Repsol's Adjusted Net Profit Falls on Lower Oil, Gas Prices

Thursday, October 26, 2023

Energy company Repsol's REP.MC adjusted net profit fell 27% year-on-year in the third quarter because of lower oil and gas prices, it said on Thursday, adding it would further diversify into renewables to offset fossil fuel volatility.

The company reported an adjusted net profit of 1.1 billion euros ($1.16 billion). That was below the 1.5 billion euros posted in the same period a year ago, but slightly above the company-provided average forecast of 1.09 billion euros.    

Repsol's Chief Executive Josu Jon Imaz said the company's shift into renewable energy and sustainable fuels would allow it to maintain profitability despite oil and gas price swings.

Although crude oil was 22% lower in the first nine months of the year than in the same period in 2022, while gas was 60% lower, Repsol's adjusted net profit in the period only fell 19% to 3.82 billion euros.

"In a volatile environment like the current one, we are delivering solid results, increasing our shareholder returns and supporting our customers," Imaz said in a statement.

While some companies have grown more cautious about renewable energy, Spanish power company Iberdola on Thursday raised its full-year outlook on the basis of higher earnings from green power.

Repsol raised its dividend to 0.40 euros ($0.42) per share, 14% more than the one paid in January 2023, to try to offer an "attractive return" while remaining disciplined.

Including share buybacks, Repsol will pay its shareholders a total of 2.4 billion euros, it said.

Separately, Repsol said it sees future business opportunities in Venezuela after the United States temporarily lifted sanctions on the South American country's oil industry.

"That will increase the availability of heavy crude for the company's refineries, which have differentiated characteristics and obtain better yields with that kind of oil," the company added.

Last week, the U.S. lifted most restrictions on Venezuela for producing, selling and exporting oil to its chosen markets over the next six months. 

($1 = 0.9481 euros)

(Reuters - Reporting by Inti Landauro; Editing by David Latona and Barbara Lewis)

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