Repsol obtained a profit of 2,499 million euros in 2021, the largest since 2010, thus closing the crisis due to the pandemic, which led it to reap losses of 3,289 million in 2020. The oil company thus recovers its pre-Covid levels, driven by its model integrated business and thanks to the rise in oil prices.
The group chaired by Antonio Brufau thus leaves behind the ‘red numbers’ of the previous two years, marked by the millionaire impairments that it recognized in 2019 to lay the foundations for the new strategy to be a carbon neutral company in 2050 and by the impact of the coronavirus crisis. To go back to a higher profit figure, you have to go back to 2010, when it obtained millionaire capital gains from the sale of its business in Brazil to China’s Sinopec.
Last year, the adjusted net result, which measures the performance of the businesses, reached 2,454 million, compared to 600 million the previous year, also exceeding the 2,042 million obtained in 2019, the year prior to the Covid-19 crisis . The company highlights its performance in the last part of the year, with an adjusted net result of 872 million in the last quarter.
Regarding debt, Repsol reduced it by more than 1,000 million, 15% compared to 2020, standing at the end of 2021 at 5,762 million.
This solid financial position, together with the good behavior and the improvement in the price environment for raw materials, have allowed Repsol to improve the remuneration of its shareholders. The group is going to propose raising the cash dividend by 5% to 0.63 euros per share this year. The proposal will be submitted for approval at the next General Shareholders’ Meeting, together with a reduction in share capital of 75 million shares, equivalent to 4.91%
Repsol thus closes the first year of its 2021-2025 strategic plan, launched in November 2020 in the midst of Covid-19, reaching pre-pandemic levels, both in results and in cash generation from businesses, which has allowed this reduction of the net debt and the promotion of its commitment to renewable energies.
The group’s CEO, Josu Jon Imaz, highlighted in a note that these results “show the fulfillment and effectiveness of the axes of our 2021-2025 Strategic Plan in its first year of validity”, further reinforcing “a solid financial position accompanied by our commitment to increase shareholder remuneration, our commitment to the industry as a vehicle for energy transition and our progress in the ambition of being a carbon neutral company in 2050”.
The group’s operating cash generation reached 5,453 million, 70% more, driven by a gross operating result (Ebitda) that increased significantly in all businesses to stand at 8,170 million. Free cash flow increased by 43%, to 2,839 million euros, thanks to the performance of the Exploration and Production (‘upstream’) business. During the year, Repsol increased its investments by 30%, to 2,994 million, of which 829 million were allocated to the Commercial and Renewables business.
The group’s leverage level (net debt/capital employed) stands at 20%, improving the target set in its strategic plan. Liquidity at the end of the year amounted to 10,606 million euros, enough to cover 2.95 times the maturities of short-term debt.
By business, the Exploration and Production area obtained a result of 1,687 million euros in 2021, well above the 195 million of the previous year, supported by the recovery of international reference raw material prices. The Industrial area obtained a result of 606 million, doubling the figure for the same period in 2020, when it stood at 297 million. The Commercial and Renewables area obtained a result of 542 million, 11% higher than the 485 million registered in 2020.
Regarding the oil spill on January 15 at the La Pampilla Refinery (Peru) “as a result of an uncontrolled movement of the Mare Doricum vessel while it was discharging crude oil”, Repsol “is using all the means at its disposal to mitigate and remedy the effects of the spill and ratifies its commitment to collaborate with the Peruvian authorities and the affected communities”.