Galp increases oil production and plans a dividend adjustment
The company led by Andy Brown reports gains in oil production and sales in the last quarter of 2021.
Galp increased its oil production by 2% in the last three months of 2021, compared to the previous year. In this period, it reached 123 thousand barrels per day, driven by the performance in Brazil (+2%), with activity in Angola falling 5%. Compared to the previous quarter, this indicator fell 3%. The company is studying a dividend adjustment.
These figures are included in the “4Q21 Trading Update” released this Wednesday by Galp, in which the company reveals that “WI [Working interest] production increased YoY, while QoQ variation reflected concentration of maintenance and inspection activities in the quarter.”
In this document which reports on the macroeconomic, operational and commercial conditions in the fourth quarter of last year, Galp also reports a 22% YoY growth in oil products sales, a 27% rise in electricity sales and a 23% decline in the natural gas segment.
“Oil products sales supported on increased B2B volumes, whilst sales from higher-value B2C segment declined following seasonality. Natural gas and electricity sales evolution mostly following seasonality,” the company said.
In the industrial component, Galp Energia notes that refining raw materials processed (-42% YoY) were “impacted by planned maintenance in the hydrocracker and the unplanned event in one of the furnaces of the atmospheric distillation unit,” adding that the system resumed normal operating conditions in mid-December. On the other hand, the refining margin, which rose to $5.6 per barrel, was “supported by improved international market context, despite the operational constraints in the quarter”.
Finally, in the renewables and new businesses unit, Galp Energia reports renewable energy generation of 213 GWh in the last quarter of 2021 – “reflecting seasonally lower sunlight hours and despite the addition of 36 MW of new solar capacity online in Spain, during the period” -, with installed capacity progressing 4% to 963 MW.
Regarding the financial position, in the information sent this morning to CMVM, the company’s net debt is estimated to increase during the fourth quarter of 2021, and the “strong operational cash flow” registered during this period “will be partially offset by a working capital build, mostly related with temporary effects from high margin account balances at YE21.”
“Considering that these working capital effects are in the process of being reversed during 2022, Galp’s Board of Directors will consider a discretionary adjustment to the guidelines supporting the distributions to shareholders related to the 2021 fiscal year. The adjustment will be announced on the results date,” Galp explains.
