Total S.A (Total) has reported sales of EUR31.4 billion for the second quarter of 2009, compared with the sales of EUR48.2 billion in the year-ago quarter. It also reported a net income of EUR2.2 billion for the second quarter of 2009, compared with the net income of EUR4.7 billion in the year-ago quarter.

Adjusted net income was EUR1,721 million, a decrease of 54% compared to the second quarter 2008 and 19% compared to first quarter 2009.

The board approved the 2009 interim dividend of EUR1.14/share for payment in November 2009.

Commenting on the results, Chief Executive Officer Christophe de Margerie said:

“In the second quarter, the price of Brent rose by 33% compared to the first quarter, lifted by the anticipation of an economic recovery and by OPEC maintaining its production discipline. However, weak demand caused natural gas prices and refining margins to fall sharply. The environment for chemicals stabilized after recent quarters that were affected by low demand. The dollar averaged 1.36 US dollar/euros in the quarter.

Total’s adjusted net income of $2.35 billion and gearing close to 25% confirms that we are able to resist in a weaker environment. Since the start of the year, Total has issued close to EUR5 billion of debt with competitive terms to maintain its financial flexibility.

While maintaining a sustained level of investment to prepare for the future, Total is fully engaged in ongoing cost reduction and optimization programs needed to lower the breakeven points and launch new development projects. For example, after succeeding in significantly reducing costs, the group made its final investment decision on the Jubail refinery project with Saudi Aramco and awarded construction contracts.

Since the beginning of the year, the Akpo, Tahiti and Tyrihans fields have started up as planned. Despite these successes, the group’s hydrocarbon production declined relative to the first quarter of this year because of high maintenance, impact of higher prices on entitlement production and weak gas demand with only a partial offset from the contribution from new fields.

Over the remaining months of the year, we expect to benefit from the ramp-up of these new fields and the start-up of Yemen LNG, Qatargas II train B and Tombua Landana in Angola. Exploration success during the quarter, acquisition of new permits and the partnerships with Cobalt in the Gulf of Mexico and Novatek in Russia all combine to strengthen the potential of the group.

The recent industrial accidents regrettably confirm that the group must maintain its efforts for vigilance and improvement of safety at the highest levels. In the framework of its policy for investment, training and management, Total will continue to give priority to the safety of its personnel and the protection of the environment.”

Second quarter 2009 results

Operating income

In the second quarter 2009, the Brent price averaged $59.1 per barrel, a decrease of 51% compared to the second quarter 2008 and an increase of 33% compared to the first quarter 2009. The TRCV European refining margin indicator fell to $12.4/t on average in the second quarter 2009, a decrease of 69% compared to the second quarter 2008 and 64% compared to the first quarter 2009.

The euro-dollar exchange rate averaged 1.36 US dollar/euros in the second quarter 2009 compared to 1.56 US dollar/euros in the second quarter 2008 and 1.30 US dollar/euros in the first quarter 2009.

In this environment, the adjusted operating income from the business segments was EUR3,044 million, a decrease of 61% compared to the second quarter 20088. Expressed in dollars, the decrease was 66%.

The effective tax rate 9 for the business segments was 56% in the second quarter 2009 compared to 58% in the second quarter 2008.

Adjusted net operating income from the business segments was EUR1,678 million compared to EUR3,756 million in the second quarter 2008, a decrease of 55%. The smaller decrease, relative to the one in adjusted operating income, is essentially due to a more limited decrease in the contribution from equity affiliates.

Expressed in dollars, adjusted net operating income from the business segments was $2.3 billion, a decrease of 61% compared to the second quarter 2008.

Net income

Adjusted net income was EUR1,721 million compared to EUR3,723 million in the second quarter 2008, a decrease of 54%. Expressed in dollars, adjusted net income decreased by 60%. It excludes the after-tax inventory effect, special items, and the group’s equity share of adjustments and selected items related to Sanofi-Aventis.

The after-tax inventory effect had a positive impact on net income of EUR788 million in the second quarter 2009 and EUR1,154 million in the second quarter 2008.

Special items had a negative impact on net income of EUR221 million in the second quarter 2009 and were comprised mainly of provisions in the Downstream and Chemicals segments, including the modernization plans for refining and petrochemicals in France announced in March 2009. In the second quarter 2008, special items had a negative impact on net income of EUR67 million.

The group’s share of adjustments and selected items related to Sanofi-Aventis had a negative impact on net income of EUR119 million in the second quarter 2009. The adjustments related to Sanofi-Aventis were EUR78 million in the second quarter 2008.

Reported net income (group share) was EUR2,169 million compared to EUR4,732 million in the second quarter 2008.

The effective tax rate for the group was 56% in the second quarter 2009.

The group did not buy back shares in the second quarter 2009.

Adjusted fully-diluted earnings per share, based on 2,235.6 million fully-diluted weighted-average shares, was EUR0.77 compared to EUR1.65 in the second quarter 2008, a decrease of 53%.

Expressed in dollars, adjusted fully-diluted earnings per share fell by 59% to $1.05.

Investments – divestments11

Investments excluding acquisitions and including net investments in equity affiliates and non-consolidated companies, were EUR3.1 billion ($4.2 billion) in the second quarter 2009 compared to EUR2.1 billion ($3.3 billion) in the second quarter 2008.

Acquisitions were EUR480 million in the second quarter 2009.

Asset sales in the second quarter 2009 were EUR781 million, consisting essentially of Sanofi-Aventis shares.

Net investments 12 were EUR2.8 billion ($3.8 billion) in the second quarter 2009 compared to EUR2.1 billion ($3.3 billion) in the second quarter 2008.

Cash flow

Cash flow from operating activities was EUR1,939 million in the second quarter 2009, stable compared to the second quarter 2008, mainly due to the offsetting effects of the decrease in net income, which was linked essentially to the drop in hydrocarbon prices between the two periods, and the change in working capital.

Adjusted cash flow13 was EUR3,237 million, a decrease of 33% compared to second quarter 2008. Expressed in dollars, adjusted cash flow was $4.4 billion, a decrease of 41%.

Net cash flow14 for the group was a negative of EUR837 million compared to a negative EUR220 million in the second quarter 2008. Expressed in dollars, net cash flow for the group was a negative $1.1 billion in the second quarter 2009.