All the materials related with the results and the short-term outlook, including the video presentation from Galp’s management, are available here. Galp’s analyst Q&A session will be held at 14h (Portugal / U.K. time). Additional details below.
“Galp delivered a strong operating and financial performance during the second quarter, under a volatile energy market context. We remain committed to position Galp as a leading energy transition company, providing sustainable energy solutions to our customers. Our competitive low-carbon activities will continue to play a key role in the decarbonization of our traditional businesses.” Filipe Silva, CEO
Second quarter 2023
Galp’s 2Q23 results reflect a strong operating performance during the period, in a context of a less favourable oil, gas, power and refining environment. At the end of the period, Galp maintained a robust financial position, with net debt stable.
RCA Ebitda reached €916 m:
Upstream: RCA Ebitda was €522 m, down YoY, reflecting the de-recognition of the Angolan upstream assets and a less favourable oil and gas prices environment.
On a comparable basis, excluding Angolan assets, current portfolio working interest (WI) production was up 9% YoY, supported by the ramp-up of Coral Sul in Mozambique and improved efficiencies in the Brazilian producing portfolio.
Renewables & New Businesses: RCA Ebitda was €33 m, on a seasonally high generation quarter, although reflecting a lower market price environment YoY.
Industrial & Midstream: RCA Ebitda was €289 m, supported on a strong performance of the midstream businesses, with improved oil, gas and power supply and trading activities. The contribution from industrial activities was robust, despite the lower international oil products’ cracks environment.
Commercial: RCA Ebitda was €68 m, down YoY, impacted by a more pressured environment, namely in the B2B segment in Iberia and in the African marketing activities.
Group RCA Ebit was €643 m, a 30% decrease YoY, following RCA Ebitda.
Taxes amounted to €356 m, up YoY, including €49 m related to the temporary Brazilian levy on oil exports and €9 m from Iberian windfall taxes. RCA net income was €258 m and IFRS net income was €251 m, with an inventory effect of €-23 m and special items of €16 m.
Galp’s adjusted operating cash flow (OCF) was strong at €702 m, reflecting the sound operating performance. Cash flow from operations (CFFO), including working capital and inventory effects, reached €733 m.
Net capex totalled €207 m, mostly directed towards Upstream projects under execution and development in the Brazilian pre-salt, namely Bacalhau and BM-S-11, as well as Coral Sul, in Mozambique.
First half 2023
Galp’s RCA Ebitda was €1,781 m, while OCF was €1,065 m.
Net capex totalled €316 m, mostly directed towards Upstream’s developments and considering €77 m of initial proceeds from the Angolan upstream assets disposal.
FCF amounted to €854 m, with robust cash generation driven by operating performance, although reflecting a high concentration of tax payments made in the first quarter (phasing effect) related to upstream activities in Brazil.
Net debt is down 12% compared to the end of last year, already considering dividends paid to shareholders of €209 m and the €235 m share repurchase programme executed throughout the period, as well as dividends to non-controlling interests of €87 m.
Financial data
Short term outlook
Galp expected 2023 Ebitda and OCF is unchanged, supported by improved business performance and despite the lower than initially assumed commodity price environment.
Net capex at €0.4-0.6 bn, reflecting the lower investments execution registered in the first half and already including the 2023 proceeds from the Angolan upstream divestments
