Galp Energia SGPS (GALP) Q2 2024 earnings summary

Executive summary

• Achieved strong operational and financial performance in 2Q24, with EBITDA RCA of €849m and upstream production at 106 kboepd, supported by portfolio rotation and mid/downstream transformation.

• Upstream divestments in Angola and Mozambique generated significant proceeds, strengthening the balance sheet and supporting future investments.

• Net debt reduced to €1,158m at June 2024, with net debt to EBITDA at 0.35x, reflecting a resilient financial position.

• Strategic execution included advancing Bacalhau FPSO integration, Namibia exploration, and ramping up Sines biofuels and green hydrogen projects.

• Revised 2024 guidance upward for key financial indicators, reflecting strong 1H24 performance and asset sales.

Financial highlights

• 2Q24 EBITDA RCA reached €849m, with OCF at €646m and FCF at €789m, supported by strong operating delivery and asset disposals.

• Net income for 2Q24 was €299m; net capex was €-238m, mainly allocated to growth projects.

• Renewable power generation reached 779 GWh, with 1.5 GW installed capacity.

• Net debt reduced to €1,158m at June 2024, down €242m from year-end 2023.

• Cash and equivalents stood at €2,351m, with undrawn credit facilities of €1,660m.

Outlook and guidance

• FY24 EBITDA guidance raised to over €3.1bn, with OCF above €2.0bn and net capex guidance maintained at €1.0bn (avg. 2023-25).

• Upstream production expected to remain above 105 kboepd until Bacalhau starts in mid-2025, which will boost production by over 30%.

• Dividend per share to increase by 4% to €0.56, with an interim payment of €0.28 in August.

• Additional cash-ins of about $1.2bn expected from Mozambique and Angola divestments in 2024/25.

• Ongoing reassessment of decarbonisation targets due to Namibia discoveries and slow renewables execution.