REPYY Repsol SA (QX)

By Ana García Ruiz and Carlos López Perea 

MADRID--Repsol SA said Thursday its first-quarter net profit fell by almost half as falling energy prices hit Spain's largest oil company.

Repsol said net profit in the first quarter was EUR434 million ($498.7 million), down 43% from a year earlier.

The oil producer said net adjusted profit, which excludes gains or losses in the value of inventories and one-off items, fell 38% to EUR572 million in the three months to March from EUR928 million a year earlier. Net profit in the first quarter of 2015, Repsol said, had been boosted when the company received compensation from Argentina's government for its nationalization of Repsol unit YPF SA.

Despite the drop, the company's net adjusted profit was higher than analysts had been anticipating, helping to push Repsol's shares up around 5% in morning trading in Madrid.

Repsol reported stronger-than-expected results due to lower exploration costs as well as a tax credit related to currency fluctuations in Brazil, Oswald Clint, a Sanford C. Bernstein oil-industry analyst, wrote in a research note on Thursday.

Earnings before interest, taxes, depreciation and amortization, known as Ebitda, rose 6.7% in the first quarter to EUR1.03 billion, compared with the first quarter of 2015.

Repsol's net debt was EUR12 billion in the first quarter of this year, well above the EUR126 million reported a year earlier. Repsol's purchase of Talisman Energy has swelled the company's debt load.

Net debt was slightly higher compared with the fourth quarter.

"Repsol keeps making good progress achieving the synergies they promised post the Talisman integration," Mr. Clint wrote. However, he added, the company's balance sheet remains "stretched."

Average prices of Brent, the global benchmark for oil, fell to a 12-year low of $26.21 on Feb. 11, Repsol highlighted in a regulatory filing. The average Brent price was $33.90 a barrel during the first quarter of this year, 37% less than the first quarter of 2015, the company added.

Repsol has stepped up cost-cutting efforts in recent quarters as the price of oil has tumbled. In February, Repsol lowered its dividend to save cash after reporting a EUR2 billion loss in the fourth quarter of 2015.

(END) Dow Jones Newswires

May 05, 2016 04:34 ET (08:34 GMT)

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