(Reuters) – Portuguese oil and gas company Galp Energia (GALP.LS) reported a 90% jump in adjusted second-quarter profit on Monday, citing soaring oil prices and a sharp increase in its refining margin.
Rapid recovery in demand after pandemic lockdowns and a surge in energy prices driven by Russia’s invasion of Ukraine have boosted profits for oil companies around the globe. read more
Galp said the company “successfully captured the favourable market conditions” in upstream activities, refining and renewables. Upstream refers to exploration and production.
The Lisbon-listed company’s shares were up 0.47% at 9.79 euros in morning trade, outperforming a 1% decline for the broader European Stoxx index for oil producers (.SXEP).
Adjusted net profit was 265 million euros ($270 million) in the three months to June 30, up from 140 million euros a year earlier and above the 224 million euros expected by 21 analysts polled by the company.
Galp’s adjusted upstream core profit rose 88% to 878 million euros, boosted by Brent crude prices that rose 65% year on year to $113.9 a barrel.
The higher prices more than offset a drop in its share of oil and gas production from projects in which it has the stake, down 7% at 119,600 barrels of oil equivalent per day.
Its refining margin jumped to $22.30 a barrel in the quarter, up from $2.40 in the same period last year, when Portugal was under COVID-19 restrictions, and $6.90 in the previous quarter.
The improved global oil market backdrop prompted Galp to raise its guidance on full-year core profit to 4 billion euros, up from 2.7 billion euros, in line with what Jefferies analysts said was a market consensus estimate of about 4.1 billion euros.
Galp, which also runs renewable energy plants, said sales of refined products direct to clients rose 22% year on year to 1.9 million tonnes.