Repsol Boosts Shareholder Payout, Protects Creditors: BI Video

Repsol announced an increase in the shareholder payout ratio at its investor day, though the impact on leverage should be offset by a reduction in net capital spending through 2028-- with the low carbon energy group bearing the lion's share of the cuts. Leverage therefore looks like holding to a steady upward path back into the 15-20% target zone that Repsol sees as compatible with its objective to maintain its existing ratings of BBB+/Baa1. The spending cuts have lowered the dividend break-even oil price to about $50, from $58, which improves Repsol's resilience to low oil prices-- along with the cash-flow linked buybacks and flexibility to trim spending even further. Repsol may need $75 oil to move into debt reduction mode, though a potential liquidity event for Repsol E&P could create some balance sheet headroom.