Spain’s Repsol hit by losses on lower oil prices
Spanish oil giant Repsol said Thursday it swung into the red in the third quarter due to lower oil prices and one-off provisions caused by its decline in North America.
The company posted a net loss of 221 million euros ($237 million) in the July-September period, compared with a net profit of 319 million euros in the same year-ago period.
An analyst consensus forecast compiled by Factset had anticipated a net profit of 246 million euros.
Repsol said its earnings had been hit by “significantly lower crude oil prices” as well as one-off charges related to the declining value of the company’s North American gas-and-power division that were only partly offset by extraordinary gains from asset sales.
The company said crude oil prices had fallen by an average of 50 percent so far this year.
For the first nine months of the year Repsol posted a net profit of 1.4 billion euros, a 5.0 percent increase over the same period in 2014.
Like most oil majors, Repsol has slashed investment in exploration and production and is seeking to sell assets to help preserve dividends and pay back debt as the industry prepares for the possibility that oil prices will remain depressed for much longer than had originally been anticipated.
The company last month unveiled a five-year plan to sell 6.2 billion euros of non-strategic assets and cut investments by as much as 38 percent.
The announcement was part of Repsol’s plan to reorganise its activities following its $8.3 billion takeover of Canadian rival Talisman.
The deal, completed in May, boosted Repsol’s production but swelled its borrowing. Analysts have warned that without a debt reduction plan ratings agencies could downgrade the firm’s credit rating.