Cepsa reported 168 million euros in profits through July, up 143% from the same period last year. The prior year’s results reflected significant inventory valuation adjustments and the impact of a 320 million euro extraordinary tax on government-affiliated energy companies’ sales. Nevertheless, the company signals a negative effect on fuel sales due to perceived fraud at high volumes in the Spanish market.
“We are pleased to report solid results across all segments, even though Spain’s fuel marketing faced headwinds from elevated levels of fraudulent volumes in the market. The financial outcome remains pressured by the design of the extraordinary tax on energy firms in Spain”, stated Maarten Wetselaar, CEO of the country’s second-largest oil company. Commercial sales volumes declined by 1% to 8.3 million tonnes.
In recent years, amid substantial fuel price rises driven by volatile energy markets, Spain’s tax authority, the AEAT, has detected a rise in fuel-sector fraud. The practice involves intermediaries in fuel trades that do not remit the appropriate VAT. In 2022 and 2023, the AEAT carried out operations that estimated fraud at about 100 million euros in each year.
This year, the National Association of Automatic Service Stations (Aesae), representing major players such as Ballenoil, Petroprix, and Gasexpress, alerted the tax authority to a surge in fraud linked to fuel taxes, especially automotive diesel. Its calculations suggest a potential shortfall near 1,000 million euros.
Overall, the three business lines at Cepsa have shown resilience in the first half of the year against a backdrop of stable operating and market indicators. EBITDA reached 1,099 million euros, well above 742 million euros in the first half of 2023. In the energy division, which includes refining activities, Cepsa earned 875 million euros, up 169% as margins remained favorable and production stayed steady.
Meanwhile, the chemicals division rose to 146 million euros in the first six months, up from 123 million in the prior year. This growth came on the back of a strong recovery in European volumes for products such as LAB, phenol, and solvents, aided by lower natural gas prices. In exploration and production, profits fell by 58% to 156 million euros due to the asset divestment in Abu Dhabi the year before. The period did benefit from the restart of production at the RKF field in Algeria early in the year after maintenance, lifting second-quarter output figures.
The company is actively advancing several strategic projects, including the construction of a second-generation biofuel plant in Huelva, the hydrogen green project in Andalusia, and the deployment of ultra-fast charging for electric vehicles as part of its decarbonization roadmap for the energy transition period. In June, Cepsa acquired a low-cost Ballenoil network and plans to install charging infrastructure at those sites soon.
“Our objective remains clear: to become a leading supplier of bespoke green molecules this decade while helping shape regulatory and tax frameworks that enable Spain to expand its leadership in clean energy”, Wetselaar concluded in the press release. [Source attribution: Cepsa press release]