By Pietro Lombardi
MADRID (Reuters) -Repsol Chief Executive Josu Jon Imaz on Thursday pledged to distribute at least 2.4 billion euros ($2.65 billion) to shareholders this year, including via a new share buyback in the summer.
Shareholders will receive 30% of the cash flow generated by Repsol’s operations, representing the upper end of the 25%-30% distribution range the company had previously targeted, Imaz said in a call with analysts following the release of first-quarter results.
Repsol, which like other European energy companies last year benefited from high oil and gas prices, is now facing much lower prices, which have already taken a toll in the first three months of the year.
The company warned that the uncertain economic outlook was weighing on crude and natural gas prices, with crude oil prices falling by an average of 20% compared with the first quarter of last year.
But despite the fall in oil and gas prices, Repsol’s overall performance was well above market expectations, Renta 4 Banco analyst Alfonso Batalla told Reuters.
“Results are better than expected across the board, and in particular on adjusted base, which is a key metric for Repsol,” Batalla said, adding: “That’s why it is difficult to understand the market reaction”.
Repsol’s shares were down around 3.2%.
Batalla said the share price drop may reflect market disappointment that Repsol had not announced more ambitious 2025 targets.
Imaz confirmed that the energy giant expects a cash flow from operations of around 8 billion euros this year.
On an adjusted base, Repsol booked a quarterly profit of 1.89 billion euros ($2.09 billion), up from 1.06 billion a year earlier and above an average market forecast of 1.51 billion provided by the company.
Unadjusted net profit fell 20% to 1.11 billion euros.
The sale of a 25% stake in its oil and gas exploration division helped Repsol cut its net debt, which stood at 2.26 billion euros at the end of last year, to 880 million euros at the end of March.
($1 = 0.9055 euros)
(Reporting by Pietro Lombardi, editing by Inti Landauro and Jane Merriman)
