Galp Energia Surpasses Expectations with Q2 Profit Surge

Portugal's Galp Energia reported a 16% increase in its second quarter adjusted net profit, reaching 299 million euros. Higher oil prices and lower production costs contributed to this growth, despite a decrease in oil and gas production in Brazil and a volatile commodity price environment.

Portugal's Galp Energia on Monday reported a significant 16% jump in its second quarter adjusted net profit, surpassing industry expectations. The company recorded an adjusted net profit of 299 million euros ($325.34 million), outstripping the 236 million euros projected by analysts, driven by higher oil prices and reduced production costs.

Despite a 7% drop in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to 849 million euros, results remained robust, beating the consensus estimate of 821 million euros. CEO Filipe Silva lauded the performance, emphasizing the company's resilience amid a volatile commodity price climate.

Production setbacks were evident, with Galp's oil and gas output from Brazilian upstream projects dropping 5% year-on-year to 106,000 barrels of oil equivalent per day. Notably, the company saw no production from Mozambique following the sale of its stake in a natural gas project there.

However, a rise in Brent oil prices by 9% to an average of $85 a barrel offset some of the production declines. Galp's refining margin remained stable at $7.7, although it dropped considerably from $12 in the previous quarter.

(With inputs from agencies.)