Repsol Posts Higher Quarterly Income on Production Gains

Repsol SA (REP), Spain’s largest oil producer, reported an increase in second-quarter earnings on production gains as new projects started up.

CCS net income rose to 423 million euros ($559 million) from 406 million euros a year earlier, the Madrid-based company said today in a statement. That fell short of the 431 million-euro average estimate of 17 analysts surveyed by Bloomberg.

Repsol, which has ramped up exploration efforts in Latin America and North America to offset the loss of its Argentine YPF SA unit, said production rose 12 percent from a year earlier. It cited project startups and reduced maintenance shutdowns in Trinidad and Tobago for the increase.

“Repsol’s volume growth was driven by the startup of five of the company’s 10 key upstream projects,” said Oswald Clint, a London-based analyst at Sanford C. Bernstein & Co.

Refining profit slipped 32 percent to 138 million euros because of lower margins and a deterioration in differentials between light and heavy crudes. The refining margin fell to $2.6 a barrel from $4.7 a barrel a year earlier.

“The miss was due to a higher than expected tax rate of 45 percent as well as lower than expected income from associates,” said Peter Hutton, an analyst at RBC Capital Markets in London.

The shares were 0.2 percent lower at 17.31 euros as of 10:12 a.m. in Madrid trading. The stock is up 13 percent so far this year.

Repsol’s liquefied natural gas division, most of which it sold to Royal Dutch Shell Plc in February for $4.4 billion, reported profit more than doubled to 170 million euros on improved volumes and margins. The transaction is due to be completed in the fourth quarter.

To contact the reporter on this story: Patricia Laya in Madrid at playa2@bloomberg.net

To contact the editor responsible for this story: David Risser at drisser@bloomberg.net

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