Portugal's Galp Q1 profit core falls by 29%, as refinery margins are halved

Galp Energia, a Portuguese company, reported a 29% decline in its adjusted core profit for the first quarter on Monday. This was due to a drop in oil production and a decrease in refining profits that were less than half of what they had been a year earlier.

The adjusted earnings before taxes, depreciation, and amortization (EBITDA), which is the average expected by 17 of the company's analysts, fell to 669 millions euros ($761million), a little above the 666 million euro average.

The refining margins dropped to $5.60 per barrel from $12 in the previous quarter.

In a joint statement, Maria Joao Carioca e Joao marques da Silva stated that the company had shown "operational resilience in an increasingly volatile marketplace."

Early in the trading session, shares fell by 3.3%.

The company reported that the overall quarterly adjusted net profit was down 41% compared to the previous year period, at 192 million euro. However, this was higher than the 185 millions euros expected by analysts as it benefited from lower tax rates.

The core profit of the upstream unit, consisting of stakes in deepwater offshore fields, was down 32% on an annual basis in the first quarter, to 385 millions euros.

Galp stated that the 221 million euro capex upstream was mainly directed at the Namibian exploration and appraisal campaign and the developments on the Brazilian offshore coast.

The company's full-year production forecast remained unchanged at 105,000 bpd. "Stoppage days in the first quarter represent over 40% of the maintenance plan for the entire year."

The company reported that its oil and gas working interest production for the first quarter fell 3%, to 104,000 barrels a day (bpd). Brent crude prices fell from $83.2 per barrel to $75.7 on average in the first quarter.

Galp announced in February that it had discovered a significant amount of light oil-and-gas condensate at a fifth Mopane well off the coast Namibia. This discovery opened up new opportunities for exploration.

(source: Reuters)