Spain's Repsol posts falling profits but beats expectations

Spain's oil giant Repsol said Thursday that profits fell at the start of the year but that cost-cutting had helped weather the impact of collapsing crude prices.

Investors welcomed the results that beat analysts' forecasts, with Repsol shares surging more than six percent on the Madrid stock exchange in mid-morning trading.

Net profit fell 43 percent in the first quarter to 434 million euros ($497 million) as Repsol, like other oil majors, have battled prices that have plunged more than 60 percent from mid-2014 peaks.

But the company said the quarterly drop was down to one-off revenues in the 2015 period linked to compensation for Argentina's nationalisation of Repsol's subsidiary YFP and a stronger dollar.

"Measures implemented by Repsol to increase efficiency and savings in recent months led the company to achieve positive results despite low oil prices,"it said in a statement.

Adjusted for fluctuating oil prices in the so-called current cost model much-used in the oil industry, Repsol's net profit dropped just over 38 percent to 572 million euros in the first quarter compared to the same three-month period in 2015.

Analysts polled by financial services firm FactSet had pencilled in an average net profit of 167.1 million euros.

In October, the company unveiled a five-year plan to sell 6.2 billion euros of non-strategic assets and cut investments by as much as 38 percent. It also said it would shed 1,500 positions, or six percent of its workforce, by 2018.

Repsol posted a loss of 1.2 billion euros last year after putting aside nearly three billion euros in special provisions for the plunge in crude prices.

It is also seeking to reduce its debt, which stood at 11.98 billion at the end of March, partly due to it having bought Canada's Talisman Energy in 2015.

It also sold its liquefied petroleum gas businesses in Peru and Ecuador.