MADRID (Reuters) - Slumping prices for crude oil and evaporating demand for fuel due to restrictions on movement to contain the coronavirus have prompted Cepsa to cut its investment plans and delay any decision on paying a dividend, the Spanish oil firm said on Monday.
The Madrid-based company, which is owned by Abu Dhabi state fund Mubadala and private equity firm Carlyle, said it would also temporarily lay off about 1,200 staff in different stages.
“We are experiencing a crisis on two fronts,” Chief Executive Philippe Boisseau said in a statement.
The company also reported a 3% fall in core earnings (EBITDA) in the first three months of the year versus the same period in 2019.
Those two crises were “firstly the oil supply where prices have fallen drastically and secondly COVID-19 that has triggered a substantial drop in demand,” Boisseau said.
More than four million people have been infected worldwide by the virus and economies wrenched into contraction, tugging further on oil prices that were already sinking under a flood of supply by top exporter Saudi Arabia and its allies.
Following in the footsteps of BP and Spanish peer Repsol, Cepsa said it would slice 210 million euros ($227.18 million), or one fifth, off its original budget for 2020 investments.
The board has agreed to delay any decision on how much money to pay in dividends and when to do so until it can better gauge the impact of the crisis on its markets, the statement said.
The company usually distributes an annual dividend in April. Last year, shareholders pocketed 177 million euros, an amount roughly in line with other years, a Cepsa spokeswoman said.
Reporting by Isla Binnie; Editing by Angus MacSwan