Repsol recorded a net loss of 3,289 million euros in 2020 after suffering from the global crisis of the Covid-19 impacts of almost 3,900 million euros in the valuation of its inventories and by the adjustment of the value of assets of ‘Upstream’ (Exploration and Production), informed the company.
In 2019, the group already recorded some losses of 3,816 million euros, although on that occasion it was due to the adjustments it made in the book value of some of its assets to address the commitment to be a company with zero net emissions in the year 2050.
Specifically, the unprecedented situation caused by the coronavirus, which led throughout the year to an almost unprecedented collapse in oil and gas prices – with a 35% drop in the average price of Brent crude in 2020 and a 19% drop in Henry Hub gas – and a Historic collapse in demand, has had a negative impact of 978 million euros on the company’s inventories.
In addition, the group chaired by Antonio Brufau has adjusted its price assumptions, which has affected the book value of its ‘Upstream’ assets, reflecting an impact of 2,911 million euros.
However, despite a scenario marked by unprecedented complexity due to the global pandemic of the coronavirus, Repsol obtained in 2020 an adjusted net result, which specifically measures the performance of the company’s business, of 600 million euros.
This adjusted net income, although it is a 70% lower than the 2,042 million euros in 2019, improves analysts’ forecasts for the company and confirms the resilience of the multi-energy company in a particularly difficult environment for its sector.
In fact, the crisis of Covid-19 has been primed with oil companies in 2020, with strong net losses for large companies in the sector such as Shell (-17,903 million euros), BP (-16,765 million euros), Total (-5,980 million euros) or Equinor (- 4,539 million euros).
THE FOURTH QUARTER CONFIRMS THAT IT LEAVES THE WORST OF THE PANDEMIC BEHIND
In the fourth quarter, hand in hand with the measures implemented to deal with the Covid-19 crisis, after the launch in March of a Resilience Plan, as well as the beginning of the recovery of demand and product prices, Repsol its adjusted net profit was € 404 million, a figure similar to the same period in 2019.
The CEO of Repsol, Josu Jon Imaz, highlighted that in 2020, year also in which the company launched its new Strategic Plan 2021-2025, the group has faced “an unprecedented scenario and has laid the foundations for the future of the company”.
“We have once again demonstrated the strength of our project, played an essential public service role and confirmed once again that we are a useful company for society,” he said.
POSITIVE FREE CASH GENERATION OF 1,979 MILLION
In addition, the group demonstrated its strength in the face of this difficult scenario, with a positive generation of free cash from 1,979 million of euros and a reduction in net debt of 28% -in 1,178 million euros during the year- to stand at 3,042 million euros at the end of 2020.
He also highlighted the company’s commitment to digitization, which has contributed 334 million euros and it is expected that the positive impact of digitization projects will exceed 800 million euros per year in 2022 compared to the start of the Digitization Program, in 2018.
The group’s liquidity stood at 9,195 million euros at December 31, which covers 3.23 times short-term maturities. In this sense, Repsol strengthened its financial position last year through five bond issues for a total of 3,850 million euros, of which 1,500 million correspond to subordinated perpetual bonds.
DECREASES YOUR CARBON INTENSITY INDICATOR BY 5%
On the other hand, during 2020 Repsol decreased its Carbon Intensity Indicator by 5% compared to 2016 levels. If the lower activity derived from the Covid-19, the reduction was 3.7%.
The company has eliminated 2.4 million tonnes of C02 since 2014 and has set more ambitious targets in its strategic plan, which sets a 12% decrease in carbon intensity by 2025, 25% for 2030 and 50% for 2040. By business areas, Commercial and Renewables stood out, which obtained a result of 485 million.
Repsol continued to see its number of customers grow for its Waylet digital application, closing with more than two million registered, and already has 1.13 million Electricity and Gas customers and almost 3,300 megawatts (MW) of total installed generation capacity. low carbon.
For its part, Exploración y Producción obtained a result of 195 million euros in 2020, improving already in the fourth quarter the result obtained in the same period of the previous year. The group implemented cost reduction measures and redefined asset exploitation plans to cope with the drop in hydrocarbon prices.
Average production reached 648,000 barrels of oil equivalent per day, in line with the new strategic plan, which prioritizes value over volume, and nine surveys were completed, seven of them with positive results, a figure that represents the most highest number of commercial wells discovered in a single year by the company in its entire history.
Meanwhile, the Industrial area recorded a result of 297 million euros due to lower activity and the fall in refining margins. In this sense, the company continued to evolve to transform its facilities into multi-energy hubs capable of generating products with a low, zero or even negative carbon footprint and of promoting new business models based on digitization and technology.
MEETING ON MARCH 26 AND COMPLEMENTARY DIVIDEND OF 0.30 EUROS
On the other hand, the board of directors of Repsol has called a General Shareholders’ Meeting for next March 26, in which the payment – next July – of a complementary dividend of 0.30 euros gross per share will be proposed, charged to the profits of the year 2020.
Likewise, it will be submitted to the shareholders at the Meeting, in which, given the exceptional conditions by Covid-19, telematic participation is recommended, the distribution of another dividend, similar to the traditional payment on account of the year 2021, of 0 , 30 euros gross per share, the distribution of which will be effective throughout the month of January 2022, on the date on which the board of directors specifies.
In addition, Repsol has agreed to launch a program for the repurchase of treasury shares for a maximum of 40,494,510 shares, representing approximately 2.58% of the capital stock, with the sole purpose of acquiring the shares corresponding to the ‘scrip dividend’ of last January, which will be amortized in the event that the capital reduction that will be proposed to the Shareholders’ Meeting is approved.
The re-election as directors of the Board will also be submitted to the Board. Manuel Manrique, Mariano March, Isabel Torremocha, Luis Suárez de Lezo and the ratification of the appointment by co-option and re-election as director of Rene Dahan.
Likewise, it has agreed to propose the appointment as director of Aurora Catá, after the end of the mandate of Maite Ballester. Catá, president of Barcelona Global and member of the Executive Committee of the IESE Alumni Association, is an independent director and president of the Audit Committee of Atresmedia, and an independent director and president of the Bank’s Appointments and Remuneration committees Sabadell.
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