Repsol achieved a net profit of 2,539 million euros in the first half of the year, during which it continued to develop projects to advance its goal of net zero emissions. This figure, added to the 2,499 million euros obtained in 2021, partially offsets the 2019 and 2020 financial years, which added significant losses, according to the company, for a value of more than 7,100 million euros, coming from asset adjustments to be net zero emissions and the global health pandemic.
The semester was marked by a volatile international contextconditioned by the tensions caused by the war in Ukraine, which led to a rise in the prices of raw materials on the world markets, underlines the company.
About half of the net result, 1,206 million euros, corresponds to the accounting valuation of the stocks that the company stores as a strategic reserve for Spain. These stocks, which the company has increased over the last quarter, strengthen Repsol’s ability to guarantee supply, even in volatile situations such as those experienced throughout the world since the start of the health pandemic and the war in Ukraine.
The notable increase in this item, which almost tripled compared to the first half of the previous year, is explained by the gradual rise in the prices of hydrocarbons and their derivatives, conditioned, mainly, by the tensions generated by the invasion of Ukraine. Thus, Brent crude oil increased its price over the period by 66% compared to 2021, averaging $107.9 per barrel in the first half. For its part, Henry Hub gas reached 6.1 dollars per MBtu on average, or 118% more than between January and June 2021.
The “volatile international context and increased regulatory pressure on fossil fuels in the European Union (such as the ban on the sale in the European Union of combustion engine cars from 2035)”, reports the group, has leads the company to register provisions for impairment the book value of its refining assets for a value of 1,844 million euros. These provisions constituted the majority of the specific results for the semester. Repsol maintains its desire to undertake a profound transformation of its industrial complexes to become multi-energy hubs and guarantee their future sustainability.
Adjusted net income for the first six months of the year amounted to 3,177 million, nearly 56% of which came from international activity, the main representative of which is Exploration and Production. Guided by efficiency measures and more geographically focused management, this activity “demonstrated great flexibility and ability to maximize the value it derived from rising hydrocarbon prices”, adds the company.
In this sense, it should be noted that during the semester its basket of crude oil behaved above international reference prices, with an increase of 68.3%. All this led to a result of 1,678 million euros for the area, which carries out all its activity outside Spain, more than half of the total obtained by the company.
gas station discount
In the face of rising international gasoline and diesel prices, Repsol “demonstrated its commitment to society” by granting significant discounts at its service stations, resulting in more than 150 million euros in savings for its customers. This figure had an impact on the results of service stations in Spain, which did not make a profit in the second quarter, underlines the company.
On the other hand, Repsol will continue its investment effort in the Iberian Peninsula in the coming years, where it will devote more than 40% of the total investments planned in its strategic plan for the period 2021-2025 (19,300 million euros). Thanks to this payment and with the objective of being net zero emissions by 2050, Repsol is transforming its activity by developing innovative projects in areas such as the circular economy, renewable fuels, hydrogen, capture and CO storage2 or renewable energy.
As for net debt, it ended the month of June at 5,031 million euros, ie 869 million less than at the end of the previous quarter. For its part, liquidity stood at 9,380 million euros, sufficient to cover 3.9 times the maturities of short-term debt.
“The effort what we are doing to continue to generate employment and investment for Spain, transforming ourselves and being zero emissions is remarkable. We assume that commitment responsibly, just as we contribute to society, helping our customers in a difficult time and at the same time, guarantee the supply. All this, despite the fact that the international context is uncertain and that we are just beginning to overcome a pandemic that is causing significant losses, ”adds Josu Jon Imaz, CEO of Repsol, in a note made public.