OREANDA-NEWS. November 26, 2013. Dwindling refining margins and the slump in domestic consumer demand negatively impacted results in the third quarter.

Capital expenditures in January-September 2013 amounted to EUR686 million.

Accumulated net income for the CEPSA Group at September 30, 2013, on a clean current cost of supplies (CCS) basis which calculates inventory valuation at replacement cost and excludes special items, totaled EUR295.5 million, slipping 36% (-EUR166.5 million) year-on-year.

The key factors underlying weaker earnings performance across all of the Company’s segments were:

Tighter refining margins and the 5% fall in motor fuel demand, hindering Downstream (Refining & Marketing) results.         

Lower output and sales of crude oil, compounded by the 3% decline in the price of benchmark Brent crude, dragging down Upstream (Exploration & Production) earnings.   

Spain’s new regulations aimed at reforming the electricity sector, which adversely affected Gas & Power results compared to the same period last year.

Applying International Financial Reporting Standards (IFRS) which uses the weighted average cost method of accounting for valuing inventory, CEPSA’s net income in the first three quarters of 2013 stood at EUR236.2 million, evidencing a year-on-year variance of -55% (-EUR294.5 million), with -EUR128 million attributable to price fluctuations in crude and refined product inventories and one-time items.

Out of total net income in the period, earnings generated from business activities abroad, mainly E&P, Petrochemicals and fuel exports, accounted for 63% whereas the rest, 37%, were from domestic-based businesses.

Capital expenditures in January-September 2013 amounted to EUR686 million, up EUR150 million compared to the same period of 2012.  Out of the capital spending in the year, EUR261 million were allocated to E&P. Net financial debt was EUR1,467 million, with a debt-to-equity ratio of19%.

Regarding safety performance indicators and reflecting the Company’s consistent efforts to make safety a priority goal, the accident frequency rate (number of total recordable lost workday injuries per one million hours worked) fell to all-time lows of 2.3.