Galp Energia SGPS (GALP) Q4 2011 earnings summary

Executive summary

• 4Q11 net profit doubled YoY to €79M; FY11 net profit was €251M, down 18% YoY, amid stronger E&P and G&P earnings and weak refining margins.

• Lula development advanced, the Sines refinery upgrade neared completion, and a capital increase was set to fund Brazilian upstream projects.

Financial highlights

• FY11 turnover reached €16.804B, up 20% YoY; EBITDA was €797M, down 7%, and EBIT was €394M, down 13%.

• 4Q11 turnover rose 24% YoY to €4.375B; EBITDA increased 20% to €212M and EBIT increased 71% to €110M.

• FY11 associates contributed €73M, down 1% YoY; financial results were a €123M expense, 25% worse YoY, and taxes were €84M, down 28%.

Outlook and guidance

• 1Q12 working-interest production targeted at ~22 kboepd; refining margin expected to recover from 4Q11 levels.

• Marketing volumes expected to decline QoQ under Iberian economic pressure; natural gas volumes expected to rise QoQ on trading activity.

• Sines production was expected to ramp up progressively from April, with stable output targeted by end-2Q12.

• Lula-1 was expected to reach full capacity in 2Q12; the fourth producing well was targeted for connection by end-1Q12.