Galp’s profit sinks 72% to 29 million by March

The drop in oil prices led Galp Energia’s results to plunge in the first quarter. The oil company’s profit fell by 72% to 29 million euros in the first three months of the year.

Galp closed the first quarter of this year with an RCA net profit – which excludes non-recurring events – of 29 million euros, down by 72% from 103 million euros in the same period last year.

The IFRS net profit was negative 257 million euros, down from 8 million euros in the same period last year, with the company led by Carlos Gomes da Silva justifying the fall with “a stock effect of -278 million euros resulting from the sharp decline in commodity prices during the period.”

Consolidated EBITDA fell by 5% year-on-year to 469 million euros, penalised by upstream activity. In this segment, EBITDA fell by 24% to 286 million euros, “affected by the sharp decrease in oil prices in the period,” the company once again stresses.

For the company led by Carlos Gomes da Silva, the first three months of the year were marked by a 17% increase in oil and natural gas production, to 131,400 barrels per day, with the support of oil exploration activity in Brazil and also in Angola, with Galp highlighting “the increase in Lula’s contribution and the FPSO ramp-up allocated to the Berbigão/Sururu area, as well as the higher contribution of the kaombo project in block 32, in Angola.”

In the refining and distribution area, operating income grew from 64 million euros to 90 million euros, year-on-year, in the first three months of this year, “with the midstream contribution offsetting the lower performance of refining activity.”

The oil company explains that its refining margin declined from USD 2.3/barrel in the first quarter of last year to USD 1.9/barrel in the first three months of 2020, “having been affected by the challenging refining environment and planned maintenance activities performed in the Sines refinery hydrocracker.”

Sales of oil products, on the other hand, were down by 13% year-on-year, with the oil company explaining that this drop reflects “lower demand in most segments in Iberia during March, resulting from measures to control the Covid-19 outbreak. Even so, the operating profit in this area was 90 million euros, remaining “stable, mainly due to the activities in Spain.”

Galp Energia also notes that its total investment amounted to 144 million euros during the quarter, of which 72% was allocated to the Upstream business, mainly in the BM-S-11 block and in Mozambique. Net oil debt fell by 107 million euros to 1.496 billion euros between the first quarter of last year and this year, despite an increase of 61 million euros compared to the end of 2019.