Spanish gas firm Gas Natural reported a slightly disappointing 7.1 per cent rise in nine-month profit and denied any deal was in the works to merge with oil major Repsol YPF.

Spain’s dominant gas distributor and wholesaler is controlled by Repsol and unlisted savings bank La Caixa, and merger speculation has run rampant since former Gas Natural chairman and La Caixa executive Antonio Brufau took over as Repsol’s executive chairman.
Gas Natural chief executive Enrique Locutura sought to shoot down speculation of a deal and went a step further by denying local media reports that Repsol was about to cede its business of shipping liquefied natural gas to Gas Natural.
“We are not contemplating a merger nor an exchange of midstream assets with Repsol. This is pure media speculation,” Locutura said.
In Brufau’s first day on the job, he told Repsol management it should focus on organic growth and not consider any mergers, even though industry, government and market sources consider a tie-up to be under discussion.
Gas Natural nine-month net profits came in at 451.4 million euros ($573.4 million), helped by a recovery in Latin America and expansion in Italy.
However, the result fell short of most market forecasts, in part because margins declined in the Spanish gas wholesale business due to increased competition, and in Spanish electricity generation due to lower pool prices.
A Reuters poll of 10 analysts had forecast on average bottom-line profits of 462 million euros and a range of 448 million euros to 479 million euros.
The analysts’ forecasts were more in line with the company’s target for annual double-digit profit growth from 2004 to 2008.
Though short of that target after nine months, Gas Natural traditionally sees a pick-up in business in the colder months of
the fourth quarter.
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Wednesday, 3 November 2004 12:09:17
RTRS [nL03568192]