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Galp Energia
Earnings Release • Apr 8, 2020
1908_iss_2020-04-08_ab7baa63-3eea-458c-8d13-241c08437f57.pdf
Earnings Release
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Recent Developments
In light of the ongoing sharp drop in global oil products demand and prices, Galp is targeting significant reductions in cash spending over the next few quarters.
Some of the initiatives are already in place, whilst others will be implemented as per the evolution of market conditions. Compared to previously announced guidance, Galp's Capex + Opex is now expected to be reduced by over €500 m per annum during each of 2020 and 2021.
1Q20 Trading Update
The information below aims to provide the key macroeconomic, operational and trading conditions experienced by Galp during the first quarter of 2020, as well as the liquidity position as of March 31, 2020.
Margins, prices, production and other data referred to below are currently provisional and may differ from the final numbers which will be reported on April 27.
Financial Position
| 31 Dec., 2019 | 31 Mar., 2020 | ||
|---|---|---|---|
| Cash and equivalents (€bn) | 1.5 | 1.4 | |
| Net debt (€bn) | 1.4 | 1.5 | |
| Undrawn Credit Lines (€bn) | 1.2 | 1.2 |
· Debt redemptions for the remainder of 2020 have been reduced to €50 m (from €250 m on Dec 31, 2019).
Upstream
| 1Q19 | 4Q19 | 1Q20 | Var. YoY | Var. QoQ | |
|---|---|---|---|---|---|
| Working interest production (kboepd) | 112.6 | 136.9 | 131.4 | 17% | (4%) |
| Oil production (kbpd) | 99.5 | 121.8 | 118.1 | 19% | (3%) |
| Net entitlement production (kboepd) | 110.8 | 135.1 | 129.6 | 17% | (4%) |
| Angola (kbpd) | 8.7 | 13.3 | 14.1 | 62% | 6% |
| Brazil (kboepd) | 102.1 | 121.8 | 115.6 | 13% | (5%) |
· Higher working interest production YoY, benefiting from the continued ramp-up of Lula North and Berbigão/Sururu FPSOs in Brazil and supported by block 32 in Angola. QoQ performance reflecting planned maintenance activities in Brazil during the period.
Refining & Midstream
| 1019 | 4Q19 | 1020 | Var. YoY | Var. QoQ | |
|---|---|---|---|---|---|
| Raw materials processed (mmboe) | 22.6 | 26.5 | 26.8 | 18% | 1% |
| Galp refining margin (USD/boe) | 2.3 | 3.3 | 1.9 | (19%) | (43%) |
| Oil products supply (mton) |
3.6 | 4.2 | 4.1 | 13% | (2%) |
| (GWH) NG/LNG supply & trading sales |
22,925 | 23,232 | 17,705 | (23%) | (24%) |
| Irading (GWh) | 9,501 | 8,960 | 5,303 | (44%) | (41%) |
| Sales of electricity to the grid (GWh) | 339 | 354 | 339 | (0%) | (4%) |
1 Includes volumes sold to the Commercial segment.
• Planned maintenance activities performed in Sines' hydrocracker unit during the period.
· NG/LNG supply & trading sales mostly reflecting lower trading contribution.
Commercial
| 1019 | 4019 | 1020 | Var. YoY Var. QoQ | ||
|---|---|---|---|---|---|
| Oil products - client sales (mton) | 2.1 | 2.0 | 1.8 | (13%) | (10%) |
| Natural gas sales - client sales (GWh) | 8.863 | 7,762 | 6.728 | (24%) | (13%) |
| Electricity - client sales (GWh) | 841 | 808 | 900 | 7% | 11% |
• Oil products and natural gas sales to direct clients down, reflecting the market conditions experienced from March onwards. Electricity sales reflecting increased number of clients in Iberia.
Renewables & New Businesses
| 1019 | 4019 | 1Q20 | |||
|---|---|---|---|---|---|
| Renewable generation installed capacity (MW) | 12 | 12 | |||
| Renewable power generation (GWh) | 8.1 | 11.2 | 8.3 | 2% | (26%) |
• Current generation considers a 12 MW wind farm, with no solar PV installed capacity to date (under development).
Market Indicators
| 1019 | 4Q19 | 1Q20 | Var. YoY | Var. QoQ | |
|---|---|---|---|---|---|
| Exchange rate (EUR/USD) | 1.14 | 1.11 | 1.10 | (3%) | (0%) |
| Dated Brent price (USD/bbl) | 63.1 | 63.7 | 50.1 | (21%) | (21%) |
| Japan/Korea Marker LNG price (USD/mmbtu) | 6.6 | 5.8 | 3.6 | (45%) | (37%) |
| Dutch TTF natural gas price (EUR/MWh) | 18.4 | 12.7 | 9.6 | (48%) | (24%) |
| lberian MIBGAS natural gas price (EUR/MWh) | 21.3 | 12.8 | 10.1 | (52%) | (21%) |
| Iberian power pool price (EUR/MWh) | 56.4 | 41.7 | 36.0 | (36%) | (14%) |
Source: Platts/MIBGAS/Bloomberg
1Q20 Consensus | Results Presentation Details
Company collected consensus
The Company's collected consensus for quarterly earnings is scheduled to be opened for submission between April 8 and April 16 and will be made public on April 17.
Results presentation details
Galp's 1Q20 results will be published on April 27, before the opening of Euronext Lisbon.
The Company will hold a conference call and webcast on April 27, at 11:30 a.m. (UK time). The conference call and webcast details are provided below:
Hosted by
- Carlos Gomes da Silva (CEO) .
- Filipe Silva (CFO)
- · Otelo Ruivo (Head of Investor Relations)
Webcast
https://edge.media-server.com/mmc/p/4p7rkage (audio stream)
Dial-in numbers
- UK: +44 (0) 207 192 8000 or +44 (0) 800 376 7922 (UK toll free)
- Portugal: +351 308 800 848
To listen to the conference call, please dial in 10 minutes before the scheduled time to ensure your registration.
Galp Energia, SGPS, S.A. Investor Relations:
Otelo Ruivo, Head Inês Clares Santos João G. Pereira Teresa Rodriques
[email protected] Tel: +351 21 724 08 66 Fax: +351 21 724 29 65
Rua Tomás da Fonseca, Torre A, 1600-209 Lisbon, Portugal www.galp.com
Reuters: GALP.LS Bloomberg: GALP PL
This announcement may including statements, including, without limitation, regording future results, namely cash flows, dividends, not shoreholder retuns; liquidity; copical and operatitures; performance levels only, timing, and outcomes; production rotes; developments of Galøs market; and imports of the COVID-19 partemic on Gold's which may significantly differ depending on a number of factors including suppy and demand for oil, gos, petroleum poducts, power and other market foctors of ecome of government policies and actions, including cctions taken to oddress COVID-19 and to maintin the functioning of national and international economies of the COVID-19 pandemic on people and economies; the impoct of Galp's actions to protect the health and safety of its employees and communities; actions of Gold s competitors and commecial counterporties; the ability to occess short- and long-term debt markets on a timely and offordble of consumers; other legal and political foctors including obtaining necessory permis; unexpected operating events of technical difficulties, the outcome including negotictions with governments ond private entities; and other foctors discussed in Gdp's Management Report & Accounts filed with the Commission (CMVM) for the year ended December 31, 2019 and ovallable on ou website at galp.com. Statements regarding potenting results made at Galp's Copital Markets Day of February 18, 2020 should not be considered to be updated or re-offirmed as of any loter date exept specifically updated or re-offirmed in this release or in subsequent public disclosures. Foward-looking statements other than in respect of historical facts and involve known and unknown risks and uncertainties that could couse octual results, performance on events to differ materially from those expressed or in statements. Important for the couse actual results to of fife from forward-looking statements are refered in Galp's Management Report of the year ended 31 December 2019. Galp and its respective represent atives, agents, employees or avisers do not intend to, and expressy disclaing or obligation to, make or disseminote any supplement, updoteor revision to any of theinformation, opinions or forward-looking statements contained in this announcement to reflect any change in events, conditions or circumstances.