Repsol, the largest Spanish oil company, reported a net profit of 969 million euros in the first quarter of the year. This was a 12.9% decrease compared to the same period in 2023. Despite this decline, liquidity remains strong at 10,332 million, covering nearly four times all short-term debt maturities.
The adjusted result, measuring operating performance, was 1,267 million euros, which represents a 33% decrease. The drop in fossil fuel prices, particularly natural gas, and lower refining margins have been key factors in their recent financial performance. Repsol’s shares fell around 2% on the Ibex 35 index.
Despite an increase in net debt to 3,901 million due to distribution of dividends and organic and external investments, Repsol has committed to investing between 16,000 and 19,000 million between 2022 and 2027. Half of this amount will go towards renewable energy projects. The business segments within Repsol showed heterogeneity with exploration and production of crude oil and gas recording a profit of 442 million euros despite various factors including the price of gas and recent divestments.
The industrial area saw a significant drop in profits to 731 million mainly due to refining margin reductions. The client segment involving fuel and electricity marketing achieved an adjusted profit of only -85 million euros due to challenges in the wholesale electricity market in Spain. Low-carbon generation also recorded negative figures amid ongoing challenges in this sector. On a positive note, corporations recorded an adjusted profit of -888 million euros despite facing challenges such as increased competition from renewable energy sources.
Repsol recently distributed dividends to shareholders and began a share buyback program which enhances indirect remuneration for investors and supports its financial strategy amidst changing market conditions.
Overall Repsol’s first quarter performance highlights its commitment to investment in renewable energy while also acknowledging the impact of declining fossil fuel prices on its bottom line. With continued investment in low-carbon initiatives and strategic partnerships with other companies in the industry