Galp Energy profit down 33% in first nine months 2019 to €403M

  • Lusa
  • 22 October 2019

The oil company had a retraction of 33% in relation to the same period of 2018.

Galp Energia had an adjusted net profit of €403 million in the first nine months of 2019, a retraction of 33% in relation to the same period of 2018, the oil company announced on Tuesday.

The net results in IFRS (International Financial Reporting Standards) stood at 283 million euros, a decrease of 59% compared to the same period of the previous year, the company said today in a statement to the market.

Accumulated investment up to the end of September decreased 4% to 573 million euros when compared to the same period of 2018, with 73% of the value dedicated to exploration and production projects.

As at 30 September 2019, net debt stood at 1.645 billion euros, 92 million euros less than at the end of 2018, reflecting the company’s positive cash flow generation in the first nine months of the year. The ratio of net debt to Ebitda is 0.8x.

Investment to grow until 2022

Galp expects to invest between 1.0 and 1.2 billion euros per year until 2022, of which more than 40% in energy transition projects, including an increase in the proportion of natural gas, announced the oil company on Tuesday.

Ahead of the presentation of Q3 results, Galp presented an update of its investment strategy for the coming years, in which it reinforces “the investment values to be applied in projects that promote the transition to a lower carbon intensity energy model”.

These projects “include increasing the proportion of natural gas in the production mix, as well as the development of a competitive business of electricity generation through renewable sources”, says the oil company.

The average investment in renewable energy and in new businesses should represent between 10% and 15% of all capital allocation, the company specifies.

In addition to focusing on new opportunities, Galp’s investments in upstream remain “focused on the development of high-potential projects, with the average breakeven of the portfolio remaining at around 25 cents per barrel” and in downstream it intends to optimise and strengthen its asset base in refining and marketing, as well as selectively explore new value-added opportunities that will allow it to increase the competitiveness of its portfolio.

In financial terms, Galp intends to continue in a “robust position”, stating that “all capital allocation actions should be in line with the commitment to maintain a Net Debt/Ebitda ratio below 2x”.

Galp foresees an annual increase of 10% in the dividend per share over the next three years (2019-21).