Madrid — Weak energy prices dragged down Spain’s Repsol third quarter adjusted net profit, although it still beat market expectations thanks to its resilient downstream unit.
Repsol produced more oil during the period, but prices have been under pressure this year by rising supply from the United States and expectations that slowing economic growth and the impact of trade disputes will weigh on demand.
The oil and gas firm reported a net income of 522 million euros in the three months to September, down 11.2% from the same period last year. Analysts had expected net income of 479 million euros, according to a poll provided by the company.
The downstream unit, which includes refining, marketing and GLP businesses, reported a 10.7% rise in its third quarter adjusted net income. Refining margins in Spain jumped to $5.5 per barrel from $3.5 in the previous quarter, Repsol had said earlier in October.
The company had trimmed its guidance for full-year core earnings and refining margins in July, calculating it could squeeze $6 out of each barrel, compared with a previous estimate of $7.6.
Repsol bases its targets on an oil price of $50 a barrel. The realisation price for a barrel of oil was $55.3 in the quarter, compared with $66.9 the year before, it said.
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Net debt stood at 3.84 billion, 174 million higher than at the end of the second quarter, due to treasury stock acquisitions for its program to buy back and cancel 5% of outstanding shares to increase shareholder remuneration.
With a prominent role in a global bid to shift to a low-carbon economy, Repsol is investing in low-emissions projects including wind and solar generation, and electricity assets.
A detailed analysis of 50 oil and gas companies carried out by the Transition Pathway Initiative in September found only Repsol and Royal Dutch Shell to be aligned with existing national emissions targets under the 2015 Paris Agreement.
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- Reuters
