Repsol reported a strong start to 2022, more than doubling its first-quarter net result to 1,392 million euros from 648 million euros in the same period a year earlier, a rise driven largely by higher prices amid the global update in energy markets following the pandemic and the Ukraine crisis. The quarter reflected a market environment where oil prices surged and gas benchmarks climbed, influencing the group’s profitability as it operated across its diverse business portfolio.
During the period, Brent Crude traded at an average level near 102 dollars per barrel, well above the roughly 61 dollars seen in early 2021. Henry Hub natural gas traded at about five dollars per MBtu, nearly double the prior-year level, contributing to a broader energy price rally thatPRINTF pushed margins and, in turn, the company’s adjusted net income higher. In the face of price volatility, the firm reported an adjusted net income of 1,056 million euros, up from 471 million euros in the prior-year quarter, signaling meaningful earnings leverage from higher commodity prices and disciplined operating execution.
Regional exploration and production activities, conducted entirely outside of Spain, contributed 731 million euros to the adjusted net income, accounting for 69% of the consolidated figure. This segment benefited from higher realized prices and selective production recoveries, despite a softer average first-quarter output of 558,500 barrels of oil equivalent per day compared with the prior year. Growth in Spain’s prices supported the business lines as production and sales resumed following earlier pauses in Malaysia, Russia, Ecuador, Vietnam, Norway and Algeria, underscoring the resilience of the company’s international asset base.
Industrial activities in refining posted a 236 million-euro result for the January-to-March period, significantly higher than the 73 million euros recorded a year earlier, driven by stronger throughput and product mix. The commercial and renewable energy division also advanced, delivering 117 million euros, compared with 101 million euros in the same quarter of 2021. The recovery was aided by easing mobility restrictions and a gradual normalization of demand in several markets. Notably, price movements in the wake of the Ukraine situation and ongoing supply constraints supported retail margins, while the company continued to run service stations with competitive pricing to reflect market conditions and maintain customer loyalty. This channel contributed a meaningful portion of the domestic adjusted net income, underscoring its role in the company’s value creation strategy in its home country and abroad.
Operating cash flow reached 1,091 million euros, ahead of the first quarter of 2021, reflecting robust cash generation across the portfolio. Net debt stood at 5,900 million euros at the period end, modestly higher than 5,762 million euros at the end of December, driven by higher working capital needs from the spike in raw material prices. Liquidity was strong at 9,823 million euros, providing ample headroom to cover short-term maturities multiple times over and reinforcing the balance sheet amid ongoing market volatility.
Cash returns to shareholders continued a pattern of value delivery, supported by a gross dividend of 0.30 euros per share paid on January 11. The Board signaled a potential increase in shareholder returns at the Ordinary General Assembly and approved a plan to raise the cash dividend to a maximum total of 0.63 euros per share, supported by a reduction in share capital through a buyback of 75 million treasury shares, representing roughly 4.9% of Repsol’s equity. In line with the Strategic Plan aimed at enhancing shareholder value, the company also conducted a share repurchase program that included the acquisition of 11.6 million additional shares, reflecting a proactive capital management approach during a volatile period for energy markets. These actions illustrate how Repsol sought to balance growth, liquidity, and returns to investors in a dynamic macroeconomic environment. The quarterly performance, along with ongoing portfolio optimization, positioned the company to navigate price volatility while pursuing long-term value creation for its stakeholders. [Attribution: Repsol quarterly report]