4Q22 Trading Update

Source Press Release
Company Galp Energia 
Tags Renewable Energy, Carbon Capture (CCS/CCUS), Hedging, Production/Development, Upstream Activities, Capital Spending, Guidance, Financial & Operating Data
Date January 30, 2023

Galp’s 4Q22 results will be published on February 13, before the opening of Euronext Lisbon, together with a management presentation. On that day, the Company will hold an analysts’ conference call at 14:00 (Lisbon/London time). 

Consolidated earnings and financial position 

  • Expecting a robust operational cash flow (OCF) generation and working capital release, which includes the unwind of all gas derivatives margin account balances, as expected. 
  • Net debt expected to be reduced to c.€1.6 bn at the end of quarter.
  • Still assessing the impact from windfall taxes in Portugal and Spain. Any estimated impacts to be booked as special items.

Upstream

  4Q21  3Q22  4Q22  Var. YoY  Var. QoQ 
Working interest production (kboepd)  124.8  127.6  130.4  5%  2% 
Oil production (kbpd)  111.2  114.8  115.3  4%  0% 
Net entitlement production (kboepd)  123.0  126.1  128.6  5%  2% 
Angola (kbpd)  10.7  10.3  10.8  1%  5% 
Brazil (kboepd)  112.3  115.8  115.8  3%  0% 
Mozambique (kboepd)  0.1  1.9  n.m. 
  • Working interest production up QoQ, considering some contribution from Coral FLNG in Mozambique, which had its first cargo in November.
  • Oil hedges covered 1.6 mbbl during 4Q22 (13% of production).

Commercial

  4Q21  3Q22  4Q22  Var. YoY  Var. QoQ 
Oil products - client sales (mton)  1.8  2.0  1.8  (1%)  (9%) 
Natural gas sales - client sales (GWh)  4,509  4,180  4,270  (5%)  2% 
Electricity - client sales (GWh)  1,121  979  940  (16%)  (4%) 
  • Oil products sales slightly declined YoY, halting the post pandemic recovery trend, following reduced demand in Iberia, especially in the B2B segment.
    • Natural gas and electricity sales impacted by activity reduction, especially in the B2B segment, as well as lower consumption in the B2C segment given the warmer temperatures.
    • 4Q22 RCA Ebit to include an impairment of c.€100 m in retail distribution assets.

Industrial & Energy Management

  4Q21  3Q22  4Q22  Var. YoY  Var. QoQ 
Raw materials processed (mboe)  13.6  22.9  20.5  51%  (10%) 
Galp refining margin (USD/boe)  5.6  7.7  13.5  n.m.                         n.m. 
Oil products supply1 (mton)  3.7  4.3  3.8  2%  (13%) 
NG/LNG supply & trading volumes1 (TWh)  14.3  13.1  12.7  (11%)  (3%) 
Trading (TWh)  6.6  5.6  5.5  (17%)  (2%) 
Sales of electricity from cogeneration (GWh)  119  177  166  39%  (6%) 

1 Includes volumes sold to the Commercial segment.

  • Refining raw materials processed decreased QoQ, following the planned maintenances activities. Refining margin higher QoQ, capturing the more favourable market environment.
  • Refining margin hedges covered 5.6 mboe during 4Q22 (27% of throughput), with an expected impact of c.€80 m at the Ebitda level.
  • Matosinhos’ site transformation project with a c.€60 m provision (impact in RCA Ebit).
  • NG/LNG supply & trading impacted by additional sourcing restrictions and challenging European natural gas environment.

Renewables & New Businesses

4Q21  3Q22  4Q22  Var. YoY  Var. QoQ 
Renewable installed capacity1 (GW)     
Gross (100%)  1.0  1.3  1.4  42%  7% 
Equity to Galp  0.7  1.3  1.4  89%  7% 
Renewable generation (GWh)     
Gross (100%)  213  693  307  44%  (56%) 
Equity to Galp  157  627  307  95%  (51%) 
Galp solar sale price (EUR/MWh)  198  126  101  (49%)  (20%) 

1 Installed capacity at the end of the period.

  • Renewables installed capacity reached 1.4 GW, following the commercial start-up at year-end of c.100 MW of solar projects in Iberia.
    • Gross renewable energy generation down QoQ, reflecting seasonally lower sunlight hours. All current operating portfolio fully owned by Galp since July 2022.

Market Indicators

  4Q21  3Q22  4Q22  Var. YoY  Var. QoQ 
Exchange rate (EUR/USD)  1.14  1.01  1.02  (11%)  1% 
Dated Brent price (USD/bbl)  79.8  100.8  88.9  11%  (12%) 
Japan/Korea Marker LNG price (EUR/MWh)  104.8  152.3  100.1  (5%)  (34%) 
Dutch TTF natural gas price (EUR/MWh)  92.0  196.2  94.4  3%  (52%) 
Iberian MIBGAS natural gas price (EUR/MWh)  94.2  138.5  75.4  (20%)  (46%) 
Iberian power baseload price1 (EUR/MWh)  211.1  146.3  113.2  (46%)  (23%) 
Source: EvaluateEnergy® ©2024 EvaluateEnergy Ltd