Spanish-Argentine oil and energy company Repsol said Tuesday fourth-quarter profit fell 14%, due to lower output and higher exploration costs.
Madrid-based Repsol, Spain's and Argentina's largest oil firm by market value, said net income for the fourth quarter dipped to 473 million euros ($622.47 million) from 549 million euros in the same period the previous year.
Adjusted net profit the company's preferred measure of profitability, excluding minority interests and nonrecurring items stood at 547 million euros ($719.85 million) for the three months to Dec. 31, compared with 998 million euros in the same period of 2005.
Overall, Repsol's results came below expectations, according to a London-based trader who asked not to be named. He noted the company's "very weak" exploration and production figures, only partially offset by a stronger contribution from the refining and marketing division.
Repsol shares opened lower in Madrid and were down 1.4% at 24.83 euros ($32.68). The shares have gained about 25% in the past year, despite continued problems with reserves and production, as Repsol has been considered a possible takeover target.
Repsol's total output fell 1.4% in the fourth quarter to 1.1 million barrels of oil equivalent a day.
The company said the decline was mostly due to contract renegotiation in Venezuela and lower oil output in Argentina.
Like most other oil companies, Repsol has been affected by rising exploration costs and rising taxes in the countries where it owns reserves. As a result, the adjusted operating figure in its exploration and production division tumbled 45% in the fourth quarter.