In the first quarter of 2023, Repsol, Spain’s largest oil company, reported a net profit of 969 million euros. This was a 12.9% decrease from the same period in the previous year. Despite this decline, Repsol’s adjusted result for operating performance was 1,267 million euros, a 33% decrease from the same period in 2022.
The company attributed this decline to the drop in fossil fuel prices, particularly natural gas, and lower refining margins. These factors have had a significant impact on Repsol’s recent financial performance. The shares of Repsol fell around 2% on the Ibex 35 index following these results.
Repsol’s net debt increased to 3,901 million euros due to various reasons such as dividend distribution, increased working capital and organic and external investments. Despite this increase in leverage, liquidity remains strong at 10,332 million euros, which covers nearly four times all short-term debt maturities.
The business segments within Repsol showed heterogeneity in their financial performance. The exploration and production of crude oil and gas recorded a profit of 442 million euros but this was lower than before due to 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 while the client segment achieved an adjusted profit of just 156 million euros which was slightly lower than before. Low-carbon generation and corporations also recorded negative figures amid challenges in the wholesale electricity market in Spain.
Investments by Repsol increased significantly in the first quarter to reach €2,129 million with renewable energy projects receiving half of this amount. The company has committed to investing between €16 billion – €19 billion between 2022 and 2027 with most allocated towards renewable energy projects on the Iberian Peninsula.”
