Repsol Lost $3.289 Billion In 2020, The Second Consecutive Year

2021-02-18   |   by CusiGO

Repsol energy lost 3.289 billion euros last year, compared with the loss of 3.816 billion euros in the previous fiscal year. The company argued that this was due to the fall in the price of international reference raw materials (Brent and WTI oil), which had a negative impact on Repsol’s inventory valuation. The estimated impact is 978 million. It also attributed the losses to the downward adjustment of $2911 million in exploration and production assets caused by the crisis. The company reported a net profit of 600 million euros to the national securities and Exchange Commission on Thursday, a measure of the company’s operating performance. This behavior is also reflected in the positive operating cash flow of all businesses, with the group’s cash flow of $3.197 billion.

The impact of the epidemic on oil prices and the collapse of demand caused Repsol to lose money for two consecutive years. The group was dissatisfied with the 35% drop in the average price of Brent crude oil to $15 a barrel in April and the 19% drop in the price of natural gas at Henry hub, giving priority to business continuity and ensuring the necessary supply.

In this regard, Repsol launched a resilience program on March 25 to strengthen cash generation and balance sheet. Supported by this plan, the company successfully reduced its net debt by 28%, by $1.178 billion to $3.042 billion. At December 31, liquidity was $9.195 billion, 3.23 times the short-term maturity. Coupled with the recovery in demand and prices, the adjusted net profit in the fourth quarter of this year was $404 million, very similar to the same period in 2019.

In addition, in 2020, Repsol strengthened its financial position by issuing five bonds totalling $3.85 billion, of which $1.5 billion were subordinated long-term bonds, which strengthened the group’s assets and liquidity. In all bonds issued, demand is several times the supply, which is a signal of interest to investors.

Repsol has launched several initiatives that, in addition to achieving its zero net emission commitment by 2050, will contribute to the country’s economic recovery, including two innovative industrial decarbonization projects to be installed in Bilbao and Spain’s first advanced biofuel plant It will be located in Cartagena; develop and launch renewable assets on the peninsula and expand the business internationally through a joint venture in Chile.

In this regard, Repsol put forward a strategic plan for 2021-2025 in November to “become a stronger, more profitable and more competitive company”. Energy and digital transformation and the defense of shareholders and customers are the core of its strategy. According to the plan, Repsol will make progress in achieving zero net emissions by 2050.

In addition to strengthening its traditional activities and considering decarbonization, the plan also regards renewable hydrogen investment as a clear growth carrier for Repsol, which plans to increase its power generation in the Iberian Peninsula to 400 MW by 2025 and to exceed 1.2 MW by 2030. At the end of January 2021, Repsol proposed the h24all project to develop the first 100 MW alkaline electrolysis unit in Europe, which will be connected to petronor refinery. Repsol leads a consortium of 15 entities that made financing requests in response to calls for green deals in Europe.

In addition, it already has 1.13 million electricity and gas users. The company currently has nearly 3300 MW of low emission power generation installed capacity and plans to increase its portfolio with the goal of becoming a global operator, generating 7.5 MW by 2025 and 15 MW by 2030.

Repsol’s board of directors held the next general meeting of shareholders at the headquarters of the company in Madrid on March 26, and the second meeting is expected to be held on March 26. The Board agreed to propose an additional gross dividend of EUR 0.30 per share from the profit of fy2020, to be paid with effect from July 7, 2021. It also agreed to propose another dividend, equivalent to the traditional instalments for the financial year 2021, of 0.30 Euro gross per share, which will take effect in January 2022.

In addition, it has agreed to launch a Buyback program to buy back up to 40494510 shares, or about 2.58% of the share capital, with the sole purpose of buying shares under the January 2021 dividend script, which, if approved, will be amortised. Put forward capital reduction proposals to the next general meeting of shareholders.

In addition, the Council agreed to nominate Manuel Manrique (President Sasser), Mariano Maggio, Isabel torremocha and Luis Suarez delezo for re-election as directors, approved Rene Dahan’s co election and re-election appointment, and appointed Aurora Kata as director after the end of Maite’s term. Barrest. Cat รก Sala is an independent director and chairman of the audit committee of atrismedia and the appointment and Compensation Committee of Sabadell bank. She is also president of Barcelona global and a member of the Executive Committee of IESE Alumni Association. From 2008 to 2020, she was a partner of Seeliger and Conde.