Repsol posts net profits of €1.4 billion, down by 32%

Repsol net income

Repsol posted net income of €1.4 billion in the first nine months of the year, down by 32.47% from the previous year, according to the January-September results presented by the company on Thursday.

The document added that the adjusted net profits decreased by 4.83%, compared with the results obtained in January-September 2018.

Meanwhile, the operating cash flow increased by 22%.

Following the publication of the results, Repsol’s shares went down by 0.667% in the Madrid Stock Exchange at 08:11. Throughout the day, prices recovered and increased by 1.20% at 13:06.

Repsol’s net profits decrease

Repsol posted net income of €1.4 billion in the first nine months of the year, compared with €2.1 billion in the same period of last year.

This result was driven by a €344 million gain recorded after the sale of its share in Naturgy in May 2018.

Furthermore, the valuation of the hydrocarbon inventories the company holds was higher between January and September 2018. This was due to higher crude and gas prices than this year, which represented an effect of €329 million.

Adjusted net income, which excludes the aforementioned effect of the inventory valuation, was €1.6 billion; compared with the €1.7 billion achieved between January and September 2018.

Shareholder remuneration

In this context, the company has continued to generate value and increased its operating cash flow by 22% over the year, to €4 billion. In the words of Repsol CEO Josu Jon Imaz, “the robust performance of cash flow, in a weaker market environment, demonstrates the soundness of our strategy.”

This led the Board of Directors, in July of this year, to agree to propose to the next General Shareholders’ Meeting an increase of shareholder compensation through the amortization of 5% of the share capital as of December 31, 2018. This amount will be added to the amortizations carried out in conjunction with the different scrip dividends.

Lower results in the Upstream business

The Upstream business (Exploration and Production) posted a result of €864 million in the first nine months of the year, down from 1.015 billion in 2018. This indicator was influenced by lower crude and gas prices and the production shutdowns in Libya.

Average production in the first nine months of the year was 702,000 barrels of oil equivalent per day (boe/d); also down from 713,000 boe/d in the previous year.

This lower production is primarily due to the temporary interruptions of activity in Libya, the maintenance work carried out in Trinidad and Tobago, the disinvestment of Midcontinent (United States), and the expiry of the Jambi Merang license (Indonesia), Repsol stated.

During the period, the company obtained new barrels from the connection of wells in Marcellus and Eagle Ford (United States); Duvernay (Canada) and Akacias (Colombia), as well as the acquisition of Mikkel and Visund (Norway).

This comes in addition to the start of production at Buckskin, a significant project in the United States’ Gulf of Mexico, whose output in this initial phase has reached 30,000 barrels of oil per day.

In terms of exploration activities, Repsol drilled 17 exploration wells in the first nine months of the year, nine of which were positive. Three are still under evaluation.

A significant highlight was the discovery made in the Sakakemand block in Indonesia, regarded as the world’s largest onshore oil deposit so far this year.

Innovation and new markets

The Downstream business (Refining, Chemicals, Mobility, Lubricants, LPG, Trading, Gas Wholesale, and Repsol Electricidad y Gas) achieved a result of €1 billion euros, in line with the €1 billion posted between January and September last year.

The Chemicals, Peru, Trading and Mobility areas showed better performance. Meanwhile, the refining unit was influenced by an adverse international climate.

As to electricity generation, on July 1, it announced the addition to its portfolio of three new renewable energy projects, two wind and one solar, which, once developed, will represent a combined capacity of approximately 800 MW, with capacity to produce enough electricity for some 650,000 households.

The company also continued to add electricity and gas clients, so that it currently has more than 965,000 customers who are benefiting from an attractive and unique offer in the market, with cutting-edge digital solutions and exclusive advantages. Additionally, the electricity sold by the company is certified as 100% low in emissions.

Finally, regarding mobility plans, Repsol inaugurated the first ultra-fast charging points in Spain at two of its service stations. One of them, located in Ugaldebieta station (Vizcaya), has the most powerful recharge points in Europe.

For more information, check Energía16

See also: Repsol posts net income results of €1,133 billion in 1H 2019

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