(Adds second analyst comment)
By Isla Binnie and Joao Manuel Vicente Mauricio
MADRID, Oct 28 (Reuters) - Spanish energy company Repsol
on Thursday said it would raise its dividend and buy
back shares after strong oil and gas prices helped to lift
third-quarter profit above pre-pandemic levels.
Global energy prices have soared as economies rebound from
the coronavirus crisis, generating cash that can be returned to
shareholders and spent on the low-carbon strategies investors
are increasingly demanding to contribute to the fight against
climate change.
Repsol said its highest quarterly net result since the end
of 2018 would allow it to boost its 2022 dividend payment by 5%
to 0.63 euros ($0.73) per share.
It also bumped up 2021 guidance for its favoured earnings
metric before interest, tax, depreciation and amortisation
(EBITDA) by 600 million euros to around 6.7 billion euros, on
the back of high prices and strong refining margins.
Despite the apparently positive news, shares fell on a flat
Madrid stock exchange and were quoted almost 4% lower on the day
by 1046 GMT. The wider STOXX Europe 600 oil and gas index
was down around 0.85% with oil prices dipping on the
day.
Analysts at Jefferies noted that the company had already
suggested earlier this year it would increase its dividend and
bring forward a buyback programme.
Repsol pledged to reduce the equivalent of 4.9 percent of
its capital, buying back 35 million shares and redeeming
treasury shares.
"That brings Repsol into the buyback club in Europe earlier
than initially expected and signals confidence around their
strategy which we like," Bernstein analysts said in a note.
Larger rivals Royal Dutch Shell, TotalEnergies
and Equinor have also launched buyback programmes this
year.
Repsol's quarterly profit of 623 million euros, came above
an average forecast of 582 million euros drawn from a poll of
analysts conducted by the company.
Jefferies also said it had calculated that net income would
have been 6% lower than market consensus once adjusted for gains
in the market value of Repsol's treasury shares.
The company said its realisation price per barrel of oil was
68% higher in the three months to September than in the same
period last year, while the gas equivalent shot up by almost
114%.
Shell reported a drop in earnings on Thursday, missing
expectations, while TotalEnergies reported a sharp rise.
($1 = 0.8618 euros)
(Reporting by Isla Binnie
Editing by David Goodman, Kirsten Donovan)
