MADRID (Reuters) - Spanish oil firm Repsol (REP.MC) beat third-quarter profit forecasts on Thursday as higher output more than offset the loss of its YPF (YPFD.BA) business in Argentina, which was seized by the government there earlier this year.
Argentine President Cristina Fernandez took over Repsol’s majority stake in YPF in April, accusing the Spanish oil company of investing too little and making Argentina increasingly reliant on pricey fuel imports.
Repsol recovered from the loss of YPF in the third quarter, posting net profit adjusted for one-time items and inventory costs (CCS adjusted net) of 496 million euros, beating a Reuters poll average of 458 million euros.
Including YPF last year, Repsol posted third-quarter net profit of 429 million euros.
The company’s upstream division, including exploration and production, drove profits thanks to a recovery in output in Libya and an additional pick-up in Bolivia, fuelling a 9 percent rise in output to 327,000 barrels of oil per day in the nine months to September from a year ago.
Strength from its liquefied natural gas (LNG) business and higher margins in its traditional refining business in Spain also helped boost third quarter results, the company said, compensating for weakness in its chemicals division.
Clean CCS earnings before interest and tax (EBIT), which exclude special items and inventory holding effects, rose 64 percent to 1.3 billion euros in the third quarter versus a Reuters poll average of 1.1 billion.
Repsol, whose shares have lost 32 percent so far this year, has said it will sell LNG assets to cut debt and maintain a coveted investment grade rating while still investing in its growing production business.
Its shares closed down 3 percent on Wednesday before the results.
Reporting by Tracy Rucinski; Editing by Mark Potter