Repsol posted net income of €1.392 billion in the first quarter of 2022, compared with €648 million in the same period of the previous year.
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The company's integrated business model and the management carried out following the guidelines established in the 2021-2025 Strategic Plan were fundamental to take advantage of an international economic context which has recovered compared to the first months of 2021 that were still marked by the global pandemic.
The first three months of 2022 were marked by the invasion of Ukraine, which led to an abrupt rise in hydrocarbon prices.
Thus, Brent crude oil traded at an average of $102.2 per barrel, compared to $61 in the same period of 2021. For its part, Henry Hub gas averaged $5/MBtu, nearly double that of 2021 when it was priced at $2.7/MBtu.
Against this backdrop of rising commodity prices, which led to an increase in fuel prices, Repsol sought to alleviate the financial burden on its customers by offering significant discounts at its service stations.
Furthermore, in line with its commitment to become zero net emissions, the company advanced in its transformation process and took significant steps in cutting-edge projects to advance decarbonization, such as the start of work on Spain's first advanced biofuels plant, the creation of the country's largest consortium to promote renewable hydrogen and agreements to increase sustainable mobility.
The rise in hydrocarbon prices, reaching highs not seen since 2008, had an impact on the company's earnings. Adjusted net income, which specifically measures the performance of the businesses, rose to €1.056 billion compared to €471 million in the same period of the previous year.
The Exploration and Production unit, which carries out all its activities outside Spain, contributed 69% of this figure. The company's service stations in the country accounted for just under 5% of total adjusted net income.
Similarly, operating cash flow stood at €1.091 billion, also above the figure recorded in the first quarter of 2021. Excluding working capital, this number rises to €3.064 billion, a significant increase (+1.437 billion) compared with the comparable figure for the same period of the previous year.
On the other hand, net debt closed the period at €5.9 billion, slightly higher than the end of December 2021 where it was €5.762 billion, mainly due to the working capital increase during the period caused by the strong rise in commodity prices. Liquidity stood at €9.823 billion, sufficient to cover short-term debt maturities 3.5 times, up from 2.95 times at the end of December.
The strong cash generation has been reflected, since last year, in an improvement in the remuneration of shareholders who, on January 11, received a gross dividend of €0.30 per share.
In addition, the Board of Directors proposed to the Annual Shareholder Meeting, to be held on May 6, an increase in the cash dividend of 5%, to €0.63 per share, together with a reduction in the share capital through the redemption of 75 million treasury shares, representing approximately 4.91% of Repsol's total share capital.
In this context, and as established in the Strategic Plan, to provide value to shareholders the company carried out a share buyback program that involved the acquisition of 11.6 million shares. ■