Repsol Posts 88% Increase in 3Q Profit, Analysts Reveal 'Mixed' Reactions
Spanish oil firm Repsol S.A posted an 88 percent increase in third quarter net profit, compared to the same period last year, according to the company’s latest financial update.
Repsol’s adjusted net income in 3Q was $671 million (EUR 576 million), up from the $577.9 million (EUR 496 million) posted in the last quarter and the $357.7 million (EUR 307 million) registered in 3Q 2016.
In upstream, adjusted net income was $172 million (EUR 148 million), $205 million (EUR €176 million) higher than in the same period last year, mainly due to higher realized oil and gas prices, resumption of production in Libya and lower exploration expenses.
In downstream, adjusted net income was $584.9 million (EUR 502 million), 27 percent higher year-on-year, as a consequence of higher margins and higher distillation utilization in refining in Spain and Peru, as well as higher sales in chemicals, better results in trading, higher contribution from the marketing business and better performance in the LPG business.
The company’s net debt at the end of the quarter stood at $8.12 billion (EUR €6.97 billion), $588 million (EUR €505 million) lower than at the end of the second quarter of 2017.
Oil and gas analysts at investment banking firm Jefferies said their initial reaction to Repsol’s 3Q update was ‘mixed’.
“We believe a stronger downstream result would have carried more weight,” the analysts said in a brief research note sent to Rigzone.
“Net debt sub-EUR 7 billion is a positive, and sooner than expected, but we increasingly feel this is coming at a cost to upstream investment levels,” they added.
Earlier this week, both Royal Dutch Shell plc and BP plc reported improvements in their latest financial updates.
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