Galp Energia SGPS (GALP) Q4 2010 earnings summary

Executive summary

• FY10 EBITDA rose 36% YoY to €854m and RCA net profit increased 43% to €306m, supported by stronger operational performance and production from new projects.

• First commercial production began at Lula in the Santos basin; 2010 reserves and prospective resources increased substantially, led by BM-S-11 and Lula/Cernambi.

Financial highlights

• FY10 turnover was €13,998m, up 17% YoY; EBITDA was €854m, up 36%; EBIT was €445m, up 55%.

• FY10 RCA net profit was €306m, up 43% YoY; IFRS net profit was €441m, up 27%. 4Q10 RCA net profit rose 16% YoY to €40m.

• 4Q10 turnover increased 22% YoY to €3,538m and EBITDA rose 18% to €177m; EBIT was €55m, up 8%.

• Associates contributed €79m in FY10, up 14% YoY; financial results were negative €98m and taxes were €115m.

Outlook and guidance

• 1Q11 crude production target was 20.0 kbopd; 1Q11 natural gas volumes were expected to rise QoQ, driven by electricity demand.

• Iberia’s weak economic environment and a Sines refinery outage in 1Q11 were expected to weigh on operating performance.

• Matosinhos refinery upgrade production was expected to come fully on stream in 2Q11; the 82 MW cogeneration project was scheduled to start in 4Q11.

• Liquidity facilities were available to support execution of current projects.