Spain’s Repsol Cuts Dividend to Keep Investment Grade

Spain’s Repsol Cuts Dividend to Keep Investment Grade
REPSOL headquarters in Arganzuela district in Madrid (Spain). Building designed by Rafael de La-Hoz Castanys and completed in 2013.

Spain’s largest oil company Repsol, lowered its dividend after revealing a $2.2b quarterly loss, fueling fears that cherished investor payouts are on the chopping block as energy companies grapple with a crude-price slump, The Wall Street Journal reported.

Despite having its first annual loss, Repsol stated that it had not made any firm decision on whether it would pursue the sale of its 30% stake in Gas Natural, saying it was not currently a priority, informed Reuters.

The company, which currently stands as the worst-performing oil stock in the last 12 months, according to Bloomberg, hopes to ease any concern among investors by cutting costs. However, that may prove difficult as Repsol has made several efforts over the past year to gear up its credit rating by selling assets and reducing spending on exploration and production, Forbes reported.

The group reported a $1.4b net loss for 2015 as weak oil and gas prices forced it to write down the value of assets.

It is the third time in less than six months that Repsol has taken steps to prop up its finances and protect its credit rating by cutting spending on exploration and production investments by 40% over the next four years.


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