Spain: Repsol Profit Down

Repsol posted net income of 2.060 billion euros for 2012, a 6.1% decline from the year earlier.

At current cost of supply (excluding the change in value of the oil inventories that the company stocks as part of Spain’s strategic reserve) Repsol’s net income was 2.048 billion euros, 5.4% higher than 2011, when the earnings of YPF were included for the whole period.

The Upstream unit, the company’s growth engine, saw an improved performance in all metrics in 2012. Output rose 11% during the year with a record reserve replacement ratio of 204%.

During 2012, Repsol completed the execution of four out of its ten key growth projects from the 2012-2016 Strategic Plan, significantly advancing its production increase goals.

In 2013, Repsol achieved a significant milestone with the start of commercial production from the giant Sapinhoá field in Brazil, one of the largest fields developed in that country to date.

The Downstream unit posted wider refining margins and an optimisation of production following the completion of the improvement and expansion projects of the Cartagena and Bilbao refineries, setting them amongst Europe’s most advanced units.

The industrial activity was accompanied by a strategy of financial strengthening as outlined in the company’s strategic plan. Last year, the company started the “Repsol Flexible Dividend” program, with an acceptance rate higher than 60% of the company’s shareholding. This, together with divestments and active financial management, allowed the company to cut debt through December 31 by 2 billion euros and generate liquidity (excluding Gas Natural Fenosa) which triples short-term debt maturities.

Additionally, following the year’s close and in accordance with the strategic goal of asset divestments, Repsol agreed to sell LNG assets to Shell for $6.653 billion, With this divestment, Repsol has more than met its targets in the 2012-2016 Strategic Plan of divesting assets worth between 4 and 4.5 billion euros.

The LNG sale agreement strengthens the company’s balance sheet and allows Repsol to reduce net debt, (excluding Gas Natural Fenosa) to 2.2 billion euros.

Yesterday, the Board of Directors of Repsol approved to submit to its shareholders for approval at the next General Shareholders Meeting the continuation of the “Repsol Flexible Dividend” program and the payment to shareholders of a final dividend for the fiscal year 2012 equivalent to a gross 0.50 euros per share, comprising a dividend in cash of 0.04 euros (gross) per share with dividend rights and the implementation, within the framework of the program, of the third scrip dividend of the company.

The “Repsol Flexible Dividend” Program allows shareholders to elect receiving newly issued paid-up shares of the company without tax withholding or, at their election, receiving an amount in cash through the sale of the free-of-charge allocation rights at the market price or to the company at a guaranteed fix price.

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LNG World News Staff, February 28, 2013