Repsol 2020 net income deep red at -€3.29 billion, adjusted net income in black at €600 million
Although Madrid-based multinational energy company Repsol reported a net income of minus 3.289 billion euros for 2020, its adjusted net income was in the black at 600 million euros. “This variable”—adjusted net income—“specifically measures the performance of the company’s businesses, all of which achieved positive results in a complex environment marked by the global health crisis,” the company stated. “This strong performance was also reflected in the generation of positive operating cash flow in all businesses, totaling 3.197 billion euros for the Repsol Group.”
The oil price tumble of 2020 had a negative impact of 978 million euros on the company’s inventories. A revision of Repsol’s future crude and gas price deck adjusted the value of exploration and production assets downward with a special item correction of minus 2.911 billion euros—a major attribution to its poor net income of minus 3.289 billion euros for the year.
The company said it “demonstrated its strength in this difficult scenario” with a positive cash flow of 1.979 billion euros and a net debt reduction of 1.178 billion euros in 2020 to 3.042 billion euros.
Repsol’s commercial and renewables unit earnings were 485 million euros. Last year, the company presented its new strategic plan to speed up its transformation to meet the goal of net-zero carbon emissions by 2050. Among its 2020 decarbonization projects of note were the announcement of Spain’s first advanced biofuels plant in Cartagena, which will cost an estimated 188 million euros and produce 250,000 tons of renewable diesel and sustainable aviation fuel (SAF); and its first and second production runs of SAF in Puertollano and Tarragona in August 2020 and January 2021, respectively.
“In 2020, we faced an unprecedented scenario and laid the groundwork for the company’s future,” said CEO Josu Jon Imaz. “We have again demonstrated the robustness of our project, assumed an essential public service role, and confirmed, once again, that our company is useful to society. The industry has demonstrated that it is part of the backbone of the Spanish economy and one of its main driving forces. It plays a crucial role in the recovery from the crisis, and also in contributing to a more decarbonized world, using all available technologies.”
According to Repsol, the company reduced its carbon intensity indicator in 2020 by 5 percent compared to the 2016 baseline—above the 3 percent set as an initial target. Adjusted for reduced activity as a result of the coronavirus pandemic, the reduction was 3.7 percent. Since 2014, the company has reduced 2.4 million tons of CO2-equivalent. Under its strategic plan, Repsol aims to cut carbon 12 percent by 2025, 25 percent by 2030, and 50 percent by 2040.
For more information on Repsol’s 2020 finances, click here.