Galp Energia SGPS SA (GLPEF) Q2 2025 Earnings Call Highlights: Strong Production and Upgraded ...
Full-Year Production Guidance: Upgraded to 105,000 to 110,000 barrels per day.
Full-Year Group EBITDA: Expected to surpass EUR 2.7 billion, revised upwards from EUR 2.5 billion.
Operating Cash Flow: Expected to be over EUR 1.8 billion.
Release Date: July 21, 2025
Warning! GuruFocus has detected 1 Warning Sign with BOM:532505.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Galp Energia SGPS SA (GLPEF) reported a strong second quarter with higher-than-anticipated Upstream production and increased LNG trading flexibility.
The company upgraded its full-year production guidance to a range of 105,000 to 110,000 barrels per day.
Full-year group EBITDA is now expected to surpass EUR2.7 billion, an upward revision from EUR2.5 billion.
Operating cash flow is now expected to be over EUR1.8 billion, reflecting strong cash generation.
The company received non-binding offers from credible players for its Namibia partnership, indicating progress in securing a strong partnership.
Negative Points
The company faced headwinds from dollar depreciation, impacting financial performance.
CapEx is expected to be heavier in the second half of 2025, particularly in Industrial low-carbon projects.
There is uncertainty regarding the timeline for the Namibia farm-out process, with completion expected by year-end.
The company is not guiding on net debt levels by the end of the year, indicating potential financial uncertainty.
Galp Energia SGPS SA (GLPEF) faces challenges with the special energy tax in Portugal, with ongoing discussions and potential legal disputes.
Q & A Highlights
Q: Can you clarify the impact of Bacalhau on the upgraded production guidance and comment on CapEx expectations? A: Bacalhau is expected to contribute very little, around 3,000 barrels, to production this year. The guidance upgrade is based on strong performance from our existing fleet. CapEx for 2025 has been revised to below EUR1 billion, with a heavier second half expected due to increased investments in low-carbon projects and renewables. (Maria Carioca, Co-CEO & CFO)
Q: Could you elaborate on the midstream performance and the timeline for the Namibia farm-out? A: The midstream strength is largely due to receiving three cargos from Venture Global, contributing significantly to earnings. We expect to receive 10 cargos in total this year. Regarding Namibia, we aim to finalize the farm-out by year-end, focusing on securing a strong partnership with an experienced operator. (Joao Diogo, Co-CEO & EVP Commercial; Maria Carioca, Co-CEO & CFO)
Q: What is the hedging strategy for Venture Global volumes, and how does this affect shareholder returns? A: We have no material long-term hedges for Venture Global volumes. Our distribution policy remains steady, focusing on maintaining flexibility and optionality, with no immediate changes planned despite a strong balance sheet. (Joao Diogo, Co-CEO & EVP Commercial; Maria Carioca, Co-CEO & CFO)
Q: Can you provide insights into the production profile for Bacalhau in 2026 and net debt expectations? A: Bacalhau's production ramp-up is expected to take over a year, with plateau production not anticipated in 2026. Net debt is not expected to fluctuate significantly, with some working capital effects expected to flow through by year-end. (Maria Carioca, Co-CEO & CFO)
Q: What are the key drivers behind the strong midstream performance, excluding Venture Global? A: The strong performance is due to increased flexibility in gas trading and strong results across all commodities, including oil and power. Our positioning in Iberia and Brazil also contributes to this success. (Joao Diogo, Co-CEO & EVP Commercial)
Q: How do you view the development concept for Mopane in Namibia, and what are the next steps in the partnership process? A: The development concept for Mopane is not yet finalized and will be developed in partnership discussions. We are currently analyzing non-binding offers and will engage in bilateral conversations to assess alignment with potential partners. (Maria Carioca, Co-CEO & CFO)
Q: What is the outlook for Refining margins in the second half of the year, and is there any update on the Spanish blackout impact? A: Refining margins are expected to remain strong, supported by diesel and jet fuel. We maintain our guidance due to planned maintenance in Q4. The Spanish blackout impact is still under review, with no clear resolution yet. (Joao Diogo, Co-CEO & EVP Commercial)
Q: Can you provide an update on the Mozambique capital gains assessment and contingent payments? A: We are in discussions with the Mozambican government regarding capital gains assessments, prioritizing a diplomatic solution. Contingent payments include EUR100 million for Coral and $400 million for onshore development, expected in the near future and by 2026, respectively. (Joao Diogo, Co-CEO & EVP Commercial; Maria Carioca, Co-CEO & CFO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
4 hours ago
- Yahoo
1 Pipeline Stock That's My Ultimate Energy Infrastructure Play
Written by Robin Brown at The Motley Fool Canada Pipelines have become a huge topic across Canada. With the prospect of tariffs from the U.S., Canada is aware of its need to get its energy to new markets. That could be a great opportunity for Canada's top energy infrastructure companies. Pembina Pipeline: An energy giant in Western Canada One company that stands out is Pembina Pipeline (TSX:PPL). It has a market cap of $29 billion. It is not the largest energy infrastructure play in Canada, but there are reasons why it might be preferred over other Canadian infrastructure stocks. A diverse asset base Firstly, Pembina has a great mix of assets. It has the assets Western Canadian energy producers need to get their energy to market. It has collection pipelines, natural gas processing and fractionation, storage, export terminals, and egress pipelines. Given how crucial its assets are, over 80% have long-term contracts. This helps provide a stable and predictable stream of baseline cash flows to the business. The contracted business helps offset the variability from energy commodity pricing. While it does have commodity exposure from its marketing business, any upside in energy prices go to the bottom line. This energy infrastructure player is not dependent on energy prices to succeed. A resilient dividend Secondly, Pembina has an incredibly resilient dividend. PPL stock yields 5.6% today. It's an attractive rate for such a high-quality business. Pembina's dividend is widely supported by its fee-based earnings alone. Its payout ratio sits at 48%, so it has a wide margin of safety. It even maintained its dividend in 2020, even when energy prices turned negative. Since 2020, Pembina has delivered modest annual dividend growth (3–5% per year). Growth to come from LNG Thirdly, Pembina has an attractive growth pipeline. It has commenced construction on the Cedar Liquified Natural Gas (LNG) export terminal in Kitimat, B.C. This will be one of only a few approved LNG terminals that is in construction. The company has already seen strong demand from energy suppliers to contract their output to Asian markets. Pembina has a great record of executing projects on time and on budget. This massive project is likely to be the same. The best part is that Pembina plans to build Cedar without any equity dilution. Despite its growing dividend and list of capital projects, it expects to fund its growth with modest debt and internally generated cash flows. Pembina has one of the best balance sheets in the energy infrastructure business. Its debt-to-earnings before interest, tax, depreciation, and amortization (EBITDA) ratio sits at around 3.5 times. Many peers trade at more than 4–5 times debt-to-EBITDA. As a result, it can afford to increase its debt levels for essential projects like Cedar LNG. Once Cedar comes online, its leverage will likely pull back quickly as that asset begins generating strong free cash flows. Attractive valuation for an energy infrastructure stock Pembina trades for an enterprise value-to-EBITDA of 10.5. That is two churns lower than Enbridge and TC Energy. Yet, it has a better balance sheet and more attractive long-term growth prospects. Historically, PPL traded on par with these peers. If it can continue to execute its growth plan, there is no reason it shouldn't trade up a turn or two. For a steady business with an attractive dividend, Pembina Pipeline is a top energy infrastructure stock. As Canada looks for new egress alternatives, it is in a prime position to continue growing its base of essential energy infrastructure assets. The post 1 Pipeline Stock That's My Ultimate Energy Infrastructure Play appeared first on The Motley Fool Canada. Should you invest $1,000 in Pembina Pipeline right now? Before you buy stock in Pembina Pipeline, consider this: The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Pembina Pipeline wasn't one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years. Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the 'eBay of Latin America' at the time of our recommendation, you'd have $24,927.94!* Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 30 percentage points since 2013*. See the Top Stocks * Returns as of 6/23/25 More reading 10 Stocks Every Canadian Should Own in 2025 3 Canadian Companies Powering the AI Revolution A Commonsense Cash Back Credit Card We Love Fool contributor Robin Brown has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge and Pembina Pipeline. The Motley Fool has a disclosure policy. 2025 Sign in to access your portfolio
Miami Herald
7 hours ago
- Miami Herald
Trump's EU Deal May Not Hurt Putin
European Union chief Ursula von der Leyen said the deal she struck with Donald Trump will lessen the reliance on Russia's energy exports but there is doubt over whether the agreement can curb funding for Vladimir Putin's war machine. The EU-U.S. deal for 15 percent tariffs for European goods included a pledge by Brussels to buy $750 billion of American energy, including liquefied natural gas (LNG) over the next three years. Von der Leyen has said too much Russian energy was still entering the EU but there are questions over whether the deal can stifle Moscow's main revenue generator as it continues its military aggression. Septimus Knox, from the cyber and security consultancy S-RM, told Newsweek as long as there is a market for Russian oil, it will be difficult for Ukraine's allies in Europe to pressure Moscow economically. Newsweek has contacted the European Union for comment. Headlines of the EU-U.S. deal focused on the 15 percent tariffs that European goods would face in the U.S.—half the 30 percent level that Trump had threatened. But the agreement also included a requirement by EU companies to buy $250 billion worth of U.S. oil, natural gas and nuclear technologies for each of the next three years. The EU has pledged to phase out Russian energy sources by 2028 and Trump's deal could help with that but questions remain over how such a pledge can be carried out while Europe tries to decarbonize its economy. In 2024, the EU imported more than $435.7 billion worth of energy, the Financial Times reported— but U.S. fossil fuel supplies to the bloc are worth only $75 billion, meaning a huge spike in trade would be needed under the terms of the deal. Von der Leyen said the EU would start large-scale purchases of U.S. oil, liquefied natural gas (LNG) and nuclear fuel as it moves to phase out Russian energy sources. The EU chief said too much Russian energy still enters Europe, despite sanctions, and expanding energy cooperation with the U.S. would diversify sources of supply and increase energy security. Septimus Knox, director, disputes and investigations at S-RM told Newsweek the deal is more about securing future supplies rather than decoupling the EU from Russian energy, which has been a Brussels objective since the start of the war. However, as long as a market exists for cheap Russian oil, it will be very difficult for Ukraine-aligned countries to pressure Moscow financially, he said. This was because the Russian economy has been distorted by the sole objective of sustaining the war in Ukraine. The Kremlin can also accept heavy economic damage to achieve this, calculating it is unlikely to lead to civil discontent. Russia also seems to have been successful in pivoting away from the EU toward China, India and Turkey, which have all surpassed the EU in terms of energy imports, said Knox. But closer collaboration between the EU and U.S. could mean that the cost of Russia's forced diversification away from the EU cuts deeper economically, he added. Leigh Hansson, partner in Reed Smith's Global Regulatory Enforcement Group, told Newsweek the EU has already drastically reduced its reliance on Russian gas. Hanson said although the details of the energy element of the EU-U.S. deal are not entirely clear, it likely will further decrease European dependence on Russian gas. But Svitlana Romanko, founder and executive director of Razom We Stand, told Newsweek that the Trump deal risks locking the EU into another cycle of gas dependence. She said the deal should be treated as a short-term bridge while Europe doubles down on clean energy solutions that permanently end the Kremlin's leverage over energy exports. The EU passed its 18th sanctions package against Russia this month. Knox said its targeting of two Chinese banks and the Nayara Energy oil refinery in India, partly owned by Russia's Rosneft, showed how Brussels is willing to target China and India to curtail Moscow's access to these markets. The EU and the U.S. can also use sanctions to drive the cost of sales up for Russia and, with reduced revenues, the Kremlin will have to make increasingly difficult choices with regards to state funding, Knox added. What People Are Saying European Commission President Ursula von der Leyen said: "We will replace Russian gas and oil by significant purchases of US LNG, oil and nuclear want to absolutely get rid of Russian fossil fuels." Septimus Knox, from the cyber and security consultancy S-RM, told Newsweek: "As long as a market exists for cheap Russian oil, it will be very difficult for Ukraine-aligned countries to pressure Russia financially. Knox added: "Ultimately, Russia will always be able to derive significant revenues from its energy production." Svitlana Romanko, founder and executive director of Razom We Stand: "This deal should be treated as a short-term bridge while Europe doubles down on clean energy solutions that permanently end the Kremlin's leverage over our energy systems." More details will be negotiated in the coming weeks in the framework deal. The European Commission can negotiate trade deals for the entire bloc but it still needs the backing of the 27 EU member states, whose ambassadors will meet next week. Related Articles Russia Hit by Second Major Cyberattack in Two Days: Live UpdatesPutin Ally Responds to Lindsey Graham Over Trump's Ukraine Peace Talks DemandsChina's Submarine Rescue Ship Detected Sailing Toward RussiaRussia Faces Losing Its Only Aircraft Carrier 2025 NEWSWEEK DIGITAL LLC.
Yahoo
10 hours ago
- Yahoo
Amazon (AMZN) Price Target Raised to $271 — Here's What's Driving It
Inc. (NASDAQ:AMZN) is one of the . On July 28, UBS analyst Stephen Ju raised the price target on the stock to $271.00 (from $249.00) while maintaining a Buy rating. The price target increase reflects UBS's decision to roll back some of the decreases in estimates it had made three months ago when it was expecting increased demand destruction from tariffs. The firm has raised its Gross Merchandise Value (GMV) estimates for 2026 by an estimated 2%, along with a 2% increase in gross profit projections. Moreover, it has also raised its 2026 and 2027 advertising segment forecasts by an estimated 3% due to better-than-expected advertising performance. Meanwhile, AWS growth estimates were maintained at 16% for the second quarter of 2025. 25 best things to buy on Amazon under $20 (Photo credit: Pixabay) Based on the revisions, there is a 1% increase in 2026 revenue estimates and a 5% increase in EBIT (Earnings Before Interest and Taxes) projections. For the year 2027, the firm projects a 0.1% revenue increase and a 7% EBIT increase. The firm also raised its 2025 CapEx forecast to $112 billion from the previous $107 billion after the company disclosed its first-quarter 2025 capital expenditures. Inc. (NASDAQ:AMZN) is an American technology company offering e-commerce, cloud computing, and other services, including digital streaming and artificial intelligence solutions. While we acknowledge the potential of AMZN as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and Disclosure: None.
