Repsol Ups 1H Profits, Cuts Debt, Names Execs

Repsol has reported a strong profits increase and announced a restructuring of its management board, on the back of the departure of its long-serving CFO.

Net income for first half 2018 was up 46% at €1.546bn ($1.8bn), the Spanish producer announced July 26. Higher production volumes and prices were key factors, as they were in Shell and Total’s 2Q results.

Spain’s Repsol said this represents its highest 1H profit recorded in the last decade. Its adjusted net income, measuring business performance, increased by 12% to €1.132bn.

Net equity production was 6% higher year on year at 724,000 barrels of oil equivalent/day, with gas accounting for 63% versus liquids at 37%. The production rise was due to project start-ups at Trinidad’s 'Troc' and Algeria’s Reggane (both gas), plus the UK and Malaysia, and higher output in Libya and Norway. Indeed, upstream 2Q earnings were 91% higher year on year as a result of higher production, efficiency measures and rising international prices.

Downstream earnings – spanning oil through to gas & power (G&P) – were 18% lower year on year at €76mn helped by higher trading/G&P margins on sales into the northeast US during the January 2018 cold snap. Repsol’s corporate division made a 2Q loss of €253mn, similar to a year earlier.

Net debt year on year decreased by 64% to €2.7bn at end-June 2018. This was €4.13bn less than at end-March 2018 principally due to the €3.816bn proceeds from the sale of its long-held 20% stake in gas marketer Naturgy (formerly Gas Natural). Repsol has since embarked as a direct competitor of the latter.

Repsol also announced a management restructuring July 26, moving its former E&P chief Luis Cabra Duenas to head up an expanded technology unit, promoting its former Europe/Africa/Brazil upstream head Tomas Garcia Blanco to the top E&P job, and appointing Antonio Lorenzo Sierra as CFO who until now was director of strategy, control and resources. He replaces Miguel Martinez who is leaving Repsol after a decade on its board, mostly as CFO (since 2011), and leaves "with deep thanks” from the company’s chairman Antonio Brufau. Martinez had also served on Naturgy's board until 1Q2018.

The new management board will thus be:

- Antonio Brufau (chairman) and Josu Jon Imaz (CEO) – no change;

- Luis Cabra Dueñas (technology development, resources and sustainability)

- Begona Elices García (communication and chairman’s office)

- Tomas Garcia Blanco (exploration and production)

- Arturo Gonzalo Aizpiri (people and organisation)

- Miguel Klingenberg Calvo (legal)

- Antonio Lorenzo Sierra (CFO)

- Victoria Zingoni Domínguez (Downstream)