Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on REPSOL SA. We currently have 13 research reports from 3 professional analysts.
Frequency of research reports
Research reports on
GMP FirstEnergy ― UK Energy morning research package
08 Dec 16
Madalena Energy (MVN CN) (not covered): Transaction in Argentina | Tag Oil (TAO CN); BUY, C$1.25: successfully tests Cardiff and Supplejack in New Zealand | LEKOIL (LEK LN) (not covered): Otakikpo Production Update in Nigeria | LEKOIL (LEK LN) (not covered): Otakikpo Production Update in Nigeria
First view: small miss on earnings, more cost cutting
03 Nov 16
The company report an adjusted net income of €307m vs. €320m expected. By business units: 1) Upstream’s adjusted net income was a loss of €28m, much better than a year ago (€-395m) but lower than the €5m loss expected. Production was up 3%. 2) Downstream’s adjusted net income was €395m, down 42% yoy vs. €385m expected. The lower refining margin decreased operating income by €289m, Chemicals generated a negative effect of €45m in the operating income while Trading’s and Gas&Power’s operating income had a €24m negative impact. The group also benefited from the sale of its stake in Gas Natural. Special items in Q3 16 included a net gain of €180m, mainly due to the sale of a 10% stake in Gas Natural SDG and a partial sale of the piped LPG business offset by the impacts of currency devaluation in Venezuela and rig stand-by costs. The group’s net debt at the end of Q3 16 stood at €9.9bn, €1.7bn lower than in Q2 16 thanks to divestments in the quarter, and good cash flow from operations.
More cost reductions and good operational performance
22 Aug 16
We come back to the Q2 16 results published at the end of July. At that time, as a reminder, the group reported an adjusted net income of €345m for Q2 16, up 11% yoy, perfectly in line with the market’s expectations, but above our own estimates (10% below consensus on cautious synergies and costs). Upstream In the upstream division, adjusted net income was €46m vs a loss of €48m a year ago, mainly due to lower exploration expenses (+€144m), higher volumes (+€290m) thanks to acquired assets and a positive tax effect from the appreciation of local currencies. Lower crude oil had a –€372m impact compared to last year. Average production was 687kbpd, up 33% yoy, due to a full quarter of volumes from acquired assets vs. a partial contribution last year. It was also helped by the ramp-up of Cardon in Venezuela, Sapinhoa in Brazil and the contribution from Gudrun in Norway. Some maintenance work and temporary suspensions due to low prices explained the 2% decrease vs. Q1 16. In terms of production, in Brazil, the hook-up of the FPSO at Lapa (break-even close to $55/bbl) has been concluded and first oil is expected to come one quarter ahead of schedule. In the UK, the rising costs with capex and opex are below plan and production is ahead of schedule. In North America, production at Marcellus has increased yoy, while reducing drilling activity to one rig with a cash break-even close to $2/mmbtu. In Venezuela, the teams are working to solve the issue with the escrow account in order to make the JV work financially. Downstream In downstream, adjusted net income was down 14% yoy to €378m on lower volumes produced, lower margins and maintenance in the refining system (-€224m). On the positive side, Chemicals, Marketing and the LPG businesses improved. The schedule of maintenance stoppages at Cartagena and Tarragona were completed on time and on budget. The planned outages reduced the group’s distillation and conversion utilisation during the quarter. The group achieved an actual refining margin of $0.6, $0.1 over an indicator. The group has completed its major maintenance programme for 2016 and expects its actual margin to recapture the full benefit of its industry-leading facilities in the second half of the year. In Chemicals, sales have again been strong and the margin should remain high for the rest of the year. Spanish motor fuel demand maintained its recovery and the market has grown by 3.6% yoy up to the end of May. Gas Natural Fenosa The adjusted net income at Gas Natural Fenosa stood at €96m, down 9% yoy due to lower profits from gas commercialisation, attributable to the current price environment. Cash flow and debt Cash flow from operations was €1.8bn and covered net investment, interest and dividend payments in the first half of the year. Net debt is slightly down compared to Q1 16, from €12bn to €11.7bn. The group’s liquidity at the end of the H1 16 was €6.7bn including drawdown credit lines which represent 1.8x the coverage of short-term maturities. Change in working capital so far in 2016 is €723m, which also explains the small decrease in debt.
First view: in line with the consensus, better cost cutting, resilient Refining
28 Jul 16
The group reported an adjusted net income of €345m for Q2 16, up 11% yoy, perfectly in line with the market’s expectations. In the upstream division, adjusted net income was €46m vs a loss of €48m a year ago, mainly due to lower exploration expenses, higher volumes thanks to acquired assets and a positive tax effect from the appreciation of local currencies. Production averaged 697kbpd, up 33% yoy. The ramp-up from Cardon IV in Venezuela and Sapinhoa in Brazil, plus Gudrun in Norway and better production in Peru all helped. In the downstream, adjusted net income was down 14% yoy to €378m on lower volumes produced, lower margin and maintenance in the refining system. On the positive side, Chemicals, Marketing and LPG businesses improved. The adjusted net income at Gas Natural Fenosa stood at €96m, down 9% yoy due to lower profits from gas commercialisation. Cash flow from operations was €1.8bn and covered net investment, interest and dividend payment in the first half of the year. Net debt is slightly down compared to Q1 16, from €12bn to €11.7bn.
Talisman starts to deliver; refining still key
14 Mar 16
The group had already discussed its Q4 15 figures at the end of January 2016. Here we bring more colour to the details. Adjusted income in Q4 15 came in at €461m, up 25% yoy, leading to €1.86bn for the full year. Non-recurring was of €2.39bn, largely due to impairments, mostly in the Upstream business (partially offset by a gain from the Talisman bonds amounting to €155m after taxes). By division 1) E&P In the E&P division, the group reported an adjusted net loss of €276m, leading to a loss of €909m for the full-year 2015. Production came in at 697kbpd, up 88% yoy (thanks to Talisman accounting for 318kbpd), with liquids accounting for 35% of the production. Brazilian production was 45kbpd. Libya is still a worry. In January 2016, production averaged 714kbpd. Operating income in the division was -€488m. The factors explaining this yoy performance are: - Lower energy prices: €-307m - Income tax expenses: +€132m (due to lower results) - Exploration expenses: +€89m (lower amortisation and lower seismic expenses) - Higher production: +€11m, despite Libya (-€74m) Operating income of Talisman’s assets was -€208m, and -€115m for the adjusted net income. 2) Downstream In Downstream, the group reported €495m of adjusted income, leading to adjusted net income of €2.15bn for the full year. THe refining margin was $7.3/bbl, compared to $8.8/bbl in Q3 15, but still up on a yoy basis ($5.5/bbl in Q4 14). Enhanced performance in the trading business also helped, even if the effects were partially offset by lower results in the Gas & Power business. The utilisation ratio came in at 89.3%. Operating income in the division was €705m. The factors explaining the operating income yoy performance are: - Higher utilisation and better margin: +€69m - Increased efficiency in chemicals (better international environment): +€65m - FX rate effect: +€71m 3) Gas Natural Fenosa Adjusted net income of Gas Natural Fenosa stood at €123m, 84% higher yoy, mainly due to the contribution of CGE-Chile and the impairment booked in the Q4 14. For the full year, Gas Natural Fenosa’s results came in at €453m. Cash flow Net debt was €11.9bn, down €1bn compared to Q3 15. Cash flow from operations was €2.35bn. The board approved the proposed “Repsol Flexible dividend” programme. With a dividend of €0.3/share and a scrip dividend option, this represents a 40% reduction in the complementary dividend to be paid in June. Overall, this represents a 20% cut in the dividend (at €0.77/share vs. €0.96/share a year ago). Capex is to be reduced to €3.9bn in 2016.
Repsol's answer is clear and strong: adapt to very low oil prices
28 Jan 16
Repsol announced some figures ahead of its official results publication (25/02). The group suffered a net loss of €1.2bn for 2015 after one-off charges of €2.9bn. On an adjusted base, net profit was €1.85bn, 10% above our figures, driven in our view by refining and strong cost cutting on Talisman. Also, the group will reduce capex in 2016 by another 20% to $4bn and increase savings of €1.1bn, of which more than 50% is planned by 2018. Annual savings from the integration of Talisman should be close to $400m, compared with the $220m initially forecast. The company’s Board signed off on the revised strategy at a meeting on Wednesday.
08 Dec 16
Elderstreet stake acquired 02 GENERAL NEWS Globalworth premium In this issue Venture capital firm Draper Esprit has taken a 30.8% stake in venture capital trust manager Elderstreet. Both investment managers focus on the technology sector and they will be able to co-invest. Elderstreet has investments in a number of AIM-quoted companies through its VCTs. The purchase was funded by an issue of Draper Esprit shares worth just over £250,000. Simon Cook, the chief executive of Draper Esprit, is a former partner at Elderstreet so he knows the business and the people who run it, although he did leave more than 14 years ago. Cook has previously acquired portfolios from 3i and Cazenove, two other firms where he has worked. Draper Esprit has an option to acquire the remaining shares in Elderstreet, which has more than £25m under management. Adding Elderstreet to the group enables Draper Esprit to offer investors a range of EIS funds, VCTs and an ISA qualifying listed evergreen patient capital fund. The enlarged group has venture capital assets under management of more than £350m. At the end of September 2016, Draper Esprit had a net asset value of 352p a share, which is similar to the current share price. The June 2016 flotation price was 300p a share. Draper Esprit is quoted on Ireland’s Enterprise Securities Market as well as AIM.
01 Nov 16
Since our last outlook note, Quadrise has begun to supply MSAR for extended LONO sea trials, paving the way for commercial adoption from calendar H217 onwards. In August it signed a memorandum of understanding with clients in the Kingdom of Saudi Arabia (KSA), which is a key enabler for progressing the production-to-combustion pilot there. In October it completed a placing and open offer raising a total of £5.25m (gross). This should enable it to transition comfortably to the commercial phase on successful completion of the LONO and KSA trials.
Dividends reinstated; is it time to turn (more) optimistic?
08 Dec 16
Glencore continues to surprise the markets, earlier with its fast pace of asset disposals and now with the reinstatement of dividends. The following were the key details shared with investors in a meeting held on 1 December 2016: 1/ completed $6.3bn of asset disposals; 2/ reduced net debt (including readily marketable inventories) by $12.5bn over the last 18 months; 3/ reiterated trading’s 2016 EBIT guidance towards the upper end of the $2.5-2.7bn range; 4/ expects healthy annualised 2016 free cash flows – even at Q1 16 commodity price lows; at 2017 forward prices, FCFs are guided to be $6.5bn; 5/ dividends would be reinstated from 2017 – with $1bn to be paid in two equal tranches in H1 and H2; thereafter (i.e. 2018 onwards), $1bn would be a fixed annual dividend payment (banking on the stability of trading’s cash flows) plus a minimum 25% of FCFs from industrial activities. Production guided to grow Source – Investor Presentation December 2016 While copper would be negatively impacted by the end-of-life impact at Alumbera and the Ernest Henry divestment, the output for all other commodities is guided to be higher (in varying degrees).
Raising Target Price to 2,500p per share
01 Nov 16
Royal Dutch reported clean EPS of US$0.35, nearly 50% ahead of consensus. More importantly, cash flow jumped QoQ to US$8.5bn which should go a long way to confirming Shell’s capacity to maintain the current dividend, despite the increase in gearing to 29.2%. Upstream returned to profitability on an underlying basis for the first time since 1Q15. We believe these results confirm our view that Shell’s dividend can and will be maintained at US$0.47 per quarter and we increase our Target Price to 2,500p per share, given further sterling weakness.