just a quick one to follow up on cash conversion in <unk> relative to your full year guidance. So what I picked up was <unk>.
Speaker Change: LNG and gas trading.
Speaker Change: The farm downs that I'm missing and associate dividends, let us know if you can point to other improvements for cash conversion later in the year and the remaining question I had was Patrick.
Speaker Change: Regarding your appetite for more renewable growths.
Speaker Change: It was quite.
Speaker Change: Important too.
Speaker Change: At the end of March.
Speaker Change: <unk> or tighter even tougher.
Speaker Change: Our targets.
Speaker Change: You are now competing against utilities that are being told to do buybacks and stopped growing soft.
Speaker Change: Wonder whether you can comment on the competitive environment.
Speaker Change: In this new world.
Speaker Change: Leaving the tariffs.
Speaker Change: 17.
Speaker Change: So one moment.
Speaker Change: The debate and just looking at your competitors in the low carbon space. Thank you.
Speaker Change: Okay.
Speaker Change: Second video as compared to 29, seven <unk> 28.
Speaker Change: The price environment for NPS on wells and it was more than.
Speaker Change: With regards to <unk> for the full year.
Speaker Change: In line with our guidance I told you was that it was.
Speaker Change: There's 1 billion Ms.
Speaker Change: Lisa from gas trading and explain you why I mentioned you have about 500 million five $5 6 billion.
Speaker Change: Integrated.
Speaker Change: I'm, a very fine with the guidance, we used more than 2 billion to finance for you and we will be where we are in line in the face of Wolf coming so I'm fine and the refining and chemicals is more challenging to be honest.
Speaker Change: Service.
Speaker Change: Having said that the good news when I wake up this morning, Thats intra European margin is up to $50 per tonne. So maybe again, we could have some good news <unk> going down integration will work and I think this is a business I did not mentioned that during my speech as a strength of the company.
Speaker Change: It was difficult to argue with you our results which are not so so strong but in fact, so we could have a sort of effects, where you would have less on one side more on the other side picks it up at all and I Hope my refineries are running for and they captured 50% of these days so.
Speaker Change: I would say it again.
Speaker Change: Is that the $1 billion, which would make any difference on the global framework that we gave you in.
Speaker Change: In January but to capture the world.
Speaker Change: Sorry.
Speaker Change: Chris.
Speaker Change: Now look on the on the growth renewables, we are on the way it's not only the New awards. It's integrated power I mentioned two in enjoying a nonsense of it we're looking a lot also on the revenue.
Speaker Change: We're flexible asset because its integration, which makes money in fact, and we need both at the enemy sell to customer by 2047 power. So yes, I observed that others are more under pressure maybe Beverly.
Speaker Change: Easier to capture of some some licenses.
Speaker Change: Yes, we are.
Speaker Change: That's possible.
Speaker Change: But again our model we are quite clear on what we deliver we are targeting some countries we build on it so.
Speaker Change: I mean, it's something that the whole world for me, it's a matter of demand.
Speaker Change: The news of <unk> 24 in Europe as a result of what happened in 2004 <unk> electric.
Speaker Change: Electricity has grown by 4% in 2000 and for the global demand the demand.
Speaker Change: Describe the demand is growing by 4% and origin strategy as a company is fundamentally driven by moving part of the company remaining of course home one morning gas because this is the energy of today ABC, where we can deliver activity grow opex, but moving part of the company too.
Speaker Change: Two a market shift.
Speaker Change: Clearly some good perspective for demand or these tech companies. The data centers AI is rerun is driving this increase of electricity demand and by the way is good because this.
Speaker Change: Again as I mentioned in my answer before.
Speaker Change: Electricity is not linked to oil so it's another way as well in a company to have accepted the resilience and at the same upside, but it's like the marketing against that you have a resilient business. So.
Speaker Change: For us the fact that over its competitor maybe you have more pressure of less competition, but meets access to asset value.
Speaker Change: Better this year, but we are it's a matter of net zero world. It's a matter for me again.
Speaker Change: <unk> totally nascent business for us in the future of delivering growth and resilient we are in a profitable way, but that's what we're about.
Speaker Change: But those are the drivers of your strategy.
Speaker Change: Great. Thank you.
Speaker Change: The next question is from Jason Gere Bowman of TD colon.
Speaker Change: Hi, Thanks for taking my question.
Speaker Change: The first one is on the integrated LNG business and.
Speaker Change: Hi.
Speaker Change: It's difficult to see.
Speaker Change: Benefit from those apparel OMD acquisition quarter over quarter, I know you've said in the past that that production is linked to global gas prices you can give on where they are I would have expected to see.
Speaker Change: A step up in earnings from that new production. So can you just talk about kind of what that contributor within earnings if it's masked by perhaps slower trading quarter over quarter, and then somewhat related to that.
Speaker Change: One of your large peers noted this morning that the trading environment is a bit more difficult given the new macro risks that the market is dealing with and Im wondering if youre seeing that in your own in the oil and gas trading books and for the duration that the.
Speaker Change: The tariff risk.
Speaker Change: Kind of remains.
Speaker Change: <unk> does just trading become a bit more difficult.
Speaker Change: <unk>.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay, let's see.
Speaker Change: It's.
Speaker Change: <unk> acquisition is delivering some reserves obviously.
Speaker Change: Just since I don't have that in mind today, I mean, I don't have the details we don't give the details quarter asset by asset.
Speaker Change: It's easy to find if you want to look to woodmac, one year ago and towards isolated and you will find some figures.
Speaker Change: But Steve can come back to you on this one but I'm not able to and I think I will tell you cannot we cannot as well so we are not.
Speaker Change: We looked as a group or one.
Speaker Change: But as conservative and in fact.
Speaker Change: You will see I mean, we are working today to.
Speaker Change: To get to capitalize on the disposition, Malaysia to move to more assets.
Speaker Change: It's not only one assets largest story, which we are trying to build and we are willing to build to get to there to give a speech on us which is a strong strategic partner to the company and we work.
Speaker Change: So.
Speaker Change: I mean, that's.
The points.
Speaker Change: Sure.
Speaker Change: On trading.
Speaker Change: I understand the comments I mentioned is I think the macro environment makes it more complex or traders told us is very safe for best for them too.
Speaker Change: The fundamentals of tomorrow, which facing could be its certainly by some commensurate or could have an impact reversing box, where it's a difficult market to trade.
Speaker Change: There is some volatility but difficult to anticipate.
Speaker Change: So it's true but for traders is not the best ways. It doesn't.
Speaker Change: Just in general in Ms and I can only.
Speaker Change: I would say.
Speaker Change: I'm trusting them they know their business, but I know what they can take the level of risk we can take it up to them.
Speaker Change: We are not guiding them on this one which was then to do it honestly the oil trading is done well.
Speaker Change: This quarter I'll remind you that total energy sweating is more trading around assets.
Speaker Change: On the market. So we are a bedroom rising all assets, we have a lot of physicians with storage is inventory. So this is a way which ways.
Speaker Change: <unk> some assets et cetera, So I think it's against.
Speaker Change: Again, the oil trading is a very well during the quarter. So I can't say as regards for anything has done well.
Speaker Change: She thought was very positive.
Speaker Change: One only because of this reverse trend, but we are on the right position again, the bullish on its long positions.
Speaker Change: Reverses at various projects because of the current.
Speaker Change: Political comments on Russian gas, whereas I think the market is.
Speaker Change: <unk> reacted with something which would be takes time as I mentioned, so yes, it's true.
Having said that again I think.
Speaker Change: Four quarters, we chose it seems will deliver.
Speaker Change: The strong results.
Speaker Change: Al.
Speaker Change: And so I'm not I mean, if I'm look coming back to the guidance. We gave you at the beginning of the year, where thats been.
Speaker Change: Bacon coming from more different trading because it's tough on the or guidance, we have power trading which has done well as well, which is part of integrated oil.
Speaker Change: We are in line with.
Speaker Change: The contribution of trading to global guidance for the year.
Speaker Change: Great. Thanks for those answers.
Alejandro Vigil: The next question is from Alejandro Vigil.
Speaker Change: Yeah.
Speaker Change: Yes, Sir Hello, particularly against Council, taking my questions related both questions about the downstream business.
Speaker Change: Have flagged.
Speaker Change: The improvement in refining margins in the short term, but I'm more interested in your thoughts about the medium term outlook for this division.
Speaker Change: And the second question is about marketing we have seen some weakness in the in the first quarter variety guests seasonality. If you can comment on that thank you.
All of this it is quite as if people are less driving it's winter and summer.
Speaker Change: Europe is doing very well. So in fact, there is no very little surprise in practice, because we may be you don't take attention, but the results of this first quarter is in line with the first quarter of 2024.
Speaker Change: We have lots of Q, but it is like 260, <unk>, where the $40 million.
Speaker Change: No. It's just season and then there is marketing deserves our Iot wins, a year, but that just so for us. It was I see some comment this morning, but first was not a surprise.
Speaker Change: So I am not.
Speaker Change: I think as a marketing and services is on the country, a very resilient division.
Speaker Change: Annuity when we announced that we will deliver on the year to $2 4 billion, we delivered the first half.
Speaker Change: So it's quite a.
Speaker Change: It's less volatile, but I know those sorts of its more a question of just let's.
Speaker Change: Lets drivers don't like to drive as much but just consumption.
Speaker Change: On the first one Bcf as is Australia.
Speaker Change: It's true that I come back on it because it wasn't important announcements by the company, which was not commensurate with the note, which was we have announced would be closed shut down one cracker in number.
Speaker Change: Which is quite important decision you know when you decide to shut down the cracker and so big units with a lot of people involved it's true with our European refining and European petrochemical are under pressure and you're done.
Speaker Change: From different.
Speaker Change: The consumption is going down.
Speaker Change: The pressure from petrochemicals.
Speaker Change: He is quite strong including on the U S. Unless there are some tariff.
Speaker Change: But also from Asia. So I think for US it's true that we have to medium term outlook is more to question two to monitor we'd say this decline of the market of this pressure on the on the.
Speaker Change: On the margins.
Speaker Change: And it's true of our Columbus perspective.
Speaker Change: Contributing to our structuring of petrochemical by taking the decision, but these crockery number would be off the market by 2007. So it took three years to execute it that will do it.
Speaker Change: And we are looking to that in fact for two.
Speaker Change: The assets we noise.
Speaker Change: So this is this is a point but.
Speaker Change: But we have to do it properly, including all social responsibility and Thats important to me.
Speaker Change: Thank you.
Speaker Change: The last question is from a retailer out there in there.
Okay.
Speaker Change: Thanks for thanks for squeezing me in my question comes back to Russia actually.
Speaker Change: In the event that we do see some sort of peace deal with Ukraine.
Speaker Change: How do you see your sort of interests.
Speaker Change: In the country.
Speaker Change: And how you might sort of approach that thank you.
Speaker Change: It will all depend on the condition of the pitch.
Speaker Change: Rich I don't know today.
Speaker Change: I think that we have a very strong assets, we can get them out of energy.
Speaker Change: Consider it as a prime assets.
Speaker Change: And which we continue to work on the account, which is the anchor of the position. This one is a long term asset.
Speaker Change: So is the rest I think is just difficult to make some forecast from geopolitics or in this work.
Speaker Change: That's service I cannot comment more than that I think I told you where we are.
Speaker Change: Okay. Thanks.
Speaker Change: And this was the last question from Mr. <unk> I'll turn the call back to you.
Speaker Change: So thank you for your attention intention in the tour our view I think the company again has very strong fundamentals of which.
Speaker Change: Which gives me a lot of comfort again to reverse a store and not to overreact.
Speaker Change: I think <unk>.
Speaker Change: As a result of the first quarter, we demonstrated some of the strengths in particular again E&P division as the world billions of growth strong cash flows which is the so called the company integrated four is in line and the others, we face a more difficult I would say downstream environment, but the teams are mobilized.
Speaker Change: To run the assets and to capture better margins when what we call. So thank you for your attention and see.
Speaker Change: See you soon all of you.
Speaker Change: Yeah.
Speaker Change: Ladies and gentlemen, this concludes the conference call. Thank you for your participation you may now disconnect.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].