Portugal’s Galp Raises Earnings Outlook after Hefty 3Q Profit

Portuguese oil company Galp Energia on Monday raised its earnings outlook for 2021 after higher oil prices and positive refining margins buoyed profitability in the third quarter.

Galp said its adjusted core earnings or EBITDA in this year as a whole would exceed 2.3 billion euros ($2.7 billion), compared with its previous forecast of 2 billion euros.

The company improved its guidance after higher oil prices and positive refining margins allowed it to book a higher than expected third-quarter adjusted net profit of 161 million euros, compared with a 23 million net loss a year ago.

Analysts had expected a net adjusted profit of 144 million euros, according to an average of 22 forecasts compiled by the company.

Adjusted EBITDA in the quarter rose 51% to 607 million euros, a little below the 619 million euro forecast.

Its upstream adjusted EBITDA increased 73% to 522 million euros, supported by higher oil prices which more than offset lower production.

Galp’s share of oil and gas production from projects in which it has the stake, namely those offshore Brazil, fell 4% in the quarter to 128,200 barrels of oil equivalent per day.

Brent oil prices rose to an average of $73.4 a barrel in the third quarter from $42.9 a year ago, supported by a global economic recovery and the prospect of higher fuel demand.

Galp said its sales of refined products to direct clients rose 15% to 1.8 million tonnes, reflecting the gradual recovery in Iberia.

The company also said its refining margin rebounded to $4.0 a barrel in the third quarter, from a negative margin of $0.70 in the same period last year.

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