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Sunday, 20 July, 2008, 02:50 GMT | more prices >>

Repsol bottom line takes a dip



By Upstream staff 

Spanish producer Repsol YPF booked 2007 adjusted net profit of €2.96 billion ($4.47 billion), a dip of about 4.4% on its 2006 numbers, but said it will invest tens of billions of euros over the next five years to boost profit growth.

Chairman Antonio Brufau, presenting the company's 2008-2012 strategic plan, said Repsol will invest €32.8 billion ($50 billion) to boost profit by 2.8 times by 2012.

In 2007, Repsol's net income, adjusted to remove non-recurring items, was €2.96 billion which matched market expectations and showed expected gains in refining profits and a dip in upstream income.

"We're going to invest €21 billion in our core business and, because of that, our operating profit in those business lines will double (by 2012)," Brufau told analysts on a conference call.

Brufau said operating income would rise 2.1 times and earnings before interest, tax, depreciation and amortisation by 1.8 times.

Repsol said it expected production to rise more than 5% a year and a reserve replacement ratio of more than 125%.

"About 25% of growth in net income will come from capital expenditure and improving our existing assets and 75% will come from new projects," said Brufau adding that, because of this, Repsol would not contemplate acquisitions during the strategic plan.

Repsol said its 2007 adjusted operating profit dropped 5% year-on-year to €5.49 billion, after production fell by nearly 8%.

A Reuters poll of 10 analysts had forecast Repsol would make net profit of €2.91 billion and EBIT of €5.44 billion.

Adjusted operating profit in downstream refining and marketing rose nearly 13% because of higher margins but, in upstream, adjusted operating profit fell by 15% due to lower production, higher costs and foreign exchange rates.

Adjusted profit in the gas and electricity division was 24% higher, boosted by income from Gas Natural of which Repsol owns nearly 31%.

The company has been mentioned as a possible player in the much-rumoured consolidation of the Spanish energy sector because of its stake in Gas Natural, but has denied any connections with builder ACS , which owns chunks of power outfits Union Fenosa and Iberdrola .

Thursday, 28 February, 2008, 07:57 GMT  | last updated: Thursday, 28 February, 2008, 13:21 GMT

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