Cepsa achieved a net profit of 820 million euros in 2019, 1.2% less than a year earlier, while the adjusted net result CCS (discounting the variation in the value of inventories) fell 19%, to 610 million, due to the lower refining margins and the decrease in the price of crude oil.
On the other hand, the adjusted gross operating profit (ebitda) increased by 17% and stood at 2,058 million, thanks, fundamentally, to the good performance of the Exploration and Production and Marketing businesses, according to the accounts published this Friday by the oil company, controlled by Mubadala Investment Company.
The Exploration and Production business increased its adjusted EBITDA by 48%, to 963 million, driven by the start of operations of the SARB and Umm Lulu fields (in Abu Dhabi), acquired in 2018. These fields allowed to increase the production by 11%. Cepsa production, up to 92.6 million barrels per day.
On the other hand, the adjusted net profit fell 17% (194 million) due to the drop in Colombia’s contribution due to lower sales prices and higher depreciation and taxes.
Refining activity contributed an adjusted gross operating result of 433 million, 25% less, and cut its adjusted net profit by 52%, to 124 million.
According to Cepsa, this decrease, experienced by the market in general, was due to the lower refining margins, impacted by the cracks of light and medium distillates in the Mediterranean; as well as higher supply costs due to the rise in premiums for high sulfur crude.
The level of utilization of refinery distillation capacity was 89%, in line with 2018.
The Marketing business generated an adjusted EBITDA of 463 million, 35% more, thanks to the good performance of the service station network, the bioenergy business and the increase in sales volumes and margins in the asphalt business, as well as to the application of the new accounting standards on rentals (75 million).
The adjusted net profit of this area stood at 221 million euros, 17% higher than the previous year.
Chemistry activity achieved an adjusted gross operating result of 246 million, in line with 2018, while the adjusted net profit fell 3% (107 million) due to the deterioration of international margins of some products and despite the fact that it was recorded 26 million due to the entry into force of IFRS 16.
In 2019, Cepsa extended the average life of its debt to more than 5 years and managed to cut its net debt by 11%, to 2,746 million, thanks to the cash generation, according to the same source.
Investments during this period amounted to 924 million euros, compared to 2,255 million in 2018, and the free cash flow was 1,152 million euros (before the payment of interest and dividends).