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Repsol's net income increases by 59%

  • Repsol earned a net income of 689 million euros in the first quarter of 2017, a 59% increase from the same period the previous year, following the implementation of plans to boost and make more flexible its businesses in the current context of low crude oil prices.
  • The adjusted net profit reached 630 million euros, a 10% increase over the same period of 2016.
  • EBITDA rose to 1.844 billion euros, which constitutes an 80% increase over the first quarter of 2016.
  • Average hydrocarbon production between January and March was 693,400 barrels of oil equivalent per day, an increase over the production average reached at the end of 2016 thanks to contributions from Brazil, Libya and the United Kingdom.
  • The Upstream area (Exploration and Production) had an outstanding performance and increased its income by 207 million euros over the same period of the previous year, to 224 million euros.
  • In March, the company announced the largest discovery of hydrocarbons on U.S. soil in the last 30 years.
  • The Downstream area (Refining, Chemicals, Marketing, Lubricants, Trading, LPG and Gas & Power) obtained an income of 500 million euros and was a major cash generator for the company.
  • The refining margin indicator in Spain was 7.1 dollars per barrel, consolidating the excellent performance in this area during the last two years.

Nota de Prensa

4 de maio de 2017 10:10 CET

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Repsol achieved net income of 689 million euros in the first quarter of 2017, 59% greater than the 434 million euros obtained in the same period last year. This increase can be attributed to improvements to the resilience and flexibility of the company’s business activity in the current environment of low prices.
 
During the quarter, the international indices for gas and crude oil prices averaged 53.7 dollars per barrel in the case of Brent, and 3.3 dollars per MBtu for Henry Hub.
 
Repsol’s adjusted net income was 630 million euros, compared with 572 million in the first quarter of 2016. The company’s businesses’ positive performance continued. This was especially significant in upstream, where at 224 million euros, its income increased by 207 million euros from the first quarter of 2016.
 
The Downstream business remained a significant cash generator for the company and achieved an income of 500 million euros - in line with the first quarter of 2016 - with improvements in Trading, Gas & Power, Marketing and refining in Peru, the latter a result of the start-up in the last quarter of 2016 of the low sulfur diesel unit.
 
The strength of Repsol’s businesses was reflected in the company’s EBITDA, which reached 1.844 billion euros, 80% greater than in the same period the previous year.
Also, the synergies and efficiencies program materialized and produced more than 500 million euros of the goal set for 2017 in just the first quarter. This year, the program is expected to yield a total of 2.1 billion euros.
Average production for the quarter was 693,400 barrels of oil equivalent per day, an increase over the production average reached at the end of 2016, due to contributions from the United Kingdom, Libya and Brazil. In Brazil, the startup of the Lapa reservoir contributed to a new production record for Repsol in Brazil.
In terms of exploration activity, Repsol achieved new success in early 2017 when it discovered the largest hydrocarbon deposit on U.S. soil in the last 30 years.
Also, in late March the Repsol Board of Directors agreed to convene the company’s Annual General Meeting, which will take place on May 19th, likely at second call.

Strong earnings increase and large discovery in the U.S.

The adjusted net income of the Upstream area reached 224 million euros, an increase of 207 million euros over the 17 million euros registered in the first quarter of 2016.

The efficiency and synergies program, together with the partial recovery of international raw materials price indices, helped to boost earnings for the business.

Average production for the quarter was 693,400 barrels of oil equivalent per day, an increase over the production average reached at the end of 2016 and in line with the goal set by the company in its strategic plan.

Repsol increased its average production mainly due to activity in the United Kingdom, resumed activity in Libya and the startup of the Lapa reservoir in Brazil. This project in Brazil, which began producing in December 2016, contributed considerably to the company’s new record for production in that country, set in March of this year.

In terms of exploration activity, in March, Repsol announced the largest conventional hydrocarbon discovery on U.S. soil in the last 30 years, in the North Slope borough of Alaska. It is estimated that the contingent resources of the area where the discovery was made, known as Nanushuk, will total approximately 1.2 billion recoverable barrels of light crude oil.

Downstream: Strong cash generation

The net adjusted result for the Downstream area totaled 500 million euros, in line with the 556 million euros obtained in the first quarter of 2016.

In the first quarter of the year, the area maintained its solid cash generation, which reflects the competitive advantages of the integrated business model and the quality of Repsol’s assets.

The commercial and chemicals businesses continued to demonstrate their strength this quarter, in addition to improved activities in Trading and Gas & Power, Marketing and refining in Peru.

The refining margin indicator in Spain was 7.1 dollars per barrel, yet another strong quarter to consolidate the strength seen in the last two years, surpassing the 6.3 dollars per barrel obtained in the first quarter of 2016.

These results are especially positive considering that during the first quarter of 2017, planned maintenance shutdowns were carried out at the refineries in Bilbao and A Coruña. These halts have allowed the company to implement improvements in innovation, efficiency and productivity at its facilities, to maintain Repsol as one of Europe’s leading refining companies.

Results table

This document contains statements that Repsol believes constitute forward-looking statements which may include statements regarding the intent, belief, or current expectations of Repsol and its management, including statements with respect to trends affecting Repsol’s financial condition, financial ratios, results of operations, business, strategy, geographic concentration, production volume and reserves, capital expenditures, costs savings, investments and dividend payout policies. These forward-looking statements may also include assumptions regarding future economic and other conditions, such as future crude oil and other prices, refining and marketing margins and exchange rates and are generally identified by the words “expects”, “anticipates”, “forecasts”, “believes”, estimates”, “notices” and similar expressions. These statements are not guarantees of future performance, prices, margins, exchange rates or other events and are subject to material risks, uncertainties, changes and other factors which may be beyond Repsol’s control or may be difficult to predict. Within those risks are those factors described in the filings made by Repsol and its affiliates with the Comisión Nacional del Mercado de Valores in Spain and with any other supervisory authority of those markets where the securities issued by Repsol and/or its affiliates are listed. 

Repsol does not undertake to publicly update or revise these forward-looking statements even if experience or future changes make it clear that the projected performance, conditions or events expressed or implied therein will not be realized.

This document mentions resources which do not constitute proved reserves and will be recognized as such when they comply with the formal conditions required by the system “SPE/WPC/AAPG/SPEE Petroleum Resources Management System” (SPE-PRMS) (SPE – Society of Pretroleum Engineers).

This document does not constitute an offer or invitation to purchase or subscribe shares, pursuant to the provisions of the Royal Legislative Decree 4/2015 of the 23rd of October approving the recast text of the Spanish Securities Market Law and its implementing regulations. In addition, this document does not constitute an offer to purchase, sell, or exchange, neither a request for an offer of purchase, sale or exchange of securities in any jurisdiction.

The information contained in the document has not been verified or revised by the External Auditors of Repsol.

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