All the materials related with the results and the short-term outlook, including the video presentation from Galp’s executives, are available here.
“In 2023, Galp achieved a robust set of results driven by a strong operational performance across businesses. These results support our continued investment towards world-class sustainable growth.
Galp started building in Sines one of the largest green H2 electrolysers project in Europe and a 270 ktps HVO/SAF unit, key stepping stones to integrate low-carbon energies, and to transform our industrial and commercial operations. Simultaneously, we made strides in developing best in class upstream projects in Brazil and tapping high-potential assets in Namibia.
Galp remains committed to a responsible and focused strategy execution, delivering growth opportunities that ensure the value creation required for a credible decarbonization path, without compromising our profitability and competitiveness whilst ensuring a strong financial position along the way.
Filipe Silva, Galp's CEO
Fourth quarter 2023
Galp delivered a robust set of results, driven by solid Upstream operating performance and continued supportive Midstream contribution, although limited in refining by the large planned turnaround executed in Sines. At the end of the period, Galp maintained a strong financial position with net debt to Ebitda at 0.4x.
RCA Ebitda reached €720 m:
- Upstream: RCA Ebitda was €599 m, down YoY, reflecting the de-recognition of the Angolan upstream assets and a less favourable oil and gas pricing environment. On a comparable basis, in Brazil and Mozambique, working interest (WI) production was up 8% YoY, supported by the ramp-up of Coral Sul FLNG, in Mozambique, and by the continued increased availability and efficiency from the operating units in Brazil.
- Renewables & New Businesses: RCA Ebitda was €21 m in a seasonally low generation quarter, reflecting a lower market price environment YoY, but benefitting from added operating capacity.
- Industrial & Midstream: RCA Ebitda was €63 m, with a robust contribution from Midstream across oil, gas and power trading, more than offsetting a negative contribution from Industrial as result of the planned large turnaround in the Sines refinery.
- Commercial: RCA Ebitda was €54 m, in a seasonally lower demand quarter in Iberia, although reflecting a YoY increased contribution of non-fuel and lower carbon business, namely on convenience and gas & power activities.
Group RCA Ebit was €411 m, mostly following RCA Ebitda. RCA net income was €284 m.
Galp’s adjusted operating cash flow (OCF) was €488 m, reflecting sound operating performance. Cash flow from operations (CFFO), including working capital and inventory effects, reached €457 m.
Net capex totalled €382 m, with investments mostly directed towards Upstream projects under development in the Brazilian pre-salt and the exploration campaign in Namibia, as well as to the start of construction of the advanced biofuels plant and the 100MW electrolyser unit in Sines.
After payment to non-controlling interests and share buybacks, net debt increased by €189 m during the period.
Full Year 2023
Galp’s RCA Ebitda was €3,558 m, while OCF was €2,269 m, reflecting a robust operating performance across all business units.
Economic capex amounted to €1,052 m, mostly directed towards Upstream’s growth, downstream transformation and renewables capacity construction. Investments in Portugal represented 1/3 of total spending, mostly allocated to the FID of two world-class projects in Sines, namely 100 MW electrolysers for green hydrogen and an advanced biofuels unit (HVO/SAF), growth in electric mobility and modernization of the retail network.
Net capex totalled €859 m, considering €209 m of initial proceeds related to the ongoing disposal of the Angolan upstream assets (completion now expected during 1H24).
Free Cash Flow amounted to €1,373 m, more than covering dividends to non-controlling interests of €169 m, dividends paid to shareholders of €422 m and €500 m of share buybacks.
Net debt was reduced to €1.4 bn, further strengthening Galp’s financial position whilst executing an ambitious growth and transformational investment plan.
Following the capital allocation guidelines in place, Galp’s Board of Directors will propose to the Annual General Shareholders Meeting a dividend increase of 4% in 2024 to €0.54 per share and, based on 2023 performance, a €350 m share repurchase programme with the purpose of share capital reduction, planned to be executed in 2024.
Financial Data
| €m (RCA, except otherwise stated) |
|
|
|
|
| Quarter |
|
Twelve Months |
| 4Q22 |
3Q23 |
4Q23 |
% Var. YoY |
|
2022 |
2023 |
% Var. YoY |
| 951 |
1,057 |
720 |
(24%) |
RCA Ebitda |
3,849 |
3,558 |
(8%) |
| 791 |
594 |
599 |
(24%) |
Upstream |
3,083 |
2,263 |
(27%) |
| 17 |
43 |
21 |
24% |
Renewables & New Businesses |
50 |
131 |
n.m. |
| 118 |
342 |
63 |
(46%) |
Industrial & Midstream |
451 |
929 |
n.m. |
| 42 |
111 |
54 |
29% |
Commercial |
298 |
303 |
2% |
| (17) |
(32) |
(17) |
4% |
Others |
(34) |
(69) |
n.m. |
| 475 |
741 |
411 |
(13%) |
RCA Ebit |
2,345 |
2,469 |
5% |
| 602 |
469 |
428 |
(29%) |
Upstream |
2,229 |
1,739 |
(22%) |
| 5 |
(27) |
(1) |
n.m. |
Renewables & New Businesses |
32 |
18 |
(44%) |
| (15) |
258 |
19 |
n.m. |
Industrial & Midstream |
66 |
693 |
n.m. |
| (104) |
78 |
19 |
n.m. |
Commercial |
75 |
145 |
94% |
| (13) |
(37) |
(54) |
n.m. |
Others |
(57) |
(126) |
n.m. |
| 273 |
210 |
284 |
4% |
RCA Net income |
881 |
1,002 |
14% |
| 388 |
24 |
45 |
(88%) |
Special items |
560 |
278 |
(50%) |
| (206) |
69 |
6 |
n.m. |
Inventory effect |
35 |
(38) |
n.m. |
| 455 |
303 |
336 |
(26%) |
IFRS Net income |
1,475 |
1,242 |
(16%) |
| 701 |
716 |
488 |
(30%) |
Adjusted operating cash flow (OCF) |
2,788 |
2,269 |
(19%) |
| 529 |
363 |
417 |
(21%) |
Upstream |
2,022 |
1,179 |
(42%) |
| 19 |
43 |
3 |
(83%) |
Renewables & New Businesses |
49 |
138 |
n.m. |
| 116 |
252 |
29 |
(75%) |
Industrial & Midstream |
459 |
764 |
66% |
| 56 |
79 |
54 |
(4%) |
Commercial |
290 |
218 |
(25%) |
| 1,107 |
686 |
457 |
(59%) |
Cash flow from operations (CFFO) |
3,071 |
2,376 |
(23%) |
| (342) |
(161) |
(382) |
12% |
Net Capex |
(1,266) |
(859) |
(32%) |
| 737 |
497 |
22 |
(97%) |
Free cash flow (FCF) |
1,681 |
1,373 |
(18%) |
| (100) |
(2) |
(80) |
(19%) |
Dividends paid to non-controlling interests |
(245) |
(169) |
(31%) |
| - |
(213) |
- |
n.m. |
Dividends paid to Galp shareholders |
(420) |
(422) |
1% |
| (34) |
(72) |
(192) |
n.m. |
Share buybacks |
(150) |
(500) |
n.m. |
| 1,555 |
1,211 |
1,400 |
(10%) |
Net debt |
1,555 |
1,400 |
(10%) |
| 0.4x |
0.3x |
0.4x |
n.m. |
Net debt to RCA Ebitda1 |
0.4x |
0.4x |
n.m. |
| 1 Ratio considers the LTM Ebitda RCA (€3,301 m), which includes the adjustment for the impact from the application of IFRS 16 (€257 m). |
| |
|
|
|
|
|
|
|
Short Term Outlook
Galp is providing key operating and financial guidance for 2024, in accordance with its updated views and macro assumptions.
| Assumptions for 2024 |
|
|
|
| Brent |
|
$/bbl |
80 |
| Realised refining margin |
|
$/boe |
c.8 |
| Iberian PVB natural gas price |
|
€/MWh |
c.30 |
| Iberian solar price |
|
€/MWh |
c.50 |
| Average exchange rate |
|
EUR:USD |
1.10 |
| |
|
|
|
| Financial indicators |
|
|
|
| RCA Ebitda |
|
€ bn |
c.3.1 |
| Upstream |
|
€ bn |
c.2.1 |
| Renewables & NB |
|
€ m |
c.60 |
| Industrial & Midstream |
|
€ m |
>700 |
| Commercial |
|
€ m |
c.300 |
| OCF |
|
€ bn |
c.2.0 |
| Net capex (avg. 2023-25) |
|
€ bn |
c.1.0 |
| |
|
|
|
Conference call details
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