Renta 4 | Repsol (REP) has published its results for Q2 2025, significantly exceeding our estimates and those of the consensus, both in EBIT (up 16% versus consensus) and in adjusted earnings (up 41% versus consensus), recording declines of 19% year-on-year and 18% year-on-year, respectively, reflecting the volatile environment of the quarter, with lower realisation prices for crude oil offset by higher gas prices in upstream and where the industrial business was heavily impacted by the blackout on 28 April and the weakness of the chemicals business.
Cash flow from operations amounted to €1,718 million (up 43% on Renta 4’s estimate and up 86% year-on-year), thanks to improved operating performance and the low comparative base resulting from the impact in Q2 2024 of the resolution of the arbitration with Sinopec and the acquisition of a 49% stake in RRUK, exceeding investments, interest and treasury shares acquired under the share buyback programme. Net debt fell to €5,728 million (down 2% year-on-year), representing a leverage ratio of 18% and 7% excluding leases.
As expected, after completing the first share buyback and amortisation programme for €350 million (2.18% of capital), Repsol has announced a new programme for an equivalent amount of €350 million, which is expected to be executed and amortised during the second half of the year, thus meeting its target of repurchasing shares in 2025 for a minimum of €700 million.
We expect a positive impact on the share price, as although the results show significant declines compared to Q2 2024, they far exceed our estimates and those of the consensus, with good cash generation and debt reduction while meeting its shareholder remuneration commitments. In addition, visibility for achieving its asset rotation commitments is high, having announced divestments of more than €1.2 billion (>60% of the total divestment target for the year), including the exit from Colombia, the rotation of two renewable portfolios of 400 MW and 777 MW in Spain and the United States, and the sale of its 24% non-operating stake in the Corridor block in Indonesia. We expect confirmation of its intention to rotate Outpost’s solar assets in the United States (~629 MW) as well as another 700 MW in Spain, which would enable it to reach its target of €2 billion.
