REPYF - Repsol, S.A. (REPYY) Q4 2024 Earnings Call Transcript

2025-02-21 17:04:01 ET

Repsol, S.A. (REPYY)

Q4 2024 Results Conference Call

February 20, 2025 06:00 AM ET

Company Participants

Pablo Bannatyne - Head of Investor Relations

Josu Jon Imaz - Chief Executive Officer

Conference Call Participants

Alessandro Pozzi - Mediobanca

Irene Himona - Bernstein

Michele Della Vigna - Goldman Sachs

Alejandro Vigil - Banco Santander

Biraj Borkhataria - RBC

Henri Patricot - UBS

Giacomo Romeo - Jefferies

Lydia Rainforth - Barclays

Sasikanth Chilukuru - Morgan Stanley

Matt Lofting - JPMorgan

Matt Smith - Bank of America

Anish Kapadia - Palissy Advisors

Presentation

Pablo Bannatyne

Welcome to Repsol's Fourth Quarter and Full Year 2024 Results Presentation. Today's -- our conference call will be hosted by Josu Jon Imaz, our Chief Executive Officer, with other members of the executive team joining us as well.

Before we start, let me draw your attention to our disclaimer. During this presentation, we may make forward-looking statements based on estimates. Actual results may differ materially depending on a number of factors as indicated in the disclaimer.

I will now hand the conference call over to Josu Jon.

Josu Jon Imaz

Thank you, Pablo. Good morning to everyone, and thank you for joining us. Today, I'll take you through the numbers and main messages that explain our 2024 performance and the outlook for 2025. As usual, after the presentation, I'll be and we will be available for a Q&A session.

One year ago, we shared with you our strategic update to setting the basis that will help us consolidate Repsol's multi-energy proposal. Today, 12 months later, we can affirm that 2024 was a positive year for us, a year in which we made material progress towards the execution of the strategy founded on a solid performance across the businesses.

Operating under the capital firework of our plan, we successfully fulfilled our remuneration commitments, prioritizing shareholder payouts maintaining a strong balance sheet while investing in profitable growth. Bolstered by our robust fourth quarter, we achieved an adjusted income of €3.3 billion, and delivered €6.3 billion of operating cash flow ahead of our latest guidance before accounting for the Sinopec transaction.

Total shareholder remuneration amounted to €1.9 billion, equivalent to 31% of the operating cash flow. The cash dividend was increased by approximately 30% to €0.90 per share and we redeemed 60 million shares, equivalent to 5% of our share capital at the beginning of 2024. Over the last three years, Repsol has canceled an equivalent to 24% of its share of it. Net debt closed at €5 billion, €0.5 billion reduction compared to September.

The gearing ratio, including leases, closed at 14.7% and excluding the €4.3 billion of leases accounted in our reported net debt. The gearing stood at 2.4%. Total liquidity stood at €9.5 million, more than 3.5x our short-term debt. Net CapEx after disposals and asset rotations was €5.7 billion, but this figure didn't include the second installment for the disposal of Colombia of €0.3 billion that will be posted in the first quarter of 2025.

The investment level in 2024 was the higher development activity of the first part of our strategic plan mainly associated with the FIDs taken in the Upstream over the past few years and the implementation of low carbon projects. As an indication of the CapEx intensity reduction that we anticipate for coming months, the fourth quarter of 2024 registered the lower quarterly CapEx of the year, both gross and net in a period -- I mean, the last quarter of the year, that traditionally has concentrated a higher share of Repsol's annual investment.

Looking forward, we remain committed to a net CapEx of €16 billion to €19 billion in the four years of our plan with a net investment for 2024 and 2025 projected to reach a maximum of €9.5 billion. So it seems to me that we tend to be in the low range of the committed net CapEx of €16 million to €19 billion that we anticipated for the four years of our plan. The group's capital expenditures are expected to normalize by 2026 once the investment peak of the upstream development cycle is complete....

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