Galp Energia lifts forecast as LNG, upstream drive solid Q2 results; shares up

Investing.com -- Galp Energia (ELI:GALP) shares rose around 2.5% Monday after delivering strong second-quarter results, supported by resilient operations across all business segments despite a weaker macroeconomic backdrop and U.S. dollar depreciation.

RCA EBITDA rose to €840 million, with growth across Upstream, Industrial & Midstream, Commercial, and Renewables.

The Upstream business generated €403 million in RCA EBITDA, helped by a 6% year-on-year increase in production despite a 20% drop in Brent prices.

Industrial & Midstream posted €320 million, with trading performance in natural gas and LNG offsetting impacts from an April power outage.

Commercial earnings rose 28% to €101 million, driven by improved markets in Spain and Africa.

Renewables delivered €9 million, slightly higher year-on-year.

RCA EBIT for the group stood at €662 million, and net income reached €373 million. Adjusted operating cash flow (OCF) was €713 million, while cash flow from operations (CFFO) came in at €627 million, reflecting reduced inventories and currency headwinds.

Galp said capital expenditure (capex) for the quarter totaled €182 million, largely directed to the Bacalhau development in Brazil and low-carbon projects in Sines.

Net debt rose to €1.4 billion following €251 million in dividend payments and €135 million in buybacks, alongside FX-related effects on cash.

For the first half, Galp reported €1.5 billion in RCA EBITDA and €980 million in OCF.

Free cash flow (FCF) reached €594 million, aided by proceeds from the Mozambique Area 4 stake sale. Net capex was an inflow of €305 million.

Looking ahead, Galp has raised its full-year 2025 guidance, expecting Group EBITDA and OCF to exceed previous targets. Upstream production is now seen between 105–110 kboepd.

Industrial & Midstream EBIDA is forecast above €800 million, supported by Venture Global LNG volumes and firmer gas prices.

Commenting on the results, co-CEOs Maria João Carioca and João Diogo Marques da Silva said: “The second quarter of 2025 was another strong quarter for Galp, underpinned by a robust operating performance across businesses.”

"We are confident in our performance and are therefore upgrading our operating expectations for 2025,” they added, and noted that progress in Namibia “reinforces our confidence in its successful completion.”

Galp said it shared data with a shortlist of potential partners throughout most of the second quarter and has now received non-binding Namibia offers “from highly credible players.”

"Focus will now be on analysing the offers at hand and defining a way forward," it added.

Commenting on this, RBC Capital Markets analysts said that Galp pointing out that it has more than one offer on the table "is likely to be taken positively and should help maintain recent share price momentum."