In a future without Repsol-YPF, the only thing Repsol has up its sleeve is upstream organic growth. In other words, new oil findings and deposits. Unless the company unveils a strong strategic plan for 2012-2016, investment banks will calculate an 8.6% drop in revenues for this year and a 18% slash to Repsol?s ebitda.
The declines follow Argentina´s expropriation of YPF holdings, which robbed 21% of Repsol´s revenues and 25% of its gross earnings according to data provided by the company.
For the next two fiscal years, market estimations signal that Repsol´s net revenues will increase at a rate of 9%, which means that in 2013 it should regain its 2011 profit levels. In 2014, its profits should equal around 2.4 billion euros. This amount would give Respsol its best results since an extraordinary year in 2010.
Betting on upstream business
The conclusion that comes from this data is that Spain should grow faster than the sector average, estimated at between 4% and 5%. "It would be great to exceed 5% annual growth, surpassing the sector average, because the largest companies by capitalization are priced low right now, but they don?t have great growth perspectives," said Jorge González from Sabadell.
Analysts consulted on the issue predict that Respsol´s organic growth is being sustained fundamentally by its upstream division, which is the part that requires greater investments, but also yields the biggest margins and profits.
