Repsol Beats Street, Hikes Dividend
Spanish oil major Repsol on Wednesday hiked its dividend by 13 percent to 0.90 euros per share after posting a better than expected fourth-quarter net profit, as trading gains and lower financial costs more than offset falling refining margins.
Recurring net profit adjusted for one-off gains and inventory effects (CCS net profit) came in at 703 million euros ($860 million) in the October-December period compared to 698 million euros last year and a forecast for 554 million euros in a Reuters poll of analysts.
Production in the fourth quarter was 715,000 barrels per day versus 679,000 bpd a year ago. The refining margin dropped to $6.9 per barrel versus $7.2 per barrel a year ago.
Europe's fifth-largest refiner by market value has focused on cost and debt reduction in recent years to improve its balance sheet, resulting in recent credit rating upgrades.
It agreed last week to sell its 20 percent stake in Gas Natural (EGAS) to CVC Capital Partners for 3.82 billion euros, a move that could allow the oil major to restart investment after years of debt reduction.
CEO Josu Jon Imaz said it would use the proceeds of the sale mainly for organic investment and would only embark in acquisitions if they bear high returns.
It will also pay a 0.90 euro per share dividend in 2018 from 0.80 euro in 2017 and will buy back shares in order to cancel the dilution effect resulting from the payment of part of the dividend in shares rather than in cash.
Shares in Repsol were up 2.7 percent at 14.59 euros each at 1350 GMT, leading gains on Spain's blue-chip index Ibex which was down 0.56 percent.
Net debt stood at 6.27 billion euros at the end of December, down from 6.97 billion euros at the end of September and meeting the company's end-of-year goal of below 7 billion euros.
Repsol will present a new strategic plan on June 7.
Reporting by Julien Toyer
