Spanish energy company and forecourt operator Repsol has reported a 9% fall in second quarter profit due to lower oil prices and a sharp contraction in refining margins, but the results beat forecasts thanks to new production and growth in its chemicals business.
Repsol also proposed the buy back and cancellation of 5% of its outstanding shares, helping boost shares almost 4% in morning trade.
Recurring net profit adjusted for one-off gains and inventory effects fell to €497 million over the April-June period, down from €549 million in the same period last year, the company said.
That was ahead of a forecast of €478 million compiled by the company on the basis of projections by 25 analysts.
Repsol's refining margin plunged 34% in the second quarter from the first quarter.
Last September, Repsol and retailer El Corte Inglés has announced the next steps of a planned rollout of 1,000 Supercor Stop & Go outlets around Spain over the next three years.
Rising supply from the United States and a weaker outlook for demand due to slowing economic growth have dragged on oil prices this year, prompting the Organization of Petroleum Exporting Countries (OPEC) to prop them up by limiting supplies.
Brent crude averaged $63.15 per barrel in June, compared with $75.94 in the same month last year.
Repsol said new wells in Colombia and Canada, the purchase of a stake in Norwegian oil field Mikkel and production from the deepwater Buckskin project in the United States bolstered its upstream division.
At its downstream division, lower refining margins were partially offset by higher sales at its chemicals unit and in Peru, as well as a stronger U.S. dollar versus the euro.
Repsol is buying low-carbon power generation facilities including wind farms and solar plants as part of a drive to help meet U.N.-backed goals to limit global warming and establish itself as a provider of electricity in Spain.