Repsol Benefits From Higher Commodity Prices, Strong Refining Margins in Q1

Repsol’s first-quarter adjusted earnings increased to EUR 1.01 billion compared with adjusted earnings of EUR 471 million a year ago, largely on higher oil and gas prices and stronger refining margins. Operating cash flow improved only slightly to EUR 1.1 billion compared with EUR 1.0 billion the year before, but excluding working capital, it increased to EUR 3.1 billion from EUR 1.4 billion last year. Capital spending totaled EUR 576 million during the quarter as management reiterated its 2022 spending guidance of EUR 3.8 billion, with 30% focused on low-carbon investments. Our fair value estimate and moat rating are unchanged.