Repsol beats forecasts thanks to high oil and gas prices

The Repsol logo outside their headquarters in Madrid, December 16, 2014. REUTERS/Andrea Comas

MADRID, Feb 17 (Reuters) – High oil and gas prices helped Spain’s Repsol (REP.MC) to post earnings above market expectations on Thursday, giving it more financial firepower to spend on low-carbon operations investors are increasingly demanding of energy companies.

Benchmark Brent crude oil and Henry Hub gas rose 70% and 86% respectively during 2021 as tight gas supplies collided with rising demand as economies recovered from COVID-19 shutdowns.

For Repsol, this translated into a 70% annual increase in free cash flow from operations to 5.45 billion euros ($6.19 billion) for 2021.

Earnings beat forecasts provided by the company, with adjusted net income at 872 million euros against the company’s analyst consensus of 783 million euros.

Earnings before interest, tax, depreciation and amortisation (EBITDA) at current cost of supply hit 7.07 billion euros in the full year, above the company’s target of 6.7 billion euros.

In line with larger rivals including BP and TotalEnergies, Repsol is responding to regulatory and market pressure to reduce planet-warming carbon emissions by investing in renewable energy.

It plans to allocate 35% of investments between 2021 and 2025 to low-carbon activities. This plan includes an attempt to sell a stake in its newly created renewable energy generation unit. read more

Repsol also boosted its dividend 5% last autumn to 0.63 euros.

The company, meanwhile, has been grappling with an oil spill off the coast of Peru on Jan. 15, which it blamed on unusual waves triggered by a volcanic eruption thousands of miles away in Tonga. read more

Repsol said on Thursday that “intensive work” was under way to clean up the oil, which it estimated at 10,396 barrels. ($1 = 0.8800 euros)

Reporting by Isla Binnie
Editing by David Goodman

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