Today, Repsol
held its Annual General Shareholders' Meeting, at which its Chairman, Oscar
Fanjul, and its Vice-Chairman, Guzm�n Solana, analysed the company's current
situation, results and strategy.
In his speech, the Chairman welcomed the
new shareholders who joined the company through the Repsol public share
offering. He drew attention to the fact that profits and dividends have
increased continuously since the company was founded in 1987 and that
shareholders investing in the company's flotation in 1989 have received an
accumulated return of 18% per annum.
Repsol's net income for 1994 reached
96,803 million pesetas, showing an increase of 20.8%, and net cash flow was
221,664 million pesetas, 15.2% up, whilst net debt remained practically stable
after investing 190,852 million pesetas in projects of great importance for the
company's future. The Chairman underlined that the strict profitability
requirements governing investments have made it possible to effect a total
capital expenditure of 1,300 billion pesetas since 1987, with an average return
of 19%.
The Repsol Annual General Meeting approved the payment of a gross
dividend of 140 pesetas per share. This is a dividend increase of 21.7% over the
amount paid out last year. A 58 pesetas interim dividend has already been paid
out in January 1995, and the remaining 82 pesetas will be paid out from July 6th
next.
The Annual General Meeting also approved the proposal to create the
Repsol Foundation to promote training and research in the area of science and
technology, especially in the hydrocarbons sector. This Foundation will be
founded with a company capital of 2,700 million pesetas, for which provision has
been made, and which will be disbursed over several financial years.
The
Chairman underlined "Repsol's commitment to obtaining the highest possible
return on the funds confided by its shareholders", and explained in detail the
company's methods of operation to achieve this objective. In his speech, he made
a special reference to steps taken regarding the Board of Directors in order to
strengthen it as the company's governing body, pointing out that, to this end,
By-Laws had been passed to reinforce the responsibility and independence of the
administrators to control and govern company performance. Mr. Fanjul also
mentioned the reorganization and reinforcing of the Board and the creation of
three Commissions to the Board itself: the Delegate Commission, the Top
Management Compensations and Development Commission and the Auditing
Commission.
On the other hand, the Chairman also insisted on the
"company's commitment to information and clarity", recalling the efforts made to
produce an Annual Report that is useful for the shareholder, and the birth in
1994 of the "Shareholders' Information Bulletin", as a new way of communicating
with the company's owners.
Our aim for the future is to continue
obtaining the highest profitability, and in order to achieve this, "Repsol
reaffirms its vocation as a company belonging to the energy sector, carrying out
its activity in the areas of oil, chemicals and gas. Only in order to supplement
this, providing it proves sufficiently profitable, will it undertake projects
such as cogeneration and gas generation, considering this as an extension to and
natural coverage for its main businesses". It will also insist in its policy of
consistent cost reduction, which has produced a total fall in expenses,
excluding feedstocks, of over 47 billion pesetas over the period 1991 to 1994
and following a rise in productivity over this same term of over 50%.
The
company's strategy is directed towards an ever better balanced structure in the
generating of resources, permitting further growth in spite of adverse
conditions. Thus the gas and exploration and production activities will continue
to grow and increase their weight in the company. Furthermore, international
presence in the gas field will continue to rise and there will be higher
production and reserves, together with a more efficient vertical integration of
this business.
Other basic aspects of company strategy will be to spread
commercial activity abroad and to take up a place in power generating in Spain.
With regard to the former, having begun the marketing of LPG, Repsol is now
fully developing all its businesses in Portugal and the South of France and is
entering several South American countries. As for the latter, we have a
cogeneration and power generation capacity of over 1,200 megawatts at our
refineries, and it is hoped to progress with this, probably in association with
electricity companies.
As indicated by Repsol's Vice-Chairman, Guzm�n
Solana, the Strategic Plan up to the year 2000, contemplates investments of over
1,000 billion pesetas, broken down into 260 billion for exploration and
production, mostly to develop existing fields; 480 billion for refining,
logistics and marketing, 55 billion for chemicals - including the construction
of a new polypropylene plant and re-vamping of the existing units in
polyethylene and polypropylene, and a continually high investment of around 375
billion pesetas is planned in the gas sector.
In his speech, the
Vice-Chairman made a detailed analysis of the 1994 results, noting the
considerable growth of the gas activity and the recovery shown by chemicals. He
also remarked that, if current good margins are sustained, operating income for
this year is expected to reach a record level.
Finally, as for the first
quarter of 1995, results corroborate the line of maintained growth achieved over
recent years. Net income was 24.8% higher than year-earlier figures, at 32,777
million pesetas, whereas operating income grew by 32.2% to reach 61,422 million
pesetas. Net cash-flow amounted to 67,078 million pesetas, 17.5% up on last
year.
In 1994, overall investments amounted to 190,852 million pesetas.
80 billion pesetas of this went to the refining and marketing area, mainly for
the acquisition and construction of service stations and to improve product
quality. More than 55 billion pesetas were spent on the gas activity: 23 billion
of this for the Enagas transaction and the rest to build transmission grids and
distribution infrastructure. A moderate outlay of 6 billion pesetas was made in
chemicals, mostly to improve productivity and to cut costs, and several
re-vamping projects have been commenced and will go into production next year.
These will allow us to take full advantage of the favourable cycle currently
affecting this activity.
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