Galp releases today the results of the third quarter and nine months of 2020.
Third quarter 2020 highlights
CFFO was down 10% YoY to €391 m, following the weaker market environment conditions caused by Covid-19, and despite the signs of recovery already noticed during the period. Investments amounted to €444 m, including the €325 m payment for 75.01% of the 2.9 GW Spanish solar photovoltaic (PV) transaction. FCF was -€79 m, or positive €247 m if adjusted for the solar acquisition payment.
RCA Ebitda of €401 m:
- Upstream: RCA Ebitda was €302 m, down 36% YoY, reflecting the much lower Brent prices and USD depreciation against the Euro, and despite the higher production in the period.
Working interest (WI) production was up 7% YoY to 133.8 kboepd, driven by the higher contribution from the BM-S-11 / 11A projects in Brazil, although partially offset by some operational constraints during the period;
- Commercial: RCA Ebitda of €105 m, down 7% YoY, as a result of the decline in oil products and natural gas demand, and despite the increased contribution from higher-value segments, as well as the cash preservation measures put in place.
- Refining & Midstream: RCA Ebitda was -€12 m, a €45 m decrease YoY, with negative Refining performance, reflecting the harsh refining margin environment, only partially offset by a robust natural gas trading contribution in the Midstream segment;
RCA Ebit was down YoY to €108 m, mostly driven by the weaker operational performance.
RCA net income was -€23 m. IFRS net income was -€106 m, with an inventory effect of €2 m and non-recurring items of -€85 m.
Nine months of 2020
CFFO was €794 m, 45% lower YoY, while RCA Ebitda amounted to €1,161 m, 33% lower YoY, both reflecting the much weaker market conditions during the period.
Total investment reached €724 m, with Renewables & New Businesses accounting for 46% after the €325 m payment for the solar PV acquisition in 3Q20. Upstream accounted for 35% of total capex, mostly related with the continued execution of Tupi (ex-Lula) and Berbigão/Sururu in Brazil, as well as with the Area 4 projects, in Mozambique.
FCF was €299 m, excluding the solar acquisition. Net debt increased to €2.1 bn, considering dividends paid to shareholders and to minorities, as well as the solar transaction payment.
Highlights:
Third quarter
During the period, Galp and ACS completed the transaction for the creation of a Joint Venture to develop 2.9 GW of solar PV projects in Spain. Galp acquired 75.01% of the target solar company, while ACS will keep 24.99%. A joint control governance structure has been set up and the stake will be booked in Galp's financial statements under the equity method.
The 2.9 GW portfolio incorporates 914 MW of operating assets and a pipeline at different stages of development. Total capacity is expected to be fully operational by 2024. Galp has paid €325 m to ACS for the stake acquisition and development costs associated with the portfolio.
Galp’s decarbonisation path
- Galp´s decarbonisation ambitions are embedded in its strategic plan. The Company has established long-term objectives and a pathway towards carbon intensity reduction, by bringing its portfolio in line with the vision for carbon neutrality in Europe by 2050 and committing to reduce the carbon intensity of its activities by at least 15% by 2030 (2017 as reference year).
All documents, including the 3Q20 Results report and presentation, together with the Excel tables, are available on our website through this link.
Conference call:
The conference call for the results’ presentation will be held today at 11:30 am U.K. time. The conference call details are as follows:
UK:+44 (0) 207 192 8000 or +44 (0) 800 376 7922 (UK toll free)
Conference ID: 1546569
A replay of the conference call will be available for one week. The numbers to access the replay of the conference call are +44 (0) 844 571 8951 (UK) or +44 (0) 808 238 0667 (UK toll free).
Webcast:
To access to the webcast (audio stream), please click here