Spanish oil and gas company Repsol shattered forecasts with a stronger first quarter profit powered by its trading business.
Repsol posted a net income of €1.112 billion ($1.227 billion) for the first quarter of 2023, improving on a net income of just over €1 billion in the corresponding quarter of 2022.
Josu Jon Imaz, chief executive of the company, called the results solid.
Analysts at Redburn said adjusted net income was 26% clear of consensus, while analysts at Barclays placed the beat at 30%
Barclays analysts said result from gas trading were better than forecast, while there was an even larger beat on cash flow helped by lower than expected cash taxes.
“Refining margins are now falling, and we expect the attention of the market to turn towards the rate of buybacks,” Barclays analysts said in a post-results note to clients.
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Upstream results were also ahead of forecasts, with adjusted net income of €474 million, trumping the €454 million consensus, according to Redburn.
The company said progress in developing its integrated business model was key to achieving this result “in a quarter in which crude oil prices fell by an average of 20%, compared to the same period the previous year”.
Repsol said it invested €1.726 billion during the quarter — mainly in Spain and the US — and expects 35% of investments in 2023 to be allocated to low-carbon projects.
Repsol’s hydrocarbons production averaged 608,000 barrels of oil equivalent per day in the first quarter, up 9% from the same period of 2022.
Imaz stated: “Our integrated business model, as well as the fulfillment and ambition of our strategic plan, are key to delivering solid results. At the same time, we continue to raise our multi-energy profile and make progress in decarbonisation.