Repsol achieved in the first quarter of this year an adjusted net result of 447 million, which represents a decrease of 27.7% compared to the same period last year. This result, which specifically measures the behavior of the company’s businesses, was obtained in “a context of exceptional complexity, marked by a sharp drop in oil and gas prices, and the drastic decrease in demand caused by Covid -19 “.
“The kind of The company’s integrated business, along with its flexibility and resilience, were essential for their businesses to achieve a solid result in this very adverse scenario, “said the company chaired by Antonio Brufau today.
The average price of Brent and WTI crudes decreased by 21% and 17%, respectively, compared to the first three months of 2019. At the end of the quarter, Brent was trading below $ 20 per barrel. In the case of gas, the decreases were even more abrupt, with falls ranging between 36%, in the case of the Henry Hub, and 56% in that of the Algonquín.
This volatility and fall in international raw materials dramatically reduced the valuation of Repsol’s inventories, with a negative impact of 790 million euros, so the net result for the first quarter of 2020 was -487 million.
To face the present circumstances, Repsol adopted a Resilience Plan by 2020, which includes the implementation of initiatives that will entail added reductions of more than 350 million euros in operating expenses and more than 1,000 million in investments, as well as optimizations of working capital of close to 800 million euros with respect to the initially budgeted metrics.
Repsol’s portfolio of assets “has great flexibility allowing it to make agile investment optimization decisions, which is one of its most useful levers to face the new and complex scenario, and is key to the 26% reduction of the investments initially planned for the year, “highlights the company.
Net debt as of March 31 reached 4,478 million euros, compared to 4,220 million at the end of the previous year. In line with its 2020 Resilience Plan, Repsol estimates that the company’s net debt will not increase at the end of the year compared to 2019.
Repsol explains that it has a comfortable financial liquidity, which at the end of March allows you to cover your debt maturities in the short term and beyond, until the year 2024 included, without the need for refinancing. In addition, the company was reinforced in early April with two bond issues for a total amount of 1,500 million euros, at five and ten years, respectively, with demand that exceeded supply by more than 2.6 times. Repsol also increased the lines of credit committed in 2020 by 1.3 billion euros.
“Despite the adverse context, the commitment to shareholder remuneration is maintained during the year 2020 assumed in the current Strategic Plan, 1 euro per share. Therefore, it is expected that 0.55 euros per share will be paid in July, under the scrip dividend formula, “he highlights.
In accordance with its vocation as a multi-energy company and its objective of leading the energy transition, Repsol has redefined its business segments and, as of this year, the “Downstream” area will be divided into two: Commercial and Renewable (Mobility, LPG , Lubricants and Electricity
The Commercial and Renewable business obtained a result of 121 million euros, compared to 137 million in the same period of 2019. The restrictions imposed to combat the coronavirus reduced demand and affected the area of mobility. For its part, GLP also reduced its sales due to the impact that the Covid-19 had on the hotel and restaurant sector and the highest temperatures recorded in January and February.
Regarding the Industrial business, increased its result by 6%, up to 288 million euros. The business managed to offset the negative influence of the volatile price environment and the reduction in demand, which mainly affected the Refining area.
Regarding Chemistry, the area was affected by maintenance at its facilities in Sines and Tarragona. In addition, since the beginning of the pandemic, it adjusted its operations due to the fall in demand in sectors such as the automobile and the increase in others related to health and food, vital in the fight against Covid-19, for which its materials bonuses are indispensable.
Lastly, the “Upstream” business achieved a result of 90 million euros, compared to 323 million achieved between January and March 2019, mainly burdened by the extraordinary drop in the prices of internationally referenced raw materials. Average production increased 1.4% to 710,300 barrels of oil equivalent per day.