Portuguese oil and gas company Galp Energia reported a 16% increase in adjusted third-quarter profit on Monday, thanks to soaring oil prices and a near-doubling of its refining margin.
Oil and gas companies around the world received a boost after Russia's invasion of Ukraine sent energy prices soaring just as demand was rapidly recovering with the lifting of pandemic restrictions.
Galp's July-September adjusted net profit was 187 million euros, up from 161 million euros a year earlier and above the 177 million euros expected by 21 analysts polled by the company.
In a statement, Galp said its results reflected a strong operational performance across its businesses, highlighting how upstream and industrial activities had benefited from a strong macro environment. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 29% to 784 million euros, though fell short of the average forecast of 830 million euros.
Higher oil prices lifted its upstream adjusted EBITDA by 17% to 612 million euros, despite its share of oil and gas production from projects in which it has a stake remaining almost stable at 127,600 barrels of oil equivalent per day. Brent oil prices rose to an average of $110.8 a barrel in the third quarter from $73.4 a year ago, Galp said.
Galp said last week it could face further sourcing disruptions after Nigeria LNG, the company's main supplier of liquefied natural gas, declared force majeure due to widespread flooding. Irregular Nigerian supply has forced Galp to buy natural gas at higher prices on the spot market, leading to a loss of 135 million euros in the first half of the year.
Investment bank Jefferies expects Galp to be one of the companies most at risk from the outage, with Nigeria supplying almost half of Portugal's LNG last year. Galp's main activity is upstream in the rich 'off shore' of Brazil, but it also has a small exploration and production operation in Angola and runs renewable energy plants.
(Reuters - Reporting by Sergio Goncalves; Editing by Kirsten Donovan and David Latona)