REPSOL: 4Q’20 TRADING STATEMENT AND RESULTS ESTIMATES (ANÁLISIS BANCO SABADELL)
4Q’20 Trading statement without surprises. Full results to be released on 18/02. BUY.The trading statement shows operating trends in line with the guidance and expectations, with +2% in production levels to 628x kboe and a refining margin of US$ 1.00 (vs. U$ -0.10 as of 3Q’20) negating the risk of surprises in 4Q’20 results (18/02). We expect € 329 M of Net Profit (vs. € 300 M guidance and € 317 consensus). The key will be debt, where we expect € 4.19 Bn (€ 4.21 Bn consensus) vs. REP’s target of €~3.3 Bn. Here, we would demand from the company a sustainable debt performance that is not exclusively due to a temporary improvement in working capital levels in 1Q’21. After outperforming the IBEX by +4%/+30% in the last month/past three months (in line with the sector), we continue to see upside (+10%), with the stock pricing in long-term crude oil prices below US$~50.00 vs. our estimate of US$ 55.00.
Repsol is an oil and gas company. Co. is engaged in all the activities relating to the oil and gas industry, including exploration, development and production of crude oil and natural gas, transportation of oil products, liquefied petroleum gas (LPG) and natural gas, refining, the production of a wide range of oil products and the retailing of oil products, oil derivatives, petrochemicals, LPG and natural gas, as well as the generation, transportation, distribution and supply of electricity. Co. operates in more than 40 countries. Co.'s operations are divided into four segments: Upstream, Downstream, LNG and Gas Natural Fenosa.
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