Repsol has left behind the losses that accompanied it during the year of the pandemic. The company led by Josu Jon Imaz has achieved a profit of 648 million of euros in the first three months of 2021 that contrast with the red numbers for 487 million registered in the same period of the previous year, since it has been driven by the recovery in crude prices.
And it is that, the outbreak of the Covid-19 pandemic caused in 2020 a collapse in world demand and the prices of reference raw materials that led Brent to record minimums of $ 15 per barrel in April of last year and to a average price for the year of 41 dollars. On the other hand, between January and March 2021 the average price of Brent has increased to 61 dollars per barrel and has allowed stocks to revalue, while that of Henry Hub gas stood at 2.7 dollars per MBtu, similar to the previous quarter.
For his part, adjusted net result, which measures the evolution of businesses discounting the variation in the value of inventories and extraordinary items, stood at 471 million euros, 5.4% above the equivalent period of 2020 thanks to the Exploration and Production and Chemical areas . In addition, all businesses obtained a positive operating cash flow, which for the Group as a whole amounted to a total of 1,030 million euros.
Likewise, Repsol highlights that in the first three months of the year has managed to reduce its net debt by 326 million euros (representing 5%) to reach 6,452 million. For its part, liquidity reached 8,456 million euros, which represents 2.93 times the short-term maturities. Additionally, in order to strengthen its financial position, the company closed in March an issue of subordinated bonds for an amount of 750 million euros.
By business areas, Exploration and Production contributed a result of 327 million euros, compared to 90 million in the same period of the previous year (+ 263%) thanks to the combination of cost adjustments, the optimization of operations and the rebound in the average prices of hydrocarbons compared to the first three months of 2020, which was 22% for Brent and 35% for Henry Hub. In addition, it achieved that its realization prices for crude oil and gas performed better than the international benchmark, with an increase between January and March of 23.4% in the case of crude oil and 41.7% for gas.
The area Industrial, for its part, achieved a result of 73 million euros, compared to 288 million in the first three months of 2020 (-74.6%), weighed down by the negative impact of Covid-19 on international market conditions. Specifically, the Chemicals, Wholesale and Gas Trading areas performed positively, while Refining obtained low margins and suffered from stoppages in activity. In addition, the area is being affected by the uncertainty generated by the energy transition, which will require projects and investments to meet the decarbonization objectives.
The area of Commercial and Renewables reached a result of 101 million, which is -16.5% less than the 121 million in the first quarter of fiscal year 2020. More in detail, restrictions on mobility and the effects of the storm Filomena at the beginning of the year contracted by 14 % demand for the quarter at service stations, although Renewables and Generation performed well, as did Lubricants, which increased their volumes sold.
An oil company in transformation
Repsol is in a moment of transformation after presenting its strategic plan for the period 2021-2025 in which it foresees investments of 18,300 million euros of which 30% (5.5 billion) will go to low-carbon initiatives. The new plan sets emission reduction targets, with a reduction in carbon intensity of 12% by 2025, 25% by 2030 and 50% by 2040
In this sense, during the first months of the year Repsol has launched various industrial transformation initiatives that allow it to advance in the energy transition and collaborate in the economic recovery of the country. 40% of investments in the quarter went to low-carbon projects.
In this sense, Repsol made progress during the quarter in transforming its industrial facilities into hubs multi-energy, capable of generating products with a low, zero or even negative carbon footprint. The company will invest in its refineries in Spain to move towards decarbonisation. Investments in Cartagena stand out, where work began for the construction of the new advanced biofuels plant, the first of its kind in Spain. In recent months, the 3D design of the facilities has begun, making progress in engineering projects and in the purchase of new equipment.In 2021, 66 of the 188 million euros planned for the project will be invested.
In relation to renewable hydrogen, a clear growth vector for the company, at the end of January 2021 the H24All project, a consortium led by Repsol to develop Europe’s first 100 MW alkaline electrolyzer plant. Likewise, Petronor and Repsol lead another relevant hydrogen project, the Basque Hydrogen Corridor, BH2C, announced on February 22. More than 78 organizations participate in it, it will mean an investment of more than 1,300 million euros until 2026
Repsol has a portfolio of 31 projects, with a total associated investment of 6,359 million euros, in the framework of the calls for expressions of interest for European Next Generation funds carried out by the Government.