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Repsol Q2 Income Above Consensus; Credit Metrics Softer

ENERGY SECTOR

Rating: Baa1/BBB+/BBB+ EUR Spreads Muted

  • Production and Spanish refining margin indicator in line with the credit-negative trading update previously covered.
  • Adjusted Income +3.9% YoY (+14.4% vs. company-provided consensus) with upstream +4.1% (roughly half the business), industrial (one-third) -16.3% and customer (one-fifth) +6.8%.
  • EBITDA CCS was +10.1% (+4.1% vs. BBG consensus).
  • Q2 OCF of EUR 925mn down from EUR 1.7bn in Q223 mainly due to the acquisition of Repsol Resources UK and Sinopec arbitration. New buybacks announced in line with 25-35% of OCF policy.
  • Net debt of EUR 4.6bn is EUR 0.7bn higher vs. Q1 due to buybacks and new leases with gearing rising to 13.8% from 11.5%.

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