Release Date: April 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Repsol SA (REPYF, Financial) achieved a 1% increase in adjusted income over the fourth quarter of 2024, reaching EUR651 million.
- The company successfully implemented its first buyback program of 2025, aiming to reduce share capital by EUR350 million before the end of July.
- Repsol SA (REPYF) completed its fifth asset rotation in Spain and validated its growth strategy in the US with its first rotation there.
- The strategic agreement to merge UK North Sea assets aims to create one of the largest operators in the region, enhancing scale, efficiency, and growth prospects.
- Repsol SA (REPYF) confirmed the payment of EUR0.5 per share as a second dividend of 2025 and announced another EUR0.5 per share for January 2026.
Negative Points
- The first quarter of 2025 was marked by significant volatility due to OPEC production policies, US tariffs, and geopolitical tensions.
- Oil prices turned towards the lowest point in four years, deteriorating the refining environment.
- Net debt increased by EUR0.8 billion since December, driven by a seasonal increase in working capital and shareholder remuneration.
- Production averaged 550,000 barrels equivalent per day, 3% lower quarter over quarter due to divestments, natural decline, and maintenance activity.
- The industrial division's first quarter adjusted income was EUR131 million, significantly lower than the first quarter of 2024, mainly due to a lower contribution from refining.
Q & A Highlights
Q: Can you elaborate on the EUR0.5 billion CapEx flexibility mentioned in the stress scenario?
A: Josu Jon Imaz San Miguel, CEO, explained that the EUR0.5 billion CapEx flexibility primarily involves delaying FIDs of renewable projects and reducing investments in the industrial area. This includes EUR200 million from renewables, EUR150 million from industrial transformations, and EUR50 million from commercial businesses. The focus remains on maintaining strategic projects like Leon Castile and Pikka.
Q: What is the impact of the recent power cuts in Spain on Repsol's operations and the sentiment towards renewables?
A: Josu Jon Imaz San Miguel, CEO, stated that the power cuts had an immediate impact, causing a temporary shutdown of refineries. However, operations resumed quickly with minimal long-term effects. He emphasized that renewable generation remains a crucial part of Spain's energy system, and investigations are ongoing to determine the root cause of the power cuts.
Q: How does the US tariffs scenario affect Repsol's developments in the US?
A: Josu Jon Imaz San Miguel, CEO, noted that while the current US government emphasizes secure and affordable energy, the volatile scenario around tariffs creates uncertainty. For projects with FID, tariffs are not a significant concern, but for new projects, Repsol prefers to wait for clarity before making investment commitments.
Q: Can you provide details on the hedging strategy for US gas prices for 2025 and 2026?
A: Josu Jon Imaz San Miguel, CEO, explained that for 2025, 55% of gas volumes are hedged with a zero-cost collar at $3-$6.1. For 2026, nearly 60% is hedged, with 75% at $3.2-$5.1 and 25% at $3.5-$11.7. For 2027, 12% is hedged with a collar at $3-$5.75.
Q: What is the guidance on production for 2025, considering the current production rate and upcoming startups?
A: Josu Jon Imaz San Miguel, CEO, maintained the guidance of 530,000-550,000 barrels per day for 2025, expecting to be at the higher end of the range. He highlighted upcoming startups like Leon Castile and Pikka, which will contribute to production increases.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
