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Repsol’s profits came in above analysts’ expectations in the fourth quarter, buoyed by cost-cutting and improved performance from its refinery business, as well as by higher crude oil prices.

Spain’s top oil producer reported adjusted net earnings of €698m in the fourth quarter, above the €475m expected by analysts polled by Bloomberg, and up from the €453m reported by the company last year.

“In 2016, Repsol reported the highest net income in the last four years due to the strength and flexibility shown by its business units, especially after the acquisition of Talisman, and the efficiency of the action plan put in place to counter the decreases in raw material benchmark prices,” the company said in a statement.

Repsol’s upstream business reported an adjusted net profit of €17m in the quarter, up from a loss of €292m in the same period in 2015. Production decreased to 679,000 barrels of oil equivalent a day during the quarter, from 697,000 during the same quarter of 2015. The average price in the quarter for a barrel of Brent crude increased to $49.30, from $43.80 a year earlier.

Profits at the downstream business rose 12 per cent year on year, from €495m to €554 during the quarter.

The company said that at the end of the fourth quarter it had reduced recurring costs by €1.6bn, exceeding its original full-year target of €1.1bn, and had moved its 2018 target of €2.1bn to 2017. Debt was down by almost €4bn from the end of 2015, to €8.1bn.

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