Repsol doubles profit due to higher oil prices, but refining weighs

Repsol doubles profit due to higher oil prices, but refining weighs

Spanish energy company Repsol doubled its net profit in the first half on Thursday, boosted by high oil and gas prices, but its share price suffered as investors expected more.

The rapid recovery in demand after the COVID-19 lockdowns pushed energy prices to record highs that have been pushed to record highs by Russia’s invasion of Ukraine, boosting profits for many of the oil companies. of the world.

Repsol made a net profit of 2.54 billion euros ($2.59 billion) between January and June, compared to 1.24 billion euros in the same period last year. Brent crude prices rose 65% in that period, while Henry Hub gas prices soared 157% on average.

Despite the positive comparisons, shares were down as much as 4% in early trading. Analysts at CM Capital Markets noted that first half net profit was below average analyst estimates, which is “negative news for the stock.”

In a sign of the change in focus in the way the world manages its energy sources, Repsol made an impairment provision of 1,840 million euros in its refining business, alluding to “future uncertainty due to the evolution of the energy crisis , the economic situation and regulatory measures”.

However, the profit increase prompted the company to announce that it will increase the size of its share buyback plan and that it now intends to reduce share capital by 75 million shares, instead of the previous target of 50 million.

Between January and June, just over half of the group’s adjusted net profit came from its international business, which is mainly engaged in the exploration and production of hydrocarbons.

The increase in the value of hydrocarbons held in strategic reserves in Spain added 1,200 million euros to Repsol’s net profit in the first half.

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