Repsol made net profit of 689 million euros in the first quarter of 2017, up 59% from a year earlier, fuelled by plans implemented to increase the company’s resilience and flexibility against the current backdrop of low prices. The FactSet consensus forecast net profit of 531 million euros.
The company explained that during the quarter, the international reference prices of oil and gas were on average 53,7 dollars per barrel in the case of Brent, and 3,3 dollars per MBtu in the case of Henry Hub.
Adjusted net profit stood at 630 million euros, compared with 572 million a year ago. Repsol’s upstream business registered profits of 224 million euros, 207 million higher than the first quarter of 2016.
Repsol said its downstream business remained “a big cash generator,” recording a profit of 500 million euros, in line with that of a year earlier. Improvements were made in Trading, Gas & Power, Marketing and Refining in Peru, the latter as a result of putting its low sulpher diesel unit into operation in the last quarter of 2016.
First quarter Ebitda stood at 1.844 billion euros, up 80% from a year ago.
Average production for the quarter was 693.400 barrels of oil equivalent per day, higher than that obtained at end-2016, and fuelled by the contribution from the UK, Libya and Brazil. In the latter, the start up of operations at the Lapa field contributed to Repsol reaching a new record level of production in Brazil.
With regard to Repsol’s exploration business, the company highlighted that in the early months of this year, it made the biggest find of hydrocarbons registered in the last 30 years on US territory.
Bankinter analysts believe that these results “are good and better than expected across the board.” They were surprised by the slight increase in debt from the fourth quarter of 2016, “due to the rise in working capital…which we think is very much influenced by the strong increase in capex over the quarter (+177%).”
“We think the share price will positively discount these results.” Finally, Bankinter analysts say that in their review of Spanish stock portfolios for May, they have included Repsol. “We believe the trend will be positive in the short-term.”
