Repsol swings to loss over impairment

Repsol SA said Thursday that it swung to a loss for the fourth quarter, mainly due to an impairment in its upstream business.

The Spanish energy company booked a quarterly net loss of 5.28 billion euros ($5.70 billion), from a profit of EUR170 million in the year-earlier period.

The drop was attributed to an impairment of EUR4.85 billion in the accounting value of the company’s assets–mainly located in the U.S. and in Canada–due to new crude and gas price scenarios consistent with the Paris Agreement’s climate targets. Repsol said it also had a provision in relation to arbitration proceedings initiated by Addax Petroleum UK Ltd.

Last year, the company said it aimed to cut emissions to net zero by 2050, anticipating an impairment charge against its oil-and-gas assets.

On an adjusted basis, net income in the quarter fell to EUR405 million from EUR623 million in the year-earlier period.

Earnings before interest, taxes, depreciation and amortization in the period decreased 16% on year to EUR1.82 billion.

Repsol said upstream production in the fourth quarter reached an average of 730,000 barrels of oil equivalent a day. Adjusted income in upstream fell to EUR186 million on year, partly due to lower oil and gas prices.

In downstream, the company reported adjusted net income of EUR369 million in the fourth quarter, 24% lower on year, partly due weaker refining, chemical businesses.

In the full year, the company swung to a loss of EUR3.82 billion from a profit of EUR2.34 billion the year before. Adjusted net income was EUR2.04 billion in 2019 compared with EUR2.35 billion the previous year.

The company raised its dividend by 5% in 2019 and expects to reach EUR1 a share this year. It also said it plans to execute a 5% capital reduction and launch a new share-buyback program before the next annual general meeting in May.

Write to Giulia Petroni at [email protected]

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