All the materials related with the results, including the video presentation from Galp’s executives, are available here.
“Our teams and asset base continued to deliver a robust performance during the second quarter of 2024, despite the still volatile commodities price environment. This performance, together with our continual disciplined capital allocation, further strengthened our financial position.
During the period, Galp completed the Angolan upstream asset disposal and announced the divestment from Area 4, in Mozambique. These actions allow us to crystalise value, reduce risk and focus on higher return projects aligned with Galp’s strategy: continue de-risking and growing our upstream from low cost & low carbon intensity projects, whilst transforming our integrated mid and downstream positions."
Filipe Silva, CEO
Second quarter 2024
During 2Q24, Galp delivered an overall robust set of results, with operating cash generation, disciplined investments and divestment proceeds leading to a significant net debt reduction.
RCA Ebitda reached €849 m:
- Upstream: RCA Ebitda was €531 m, supported by resilient production levels and the competitive cost base of the Brazilian portfolio.
Note: 2024 RCA figures exclude the contribution from Mozambican upstream operating activities, booked as non-current assets held for sale.
- Industrial & Midstream: RCA Ebitda was €226 m, supported on high utilisation of the refining system and continued strong Midstream contribution namely from oil & natural gas supply and trading activities.
- Commercial: RCA Ebitda was €79 m with the resilient contribution from Iberian activities and a recovery of African marketing contribution.
- Renewables: RCA Ebitda was €5 m in the quarter, penalised by the highly pressured electricity market prices in Iberia. During the period, Galp started 100 MW of solar capacity, reaching c.1.5 GW currently in commercial operation in Iberia.
Group RCA Ebit was €660, whilst RCA net income was €299 m.
Galp’s adjusted operating cash flow (OCF) was €646 m, following the robust business performance. Cash flow from operations (CFFO) reached €562 m.
Investments amounted to €241 m, directed mainly towards the execution of upstream projects, namely Bacalhau, and industrial low carbon developments in Sines, in particular the construction works in the Advanced Biofuels unit (HVO/SAF). During the period, divestment proceeds amounted to €518 m, mainly related to the completion of the Angolan upstream assets’ farm-out.
Net debt decreased €348 m to c.€1.2 bn, considering the strong operating performance as well as the proceeds collected, and after dividend to minorities of €93 m, the payment of the second semi-annual dividend tranche of €206 m and share buybacks of €85 m.
First half 2024
Galp’s RCA Ebitda was €1,788 m, while OCF was €1,205 m, reflecting a robust operating performance during the period, and now excluding any contribution during the period from Coral South FLNG in Area 4, Mozambique.
Net capex totalled €61 m, with organic capex mostly directed towards upstream projects under development in Brazil, namely Bacalhau, and to the initial exploration and appraisal campaign in Namibia, while accounting with the proceeds collected from divestments completed during the period (Angola upstream).
FCF amounted to €838 m, with net debt down 17% compared to the end of 2023, considering dividends to non-controlling interests of €95 m, dividends paid to shareholders of €206 m and €133 m invested through share buybacks.
Outlook
Galp revised some of its key operating and financial guidance for 2024, to reflect the exclusion of Coral South’s contribution and the performance during in the first half of 2024. Macro variables for the full year remain unchanged.
| Assumptions for 2024 |
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Financial indicators - FY2024 Guidance (€ bn) |
Before |
Now |
| Brent |
$/bbl |
80 |
|
|
RCA Ebitda |
c.3.1 |
>3.1 |
| Realised refining margin |
$/boe |
c.8 |
|
|
OCF |
c.2.0 |
>2.0 |
| Iberian PVB natural gas price |
€/MWh |
c.30 |
|
|
Net capex (avg. 2023-25) |
c.1.0 |
c.1.0 |
| Iberian solar price |
€/MWh |
c.50 |
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|
| Average exchange rate |
EUR:USD |
1.10 |
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|
|
| WI production |
kboepd |
>105 |
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Related to the 2024 fiscal year, the Board of Directors will propose to the Annual General Shareholders Meeting approval for a €0.56/share dividend, a 4% increase YoY following the guidelines in place for shareholders’ distributions. An interim dividend of €0.28/share will be paid in August 2024.
Financial Data
Due to the reclassification of certain elements as special items, primarily associated with assets / liabilities held for sale given recent divestment agreements, the financial figures for 1Q24 have been duly adjusted.
| €m (RCA, except otherwise stated) |
|
|
|
|
|
| Quarter |
|
First Half |
| 2Q23 |
1Q24 |
2Q24 |
% Var. YoY |
|
2023 |
2024 |
% Var. YoY |
| 916 |
939 |
849 |
(7%) |
RCA Ebitda |
1,781 |
1,788 |
0% |
| 522 |
569 |
531 |
2% |
Upstream |
1,070 |
1,100 |
3% |
| 289 |
304 |
226 |
(22%) |
Industrial & Midstream |
524 |
530 |
1% |
| 68 |
62 |
79 |
17% |
Commercial |
139 |
142 |
2% |
| 33 |
9 |
5 |
(84%) |
Renewables |
67 |
14 |
(79%) |
| 5 |
(5) |
7 |
48% |
Corporate & Others |
(19) |
3 |
n.m. |
| 643 |
761 |
660 |
3% |
RCA Ebit |
1,317 |
1,421 |
8% |
| 405 |
470 |
429 |
6% |
Upstream |
842 |
899 |
7% |
| 218 |
275 |
191 |
(12%) |
Industrial & Midstream |
417 |
466 |
12% |
| 4 |
32 |
48 |
n.m. |
Commercial |
48 |
80 |
66% |
| 23 |
(2) |
(8) |
n.m. |
Renewables |
46 |
(10) |
n.m. |
| (5) |
(14) |
(1) |
(72%) |
Corporate & Others |
(36) |
(15) |
(58%) |
| 258 |
325 |
299 |
16% |
RCA Net income |
508 |
624 |
23% |
| 16 |
85 |
93 |
n.m. |
Special items |
208 |
178 |
(15%) |
| (23) |
(35) |
(30) |
27% |
Inventory effect |
(113) |
(65) |
(43%) |
| 251 |
374 |
362 |
44% |
IFRS Net income |
603 |
737 |
22% |
| 702 |
559 |
646 |
(8%) |
Adjusted operating cash flow (OCF) |
1,065 |
1,205 |
13% |
| 326 |
214 |
320 |
(2%) |
Upstream |
400 |
534 |
34% |
| 248 |
304 |
231 |
(7%) |
Industrial & Midstream |
483 |
535 |
11% |
| 43 |
43 |
78 |
82% |
Commercial |
85 |
121 |
43% |
| 55 |
9 |
5 |
(91%) |
Renewables |
92 |
14 |
(85%) |
| 733 |
395 |
562 |
(23%) |
Cash flow from operations (CFFO) |
1,233 |
957 |
(22%) |
| (207) |
(299) |
238 |
n.m. |
Net Capex |
(316) |
(61) |
(81%) |
| 503 |
50 |
789 |
57% |
Free cash flow (FCF) |
854 |
838 |
(2%) |
| (87) |
(2) |
(93) |
8% |
Dividends paid to non-controlling interests |
(87) |
(95) |
10% |
| (209) |
- |
(206) |
(1%) |
Dividends paid to Galp shareholders |
(209) |
(206) |
(1%) |
| (159) |
(48) |
(85) |
(46%) |
Share buybacks |
(235) |
(133) |
(43%) |
| 1,363 |
1,506 |
1,158 |
(15%) |
Net debt |
1,363 |
1,158 |
(15%) |
| 0.42x |
0.45x |
0.35x |
n.m. |
Net debt to RCA Ebitda1 |
0.42x |
0.35x |
n.m. |
| 1Ratio considers the LTM Ebitda RCA (€3,302 m), which includes the adjustment for the impact from the application of IFRS 16 (€263 m). |
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Conference call details
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