Galp Energia SGPS (GALP) Q1 2026 earnings summary

Executive summary

• Strong start to 2026 with resilient asset base, disciplined execution, and no direct Middle East exposure, maintaining solid financial health amid global volatility and energy value chain disruptions.

• Upstream and Downstream delivered solid operational results, with Brazil and Bacalhau ramp-up driving higher production and improved oil realizations.

• Net debt remained stable at €1.3bn, supported by robust cash generation and ongoing share buyback program.

• Strategic initiatives progressing, including Namibia exploration and ongoing merger discussions with Moeve in downstream.

Financial highlights

• RCA Ebitda rose 41% YoY to €943m; Group RCA Ebit up 55% YoY to €773m; RCA Net Income increased 41% YoY to €272m.

• Adjusted operating cash flow reached €713m; Free cash flow was €47m, down 75% YoY due to higher capex and Tupi redetermination payment.

• IFRS Net Income was negative at €-111m, mainly due to €-383m in special items related to mark-to-market of unsettled derivatives.

• Bacalhau contributed 10,000 bbl to upstream performance, with Brazil operations delivering at the top end of 125,000-130,000 bbl guidance.

• Refining margins averaged $10-$12/bbl in March, with recent spikes up to $20/bbl amid input cost inflation.

Outlook and guidance

• Current macro assumptions underlying guidance are outdated due to high volatility; no update to guidance or distribution policy until more stability is observed, likely at Q2 results.

• Preparations underway for exploration and appraisal campaign in Namibia, set for later in 2026; Mopane FID targeted for mid-2026, with Venus remaining ahead in timeline.

• Constructive progress on potential downstream merger with Moeve, with agreement expected by mid-year.

• Sensitivities: ~€160M for each $5 Brent move, ~€200M for each $5 refining margin change.

• Upstream ramp-up ongoing, with Bacalhau plateau expected later in 2026.