Spain's Repsol said on Thursday its fourth-quarter adjusted net profit more than doubled, helped by high oil and gas prices, and flagged a big increase in capital spending for this year.
Its fourth-quarter profit surged to 2.01 billion euros ($2.15 billion) from 872 million a year earlier, topping the 1.75 billion euros expected by analysts polled by Refinitiv Eikon.
Net income for 2022 jumped to 4.25 billion euros up from 2.5 billion euros in 2021. Despite the strong performance, its shares fell as much as 3% in morning trading after the company said it would increase capital spending to more than 5 billion euros this year from 4.18 billion last year. "I think the weakness today is driven by the 2023 capex guidance," said Biraj Borkhataria, an analyst at RBC Capital Markets in London.
"Repsol plans to spend more than 5 billion euros in organic investments. This is quite a step up and investors will need clarity on where exactly this is going in order to have confidence in Repsol’s plans," he said.
Repsol used its higher cash flow to increase capital investment by 40% in 2022, reduce its net debt by 60% to 2.26 billion euros and increase shareholders' remuneration.
The company plans to raise its cash dividend by 11% to 0.70 euro per share and buy back 35 million additional shares, equivalent to 2.64% of its capital, and redeem 50 million shares, equivalent to 3.77% of its capital.
Repsol's hefty profit follows similar reports from larger rivals TotalEnergies, BP, Shell, Exxon Mobil, and Chevron, prompting calls to further tax the sector as households struggle to pay energy bills.
Repsol's Chief Executive Officer Josu Jon Imaz said last year that new taxes would threaten companies' investment plans at a time when they are crucial to ensure energy security.
($1 = 0.9345 euros)
(Reuters - Reporting by Inti Landauro; Additional reporting by Joao Vicente; Editing by Jason Neely, Christian Schmollinger and Sonali Paul)
