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Introduction & Market Context
Repsol SA (OTC:REPYY) (MCE:REP) presented its second quarter 2025 results on July 24, revealing a resilient performance despite significant operational challenges and a volatile price environment. The company reported an adjusted income of €0.7 billion, up 8% from the previous quarter but down 18% year-over-year, as it navigated lower oil prices and a major power outage that impacted its industrial operations in Spain.
The market environment during Q2 featured Brent crude prices averaging $68 per barrel, significantly lower than the $85 per barrel seen in the same period last year. Meanwhile, Henry Hub natural gas prices stood at $3.4/MBtu, up from $1.9/MBtu in Q2 2024, while the company’s refining margin indicator reached $5.9/bbl, slightly down from $6.3/bbl in the comparable period.
As shown in the following chart of key market indicators:
Quarterly Performance Highlights
Repsol’s cash flow from operations (CFFO) showed remarkable improvement, reaching €1.7 billion, representing a 50% increase compared to Q1 2025 and an impressive 86% jump year-over-year. The company reduced its net debt to €5.7 billion, a 2% decrease from March 2025, resulting in a gearing ratio of 17.9% (6.8% excluding leases).
The company’s performance varied significantly across business segments. The Upstream division delivered an adjusted income of €439 million (+3% vs Q2 2024), with production reaching 557 thousand barrels of oil equivalent per day (Kboed), positioning at the higher end of the full-year guidance range. This production level represents a 3.1% increase from the previous quarter, though still 5.4% below the same period last year.
The following slide illustrates the Upstream segment’s performance and strategic developments:
The Industrial segment faced substantial challenges, with adjusted income falling to €99 million, a 66% decrease compared to Q2 2024. This decline was primarily attributed to a major power outage in Iberia and additional power supply disruptions at the Cartagena and Puertollano facilities. Repsol estimates the total impact of these operational issues at approximately €175 million, with €130 million affecting Refining and €45 million impacting Chemicals.
The following chart details the Industrial segment’s performance metrics:
In contrast, the Customer segment demonstrated strong performance with adjusted income of €198 million, a 25% increase year-over-year. The segment’s EBITDA rose to €351 million (+17% vs Q2 2024), driven by robust sales of road transportation fuels, which increased 16% compared to the same period last year.
Strategic Initiatives
Repsol continues to make progress on its strategic priorities for 2025, with several key developments during the quarter. The company reached €1.2 billion in divestments and asset rotations year-to-date, with €0.5 billion already cashed in during the first half of 2025. Net capital expenditure stood at €2.2 billion until June (€1.5 billion when considering cash-in from all announced disposals).
In the Upstream segment, Repsol completed the divestment of its non-operated position in Corridor (Indonesia) for $425 million and expects to close a joint venture with Neo Energy in the third quarter of 2025. The company also achieved first gas from the Cypre and Mento projects in Trinidad and Tobago, with the Leon-Castile project in the Gulf of Mexico expected to start up in Q3 2025, and the first phase of the Pikka project in Alaska anticipated to reach first oil between December 2025 and January 2026.
The Low Carbon Generation segment executed its first asset rotation in the United States, selling a 46% stake in a 777 MW solar and battery storage portfolio (Frye and Jicarilla projects), with cash expected in the second half of 2025. The company is also working on two additional asset rotations in the USA and Spain.
The following slide highlights the progress in the Low Carbon Generation segment:
Forward-Looking Statements
Repsol has updated its guidance for 2025, maintaining most of its targets despite the challenges faced in the second quarter. The company now expects Upstream production to reach approximately 550 Kboed, at the higher end of its previous guidance range of 530-550 Kboed. Cash flow from operations is projected at around €6 billion, while net capital expenditure is expected to be approximately €3.5 billion.
The company remains committed to its shareholder remuneration policy, targeting distribution of 30-35% of cash flow from operations. This includes a cash dividend of 0.975 euros per share (an 8.3% increase compared to 2024) and share buybacks equivalent to €700 million in 2025.
The updated guidance is based on assumptions of Brent crude at $70 per barrel, Henry Hub natural gas at $4 per MBtu, and a refining margin indicator of $6 per barrel, while also accounting for the impact of the Iberian power outage.
Detailed Financial Analysis
Repsol’s comprehensive financial results for Q2 and the first half of 2025 demonstrate the company’s ability to navigate challenging conditions. The Upstream segment’s adjusted income of €439 million represents a slight increase from €427 million in Q2 2024, despite lower oil prices, highlighting the effectiveness of the company’s operational improvements and portfolio optimization.
The Industrial segment’s significant decline in adjusted income to €99 million (from €293 million in Q2 2024) reflects the substantial impact of the power outage, which reduced distillation utilization to 74% (from 88% in Q2 2024) and conversion utilization to 86% (from 96%). However, the company notes that refining activity has normalized in July, with its margin indicator exceeding $9 per barrel and distillation utilization reaching 94%.
The Customer segment continues to be a bright spot, with adjusted income growing to €198 million (from €159 million in Q2 2024). The segment has made significant progress in its multi-energy strategy, with 53% of service stations in Spain now offering multi-energy solutions (up from 34% in Q2 2024). The number of power and gas retail customers has increased to 2.8 million (+18% vs Q2 2024), with 1.1 million being multi-energy customers.
The Low Carbon Generation segment showed improvement with adjusted income of €7 million, compared to €1 million in Q2 2024. Renewable electricity generation increased to 1.9 TWh (from 1.5 TWh), while installed renewable capacity grew significantly to 4.7 GW (from 3.1 GW in Q2 2024).
The following table provides a comprehensive overview of Repsol’s financial results across all segments:
Overall, Repsol’s Q2 2025 results demonstrate the company’s resilience in the face of operational challenges and market volatility. The strong performance in Upstream and Customer segments, combined with strategic progress in portfolio optimization and new project development, positions the company well to achieve its 2025 strategic objectives despite the temporary setback in the Industrial segment.
Full presentation:
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