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Research Tree provides access to ongoing research coverage, media content and regulatory news on GALP ENERGIA SGPS SA. We currently have 6 research reports from 1 professional analysts.
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GALP ENERGIA SGPS SA
GALP ENERGIA SGPS SA
First view: in line Q2 16; little detail in the press release
29 Jul 16
Galp reported its Q2 16 results which were in line with expectations. The E&P division came perfectly in line with an EBITDA of €86m, down 33% yoy, while refining came in slightly below expectations at €143m, down 38% yoy, and Gas &Power above expectation at €97m, up 10% yoy.
Little news on strategy update
16 Mar 16
Galp presented its strategy update yesterday in London. The key points are: EBITDA - EBITDA CAGR for the period 2015-20 estimated at c.15%, considering a $35/bbl oil price in 2016 and gradually reaching $70/bbl in 2020 - 2016 EBITDA is expected to be €1.2-1.3bn Capex - Average annual estimated capex revised downwards c.15% to €1.0-1.2bn in the 2016-20 period - 2016 capex estimated in the range €1.1-1.3bn FCF - Galp expects to turn free cash flow positive during 2018, assuming a Brent price of $55/bbl, with Brazil becoming FCF positive during 2017 at $45/bbl Dividend - the dividend to be proposed for the 2015 fiscal year is €0.41472/share; business plan assumes €0.50/share flat from 2017 onwards Production - production CAGR expected at 25-30% for the period 2015-20, through the development of its operating and sanctioned E&P projects Cost reduction - Cost reduction target increased from previous €100m (2019 vs 2013) to €150m by 2020, having already achieved €80m by 2015; additionally, it is expecting a refining margin improvement of $1/boe, based on energy efficiency and higher conversion.
Brazil continues to outperform
06 Mar 16
The group reported its Q4 15 figures which slightly better than expected. Adjusted net income was in profit at €149m, higher than the expected €120m. EBITDA came down 22.5% to €309m for Q4 15 and up 19% for the full year at €1.56bn. By division: 1) In the E&P division, EBITDA came down 48% yoy to €53m. Production costs (in unit terms) decreased by around $1/bbl to $10.5/bbl. Working production reached 52.1kbpd, up 43% thanks to the FPSO 3 reaching plateau production (after the connection of the fifth producer well) and production continuing to rise for FPSO4. The development of the Lula/Iracema project is the key driver. 94% of production was oil, and production in Brazil accounted for 84%. Solid Track Record in Brazil Source: Galp 2) In the Refining & Marketing division, EBITDA came down 13% yoy to €166m. Raw material processed was up 4.2%, with crude accounting for 89% of the raw material, of which 78% corresponded to medium and heavy crudes. Consumption and losses accounted for 8% of raw materials processed, in line yoy. The refining margin was $4.1/bbl, while the marketing of oil products maintained its contribution to results despite lower volumes. During Q4 15, the Iberian market for oil products reached 15.1mt, or a 0.3% increase. Road diesel consumption experienced the largest increase, benefiting from lower retail prices and some economic recovery in the region. 3) In the Gas & power division, EBITDA came down 13% yoy to €88m, mainly due to lower activity in power because of sub-optimal utilisation of the cogeneration in the Matosinhos refinery. Natural gas sales decreased to 1,692cm mainly due to lower volumes in the trading segment. The spread between the Asian LNG (JKM) and natural gas in Europe (NBP) tightened from $2.9mmbtu during Q4 15 and $1.4/mmbtu in Q4 14. JKM decreased more due to the increased use of nuclear energy in the region and higher LNG supply from the start of production of the new gas liquefaction plant in Australia. In Q4 15, the Iberian natural gas market increased by 4.8%. The electrical segment consumption was up 28% given low hydroelectric generation which led to a greater use of natural gas. Cash flow Cash flow from operations came in at €272m in Q4 15, and capex at €431m, of which 75% for the E&P division. Net debt at the end 2015 was €1.7bn considering the balance of the loan to Sinopec as cash & equivalents. Excluding Sinopec, debt stood at €2.4bn, stable yoy. Indeed, for the full year, cash flow from operations (€1.7bn) covered both the capex (e1.2bn) and the dividend (€0.3bn). Outlook Regarding the outlook, the key driver remains Upstream. Upstream as a driver Source: Galp
First view: Better but not exceptional
08 Feb 16
Galp posted Q4 15 profit of €149m, higher than the expected €120m. The beat was driven by a slightly better performance than expected in all divisions. E&P EBITDA came in at €53m, down 48% yoy, despite 43% production growth to 52.1kbpd. Refining EBITDA came in at €166m, down 13% yoy. Gas & power EBITDA was €88m, down 13.1%
Refining 60% of EBITDA, guidance maintained. What about Q4 15?
27 Oct 15
The company published its Q3 15 report with better net results at €180m vs. €153m expected. EBITDA was in line with the consensus at €411m. By division: 1) E&P EBITDA came in at €89m, down from €132m a year ago and down from €120m in Q2 15. Production was up by 44% and reached 45.7kbpd with Brazil up 77% accounting for 86%. The start-up of production of FPSO 3 and 4 increased production costs by €12m to €35m. 2) R&M EBITDA came in at €245m, up 70% yoy and up from €224m in Q3 15. The refining margin came in slightly lower than in Q2 15 but the raw material was also a bit higher. Production of middle distillates accounted for 47% of production. Consumption and losses during the quarter accounted for 7% of the raw material. The international market still supported the margin despite a decrease due to lower arbitrage in gasoline between the US and Europe. 3) Gas&Power EBITDA came down 27% to €72m despite volumes increasing by 14% (in the trading segment) which offset volumes sold to direct clients in the Iberian Peninsula (industrial segment). Few opportunities in the LNG international market and lower natural gas hit the EBITDA which came down from 30% yoy to €37m (half of the division's EBITDA). Capex in Q3 15 was €256m mainly linked to Brazil's E&P. Cash flow from operations before working capital was €255m. The interim dividend paid was €172m. Thanks to positive working capital (+€275m), debt was stable at €2.4bn. Year to date the group has generated enough cash to cover its dividend.
Brazil is stronger than refining
27 Jul 15
Galp reported it Q2 15 results 30% above expectations at the bottom line. The beat is driven by all divisions. Refining has been strong as expected, while E&P production growth (close to 100% yoy) supported the increase in E&P. The company revised its estimates for average 2015 working interest production to c.43 kboepd. Galp expects a new offshore oil production platform on the Iracema North field to start pumping crude in the coming days, a quarter ahead of schedule. All in all, this means group EBITDA is 15% higher than the previous guidance. By division, in Q2 15: E&P EBITDA rose 12.5% yoy to €120m (despite an oil price at $53/bbl. in Q2 15 vs. $108.5/bbl. in Q2 14 for Galp), thanks to lower production costs (-60%, driven by Angola) and higher production (+86% at 41kbpd). Production from Brazil accounted for 82% of the total production vs. 70% a year earlier. R&M EBITDA came at €184m, vs. €41m in Q2 14, with high volumes refined (+14.7% and the refining margin at $7.3/bbl, while refining's cash costs increased to $2.6/bbl. vs. $2.4/bbl. The production of middle distillates accounted for 46% of total production. G&P EBITDA came in 24% lower yoy to €92m, on the back of fewer LNG volumes traded and lower natural gas prices in different markets. Volumes sold in the industrial segment decreased 5% due to client portfolio optimisation in Portugal. Volumes sold in the retail segment fell 16% as a result of increased competition in the Iberian market. Taxes came in higher than last year as they include the special participation tax payable in Brazil and IRP payable in Angola of €35m in Q2 15. Cash flow from operations was €511m (vs. €374m in Q1), capex at €313m and dividend of €145m. Net debt is stable at €2.3bn with an average interest rate of 3.9% and 3.3 years maturity.
08 Dec 16
Elderstreet stake acquired 02 GENERAL NEWS Globalworth premium In this issue Venture capital firm Draper Esprit has taken a 30.8% stake in venture capital trust manager Elderstreet. Both investment managers focus on the technology sector and they will be able to co-invest. Elderstreet has investments in a number of AIM-quoted companies through its VCTs. The purchase was funded by an issue of Draper Esprit shares worth just over £250,000. Simon Cook, the chief executive of Draper Esprit, is a former partner at Elderstreet so he knows the business and the people who run it, although he did leave more than 14 years ago. Cook has previously acquired portfolios from 3i and Cazenove, two other firms where he has worked. Draper Esprit has an option to acquire the remaining shares in Elderstreet, which has more than £25m under management. Adding Elderstreet to the group enables Draper Esprit to offer investors a range of EIS funds, VCTs and an ISA qualifying listed evergreen patient capital fund. The enlarged group has venture capital assets under management of more than £350m. At the end of September 2016, Draper Esprit had a net asset value of 352p a share, which is similar to the current share price. The June 2016 flotation price was 300p a share. Draper Esprit is quoted on Ireland’s Enterprise Securities Market as well as AIM.
01 Nov 16
Since our last outlook note, Quadrise has begun to supply MSAR for extended LONO sea trials, paving the way for commercial adoption from calendar H217 onwards. In August it signed a memorandum of understanding with clients in the Kingdom of Saudi Arabia (KSA), which is a key enabler for progressing the production-to-combustion pilot there. In October it completed a placing and open offer raising a total of £5.25m (gross). This should enable it to transition comfortably to the commercial phase on successful completion of the LONO and KSA trials.
Raising Target Price to 2,500p per share
01 Nov 16
Royal Dutch reported clean EPS of US$0.35, nearly 50% ahead of consensus. More importantly, cash flow jumped QoQ to US$8.5bn which should go a long way to confirming Shell’s capacity to maintain the current dividend, despite the increase in gearing to 29.2%. Upstream returned to profitability on an underlying basis for the first time since 1Q15. We believe these results confirm our view that Shell’s dividend can and will be maintained at US$0.47 per quarter and we increase our Target Price to 2,500p per share, given further sterling weakness.
Conviction List Q4 2016
05 Oct 16
Since its inception in 2010, the Conviction List has outperformed the market in 13 of 18 periods and a reinvested Conviction List would have returned 255% against a Small Companies index that would have returned 130%. Our Conviction List returned 3.7% over the last quarter; this was set against the benchmark UK Small Companies index that returned 11.3% over the same period. Our Q4 portfolio reflects our outlook for a temporary sweet spot for UK growth during the second half of 2016. The downside risk from the uncertainty of the EU Referendum result has been countered by stimulus from the Bank of England, signs of a looser fiscal stance and an 18% YoY reduction in the Sterling Exchange Rate. Compressed corporate fixed income spreads continue to provide a valuation underpin for global equities.
GTL transaction not going ahead
01 Dec 16
Intelligent Energy (IEH) has announced that the deal to acquire the Energy Management Business of GTL will not now be consummated. The move leaves management free to concentrate on driving sales of commercially ready B2B products, which is a key element of its strategy. We adjust our FY17e revenue estimate while leaving our pre-exceptional losses and cash-flow forecasts unchanged.