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Investing.com -- Galp Energia (ELI:GALP) reported a 29% year-on-year decline in adjusted EBITDA for the first quarter, weighed down by declining oil output and refining margins to less than half the levels from a year earlier.
The company posted an adjusted EBITDA of €669 million for the quarter, though above the €669 million consensus estimate from 17 analysts polled by the company.
EBIT came in at €497 million, surpassing the consensus estimate of €476 million and well ahead of RBC’s guidance of €433 million.
"At the EBIT level, the beat was driven by stronger than expected midstream results, slightly offset by weaker upstream earnings driven by more cargoes in transit in the quarter," RBC Capital Markets analysts led by Biraj Borkhataria said in a note.
Oil and gas production fell 5% to 104,000 barrels per day, while refining margins also dropped sharply to $5.6 per barrel, down from $12 in the same period last year.
Adjusted net profit for the quarter fell 41% to €192 million, but topped analyst expectations of €185 million, supported in part by lower tax charges.
Galp has kept all its financial guidance and assumptions unchanged following the first-quarter results, but RBC analysts see "material upside to EBITDA guidance this year," given the strong beat in midstream earnings, combined with the arrival of new cargoes from Calcasieu Pass.
"We expect Galp to be close to its >€350m guidance by 2Q, with a material upgrade to numbers therefore for the year and into 2026, subject to gas prices," they added.