Spanish oil company Repsol YPF reported 2007 adjusted net profit of €3.19 billion ($4.80 billion), 2% above what it made in 2006.The figures, adjusted to remove non-recurring items, showed expected gains in refining profits and a dip in upstream income.
Repsol said its adjusted operating profit (EBIT) dropped 5.0% year-on-year to €5.49 billion after production fell by nearly 8%.
A Reuters poll of 10 analysts had forecast Repsol would make net profit of €2.91 billion and EBIT of €5.44 billion.
Repsol is due to unveil its new strategic plan through to 2012 later on Thursday.
Repsol said adjusted operating profit in its downstream refining and marketing division rose nearly 13% because of higher margins, but in upstream, adjusted operating profit fell by 15% due to lower production, higher costs and unfavorable foreign exchange rates.
Adjusted profit in the gas and electricity division was 24% higher, boosted by income from Gas Natural in which Repsol owns nearly 31%.
Repsol shares opened lower after the results announcement but firmed in early trade to stand 0.8 firmer at €23.09, outperforming a 0.4% fall in the DJ Stoxx index of European oil and gas stocks.
The company's shares have fallen by about 8% over the past year while the index has gained 2.2% as Repsol's profits have retreated despite record-high oil prices.
Repsol shares trade on a multiple of 9.6 times estimated 2008 earnings while the DJ Stoxx Oil and Gas index trades at 9.9 times, according to Reuters data.
Repsol has been mentioned as a possible player in the much-rumored consolidation of the Spanish energy sector because of its stake in Gas Natural, but has denied any connections with builder ACS which owns chunks of power firms Union Fenosa and Iberdrola. (Reuters)