Inditex has published results for its first fiscal quarter (February-April), reflecting as expected the strong impact of the coronavirus: historical losses of €409 million, positive EBITDA although 78% lower than in Q1’19, and a 44% drop in revenues. Nevertheless, the company confirmed the payment of a dividend against 2019 results of 0.35 euros/share, 60% less than a year earlier.
The company has been progressively closing factories worldwide since mid-March. Europe was first, followed by America, but now it expects a gradual re-opening in the coming weeks. The only exception is China, where there has already been some opening up. Gestamp has 11 plants, two R&D centres in China, representing less than 10% of the 112 production plants that it has globally. They hope that activity will return to normal more or less imminently in the rest of its factories.
In a scenario of oil prices (Brent) at $35 and Gas (Henry Hub) at $1.8, Repsol has drawn up a contingency plan to deal with the impact of COVID-19. This includes cancelling the extra share buyback for 5% of capital due to be executed in May, which, totalled 1Bn euros, but maintaining its dividend at €1 per share. The company also flags that it has sufficient liquidity to deal with this situation at least until 2024.
Inditex recorded net income of 3.63 billion euros in the fiscal year 2019-2020 (from 1 February 2019 to 31 January 2020), a rise of 6% compared to a year earlier. This was after making a 287 million euros provision in the Gross Margin to adjust the estimated value of the spring/summer campaign’s inventory affected by the Covid pandemic. Without this impact, its Gross Margin would have amounted to 16.09 billion euros, 56.9% of sales.
Brent crude oil is trading at $36 a barrel, down 20%, after OPEC and Russia broke off negotiations on Friday to try and cut the supply by 1.5 million barrels a day. At these levels, it completely breaks through the level indicated by the sector as break even, namely 45-55 dollars. Banco Sabadell analyses the sensitivity of the stocks they cover to variations in crude prices: Repsol, Total and ENI.
The credit quality of Spanish banks looks solid, despite the pull-back in reported profits. Solvency ratios sitting comfortably above requirements offer greater leeway for capital distribution and will result in higher returns, benefiting investors, says Scope Ratings. Spanish bank creditors should see the banks’ improved capital-generation capacity as a sign of strength, even if capital ratios have peaked for this cycle.
Mapfre recorded a 15.2% increase in 2019 net profit to 609 million euros, with revenues up 7.1% at 28,472 million euros. The company headed by Antonio Huertas will pay 447 million euros in dividends from 2019 results, amounting to 0.145 euros per share and a yield of 5.7%.
Telefonica’s dividend payment of 0.40 eur per share in cash will be divided into two payments of 0.20 euros / share.
Repsol (REP) has communicated the timetable foreseen for the capital increase approved by its last Shareholder General Assembly within the framework of the “Repsol Flexible Dividend” Programme
The National Markets and Competition Commission (CNMC in its acronym in Spanish) is processing a circular so that all energy companies which supply electricity, gas and hydrocarbons meet six ratios which constrain their level of debt and dividends in relations to the volume of assets, cash flow, EBITDA or financial costs.