Bankinter | Repsol has published weak results for 3Q19. Principal figures compared with the consensus (Bloomberg): Ebitda 1.597 Bn€ (-21%); adjusted NAP 522 M€ (-11%) vs 529 M€ estimated (Bloomberg); Net Profit 333 M€ (-47%).
Renta4 | The oil company has returned to the market for the first time since May 2017, closing an issue of 8 year bonds for 750 M€ at a price of 99.684% and fixed annual coupon of 0.25%, whose trading admission will be sought in the Luxembourg stock market.
Bankinter | Recomendation Buy and Objective Price 17,4€/share. The rise in oil prices and growth opportunities will drive the share price. Repsol will be driven by exogenous (the sharp increase in oil prices benefits it directly – Brent YTD +39%) indigenous factors.
Morgan Stanley | With oil up 30% YTD, fairly decent quarterly figures, dividends easily covered, with potential to grow and clearly above a market without upside, and with a process of positive profit revisions, we insist in dedicating half an hour to two ideas which are now being oversold and which have lost all they gained in Q1 and which their high dividend is clearly attractive in the market and which we believe could have returns of around 10% in the relatively short term.
Renta 4 | Repsol Downstream investors’ day showed not only the firm’s resilience but also its capacity for future growth. We recall that within its growth target for operational cash flow from 4.6 Bn€ in 2017 to 6.5 Bn€ in 2020 at 50%/b, Downstream cash flow would grow 800 M€: 300 M€ from international margins, 200 M€ from improvements in profitability from greater efficiency and 300 M€ from expansion and new low carbon business preparing for the energy transition.
Renta 4 | Spanish oil company Repsol published its operational data for Q119. In the first quarter of the year, the price of Brent Crude (63.1$/b) fell -5% yoy and -8% compared to Q418 because of the strong reduction in crude prices since their highs at the beginning of October (-42% until the end of December, although with a subsequent recovery of +28% from the beginning of 2019 until the end of March).
Repsol has made the largest discovery of gas in Indonesia in the last 18 years and one of the 10 largest in the world in the last 12 months, with a preliminary estimation of at least 2 billion cubic feet of gas in recoverable resources, the equivalent of 2 years of gas consumption in Spain and 20% of Repsol’s natural gas reserves.
Repsol has secured 12 new blocks in an area near to Pikka, the largest on-land oil discovery in the US in the last 30 years. The oil company has secured mining domination in a zone situated south of the River Colville (Alaska, US), where ConocoPhillips has also made significant discoveries. Repsol´s partner Oil Search has also secured four leasing contracts.
According to data provided to the regulator (CNMV) by the company, Repsol´s oil production amounted 691,000 barrels per day in the third quarter of the year, a reduction of 4.3% compared to the previous quarter and practically in line with the 693,000 barrels per day of the same quarter last year.
Repsol has reached agreement to acquire 40% of Mexican lubricant company Bardahl, which represents its biggest purchase in this business and pushes forward its internationalisation strategy in Downstream.