Repsol’s profit rises 14.5% in June as it looks to grow in the US

The Spanish energy company Repsol is negotiating to expand its stake in Hecaty Energy as part of its strategy to increase its presence in the renewable energy sector in the United States.

The Spanish giant is in talks with Hecate Holdings, which owns 60% of the American renewable energy company Hecate Energy, in which the Spanish oil company has 40%, to buy its stake, it reported to the National Securities Market Commission (CNMV) on Wednesday.

As part of this expansion strategy in the United States, Repsol Last March, it acquired the renewable energy company for US$ 796 million (733.4 million euros). ConnectGenwith a 20 gigawatt (GW) project portfolio and development capabilities.

According to Repsol, with this operation it has strengthened its position in the renewable energy sector and increased its contribution to the objective of reaching between 9 and 10 GW installed by 2027.

The company is also not ruling out a merger or other operations to improve its business in the North Sea, its CEO admitted today. Joshua Jon Imaz.

Repsol earns more until June

Repsol posted a net profit of €1.626 billion through June (US$1.756 billion), 14.5% more than in the same period in 2023, which was marked by falling demand and the stabilization of raw material prices after they became significantly more expensive due to the war in Ukraine.

According to a report to the Spanish stock market regulator, adjusted net profit, which specifically measures business performance, fell 21.8% to €2.126 billion (US$2.296 billion), due to low gas prices and lower refining margins, according to a report released on Wednesday to the National Securities Market Commission (CNMV).

Gross operating profit (EBITDA) fell by 3.7% to €4.144 billion (US$4.475 billion), while adjusted EBITDA fell by 14.5% to €4.259 billion (US$4.600 billion).

During the semester, the price of Brent crude oil, the benchmark in Europe, has been on an upward trend, reaching an average of US$84.1 per barrel, 5.5% higher than in the previous year.

In contrast, the average Henry Hub gas price fell by 26.1% compared to 2023, to US$ 2.1 per MBtu, and prices were recorded “very depressed” of electricity in Spain.

Repsol also announced the repurchase and amortization of 20 million shares, in addition to the 40 million already amortized during this year, seeking to support shareholder remuneration through increased earnings per share.

Since 2022, the company has redeemed 350 million shares, or 22.9% of the share capital as of December 31, 2021.

Evolution by segments

In this context, Repsol’s Exploration and Production area, among others, achieved an average production of 589,000 barrels of oil equivalent per day between January and June.

Adjusted earnings for this segment fell by 1.7% to €869 million (US$939 million) in the period, due to lower gas realization prices, higher amortization, higher production costs and the divestment of all productive assets in Canada.

In Industrial, it fell to 1,019 million euros (US$ 1,100 million), 37.2% less, due to the lower performance in Refining, Repsol Peru, Wholesale and Gas Trading and Trading, which was partially balanced thanks to higher results in chemicals.

In the Client segment, the first half of the year closed with an adjusted result of 314 million euros (US$ 339 million, 2.5% less, due to lower results in Mobility and LPG, which were partially offset by the Marketing of Electricity and Gas and Lubricants, Asphalts, Aviation and Specialties.