Galp Energia SGPS (GALP) Q4 2014 earnings summary

Executive summary

• 4Q14 EBITDA rose 5% QoQ to €399m, supported by integrated upstream, refining and gas operations amid a sharp oil-price decline.

• FY14 EBITDA increased 15% to €1,314m; RCA net profit rose 20% to €373m, while IFRS net profit was a loss of €173m.

• Production growth in Brazil and stronger refining margins helped offset lower upstream realized prices; net debt was €2.52bn at Dec. 2014.

Financial highlights

• FY14 turnover fell 9% YoY to €17.904bn; EBITDA rose 15% to €1.314bn and EBIT rose 31% to €775m.

• 4Q14 RCA net profit increased 49% YoY to €137m; FY14 RCA net profit was €373m, up 20%.

• 4Q14 operating cash flow was €331m; FY14 operating cash flow reached €1.193bn, versus €1.081bn in FY13.

• FY14 capex rose 19% to €1.143bn; E&P represented 87%, with BM-S-11 accounting for 61% of total capex.

Outlook and guidance

• FPSO #4, allocated to Iracema with installed capacity of 150 kbopd and 8 mmscmd, was scheduled to start production in 4Q15.

• Lula/Iracema plateau production was expected by 1H16; FPSO #3 was producing ~65 kbopd with two producer wells.

• Coral FLNG FEED and EPCIC processes were underway with three consortia, with results expected mid-2015; project investment remained subject to FID.

• Four consortia were preparing bids for Mamba onshore EPC; development plans for Area 4 were progressing toward FID.