Spanish energy groups report quarterly profits leap

24th July 2014, Comments 0 comments

Spanish energy groups Repsol and Gas Natural reported big jumps in quarterly profits on Thursday, each boosted by income for assets sold or nationalised.

Repsol nearly doubled net profit, with an increase of 94.8 percent to 520 million euros ($701 million), in the second quarter from a year earlier.

This raised first-half profit by 47.3 percent to 1.3 billion euros.

The figures were boosted by a deal with Argentina over compensation for the nationalisation of its subsidiary, YP.

The deal concluded two years of conflict between the company and the Argentinian authorities, and sealed Repsol's withdrawal from the country in May with compensation of $6.3 billion (4.6 billion euros).

On a current-cost accounting basis, which strips out changes in the value of inventories and makes the results comparable with US oil company results, Repsol said net adjusted profit fell 2.7 percent to 390 million euros in the second quarter, and 0.3 percent to 922 million euros in the first half.

Profits were hit by unrest in Libya, which interrupted oil operations. Repsol said this was offset in part by new fields in Brazil, the United States, Peru, Bolivia, Trinidad and Tobago, and Russia.

Repsol also said it had discovered two big reserves of hydrocarbons in Russia.

Gross operating profit, a measure of underlying profit from operations, rose by 17.5 percent to 1.03 billion euros in the quarter but slipped 0.6 percent in the first half to 2.2 billion euros.

The group used funds from the compensation to pay an exceptional dividend in May of one euro per share, and also to reduce net debt by 55.4 percent to 2.39 billion euros.

Repsol signalled on Wednesday it would be interested in using that money for takeovers, adding it might be interested in Canadian oil company Talisman Energy.

- Telecom sale boosts Gas Natural -

Gas Natural said quarterly net profit jumped 43.6 percent from last year to 530 million euros, after it sold in June its telecom subsidiary to European investment fund Cinven for 510 million euros.

Sales were almost stable, slipping 0.2 percent to 5.87 billion euros.

But operating profit as measured by earnings before interest, tax, depreciation and amortisation (Ebitda) fell 1.2 percent to 1.197 billion euros.

For the first half of the year, net profit rose by 19.5 percent to 932 million euros, but Ebitda slipped by 3.0 percent to 2.4 billion euros.

The company suffered from new taxes by the Spanish government on energy production, which reduced the first-half Ebitda figure by 132 million euros, the company said.

A similar recent measure affecting gas could cost it another 45 million euros. Unfavourable exchange rates, notably the fall of the Brazilian real and Colombian peso against the euro, also hit income.

But Gas Natural said it was still focusing on Latin America for growth, after it cut investments in Spain by 14.0 percent while Latin America accounted for 29.0 percent of its overall investment effort.

© 2014 AFP

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