By Sergio Goncalves
LISBON -Portuguese oil and gas company Galp Energia reported a 16% increase in adjusted third-quarter profit on Monday, thanks to soaring oil prices and a near-doubling of its refining margin, but its shares fell on more conservative guidance.
Oil and gas companies around the world received a boost after Russia's invasion of Ukraine sent energy prices soaring just as demand was rapidly recovering with the lifting of pandemic restrictions.
Galp's July-September adjusted net profit was 187 million euros, up from 161 million euros a year earlier and above the 177 million euros expected by 21 analysts polled by the company.
In a statement, Galp said its results reflected a strong operational performance across its businesses, highlighting how upstream and industrial activities had benefited from a strong macro environment.
Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 29% to 784 million euros, though fell short of the average forecast of 830 million euros.
Higher oil prices lifted its upstream adjusted EBITDA by 17% to 612 million euros, despite its share of oil and gas production from projects in which it has a stake remaining almost stable at 127,600 barrels of oil equivalent per day.
Brent oil prices rose to an average of $110.8 a barrel in the third quarter from $73.4 a year ago, Galp said.
However, CEO Andy Brown said in a video that the company was "slightly more conservative", lowering its estimate for full-year adjusted EBITDA to 3.8 billion euros from 4.0 million.
Galp's shares were down 2.34% at 10.01 euros in afternoon trading.
The company said last week it could face further sourcing disruptions after Nigeria LNG, the company's main supplier of liquefied natural gas, declared force majeure due to widespread flooding.
Irregular Nigerian supply has forced Galp to buy natural gas at higher prices on the spot market, leading to a loss of 135 million euros in the first half of the year.
Brown said although the impact of the force majeure was still uncertain, the company was actively finding other competitive sources of gas, adding that he expected the gas supply and trading contribution to improve significantly next year.
