Portuguese energy company Galp Energia posted a 45% jump in second-quarter adjusted net profit on Monday, boosted by higher oil output in Brazil and stronger crude prices and refining margins brought on by Iran war supply disruptions.
The company raised its earnings guidance for the year, and it said the board of directors will propose a 10% increase in the 2026 dividend to €0.70 per share at next year's annual meeting.
Galp said its adjusted net income rose to €540 million ($616 million) in the April-June period from €373 million a year ago, exceeding the €494 million consensus provided by the company.
With production concentrated in Brazil's prolific offshore fields, Galp has been largely insulated from disruptions to oil flows through the Strait of Hormuz while reaping the benefits from stronger oil prices and refining margins.
Co-CEO Maria Joao Carioca said in a statement that "the results reflected the quality of Galp's assets and its teams' ability to execute even in a highly volatile environment."
She said Galp would maintain "strong financial discipline" while continuing to invest to strengthen its competitiveness and growth.
Earnings Boosted by Brazil Crude Production
Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 52% year-on-year to €1.27 billion in the quarter, Galp said.
EBITDA from crude production in Brazil's offshore fields rose 73% to €700 million, which it said was driven by the launch and ramping up of the floating production, storage and offloading vessel at the Bacalhau field and higher average Brent prices.
Galp raised its full-year EBITDA guidance to around €4 billion from over €2.6 billion previously, driven by stronger upstream core earnings, now expected to exceed €2.3 billion versus an earlier forecast of more than €1.5 billion.
Galp's share of oil and gas production from its projects in Brazil rose 12% year-on-year to 127,000 barrels per day, while average Brent crude prices LCOc1 increased to $103.8 per barrel from $67.9 a year earlier.
The company said its refining unit was the second-largest contributor, with EBITDA rising 43% to €458 million in the quarter as refining margins jumped to $16.8 per barrel from $6.1 a year ago.
($1 = 0.8770 euros)
(Reuters - Reporting by Sergio Goncalves; Editing by Kirsten Donovan and Joe Bavier)
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