Repsol squeezes out massive share buyback after 14% rise

Strong momentum remains despite oil company continuing to suffer their reports show the weight of the rate set two years ago by the government of Pedro Sanchez against large energy companies and banks. Repsol has been hit hardest by this rate (popularly called “impressive”). In the semester the value is noted at 335 million euros as payment for this rate during this year, even if this is done in two tranches: one in February and the other in September.

The recovery in profits also comes despite lower gas prices and lower refining margins due to oil price volatility. If the impact of this volatility on accounts is not taken into account

(adjusted profit) Repsol’s half-year result would have been 2,126 million euros, down 21% from a year ago when crude oil prices were higher.

More investment

On the other hand, Repsol has increased its debt fivefold, rising from €797 million in June 2023 to the current €4,595 million. thanks to the strong investment momentum that the group has acquired, focused on growth strategy for renewable energy and multi-energy businesses.

During the semester The company increased its electricity volumes by 47% sold compared to the previous year, reaching 3,130 gigawatt hours. Repsol has 2.4 million electricity and gas customers in Spain and Portugal (9% more than at the end of 2023) and is the fourth operator in this market in Spain.

Another pillar of the company’s energy transition is the production of electricity from renewable sources. Repsol has completed its work semester with an installed capacity of 3118 megawatts (MW), 54.6% more than in the previous year. The company’s project portfolio is 60,000 MW.

More reward for the investor

On the other hand, Repsol’s board of directors has approved the buyback and amortization of 20 million group shares. At market prices, they represent around 260 million euros. They are added to the 40 million shares already bought back this year. From 2022The company repurchased 350 million shares, which constitutes 22.9% of the authorized capital as of December 31, 2021. Buying back and amortizing securities is a way to reward the investor because as the number of shares outstanding decreases, those that remain become more valuable.

On the other hand, “as part of the strategic update”, Repsol reports, the group “significantly” increased remuneration to its shareholders and paid out 0.9 euros gross per share in cash in the period from January to July, an increase of around 30% compared to 2023, in line with the target of 1,095 million euros.

In 2024, between the cash compensation and the share buybacks and amortizations already carried out, Repsol has allocated 1.7 billion euros to remunerate its shareholders. In total, Repsol plans to allocate 4.6 billion euros in cash dividends until 2027.

to which can be added share repurchases and amortizations of up to 5,400 million to achieve a distribution range to shareholders of 25% to 35% of operating cash flow for the period.