Energy giant Repsol announced a new share buyback program on Wednesday after posting a 14% year-on-year increase in profit for the first half of the year, despite a decline in gas and oil prices.
Net Profit and Adjusted Profit
The Spanish company reported a total net profit of €1.63 billion between January and June, compared to €1.42 billion in the first half of 2023, according to the results released on Wednesday.
However, its adjusted profit, a key indicator of the company’s performance closely watched by investors, declined by 22% to €2.13 billion.
Impact of Lower Gas Prices and Refining Margins
This decline in adjusted profit is attributed to lower gas prices and refining margins, the energy group explained in a statement. Repsol has been actively transitioning towards a “multi-energy” model over the past several quarters.
Despite the challenges in the hydrocarbon sector, “Repsol has once again delivered a solid operational and financial performance,” said Josu Jon Imaz, the company’s CEO, in a statement.
Increased Dividend and Share Buyback Program
In light of these results, the group announced it will distribute a dividend of €0.90 per share to its shareholders in 2024, a 30% increase compared to last year’s payout.
Additionally, Repsol plans to implement a new share buyback program for 20 million shares this year, adding to the 40 million shares already repurchased in mid-July.
Share buyback programs, which have become increasingly common among companies, reduce a company’s capital and mechanically increase shareholder returns.
Investment in Low-Carbon Energy
The Spanish giant, which has embarked on a strategic shift away from the “all-oil” model in recent years, also reported investing €1.6 billion in low-carbon energy since January.
These investments, combined with the share buyback programs, have impacted the company’s net debt, which now stands at €4.59 billion, an increase of €797 million compared to a year ago.
Future Investment Plans
Overall, the Spanish group plans to invest between €16 billion and €19 billion by 2027, with 60% allocated to the Iberian Peninsula and 35% to low-carbon emission projects.