During 2019, Cepsa recorded Clean CCS EBITDA of €2,058 million. This is 17% higher than the previous year, when it stood at €1,762 million.
In a statement, the company explained that the rise mainly stemmed from the positive performance of the Exploration and Production (+48%) and Marketing businesses (+35%).
Lower net income
Cepsa’s adjusted net profit in 2019 was €610 million, while in 2018 it was €754 million. This decrease (-19.1%) is attributable to “an environment of low refining margins, especially in the first and final quarter of the year; as well as the lower margins of certain chemical products,” the company said.
The accumulated net benefit for the year stood at €820 million, compared with €830 recorded in 2018.
In 2019, Cepsa optimized its capital structure, extending the average term of its debt to over five years.
Likewise, the cash generated during the year has allowed Cepsa to reduce net debt by 11%, to €2,746 million; compared to December 2018. The Net Debt/EBITDA ratio stood at 1.4x, four tenths lower than at the close of 2018 (1.8x).
Investment during the period amounted to €924 million and free cash flow was €1,152 million (before the payment of interest and dividends).
The Company has made significant investment into the development of the Abu Dhabi fields. It also invested in projects in the Refining business unit aimed at optimizing refineries.
In terms of safety, the LWIF (Lost Workday Injury Frequency) rate, was 0.87 accidents per million hours worked in 2019, in line with the results from 2018. As to GHG, the level of CO2 per ton produced remained at levels similar to those of the previous year.
Results per business
Clean CCS EBITDA of the E&P business unit increased by 48% in 2019 compared to 2018, rising to €963 million. This was mainly due to the start of operations in the 2019 financial year at the SARB and Umm Lulu fields in Abu Dhabi, which were acquired in 2018.
The adjusted net profit of this business amounted to €194 million, 17% lower than 2018. This was primarily due to reduced income in Colombia, due in turn to lower sales prices and higher amortizations and taxes. It was also affected by the still limited contribution of SARB and Umm Lulu (since these fields have not yet reached their “plateau” of production) given the high amortizations, taxes and royalties in Abu Dhabi.
As to Refining, the clean CCS EBITDA of this business unit in 2019 was €433 million. The adjusted net profit was €124 million, while in 2018 it was €258 million.
This decrease was mainly attributable to lower refining margins, as experienced by the broader market, which were hampered by low light and middle distillate cracks in the Mediterranean and by higher supply costs owing to increased sour crude premiums.
For its part, Marketing business “performed very well during 2019, achieving Clean CCS EBITDA of €463 million, 35% higher than in 2018. This increase was mainly due to the strong performance of the network of service stations, the bioenergy business unit and the increase in sales volumes and margins in the asphalts business.”
The chemicals business unit recorded Clean CCS EBITDA of €246 million in 2019, in line with 2018. Adjusted net profit was €107 million, 3% lower than in 2018.
Results of the chemicals business unit were affected by the deterioration of the international margins of certain chemicals, Cepsa explained.
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