Galp Energia, SGPS, S.A.

Galp did not provide quarterly revenue or EPS on this call, but it did update key full-year targets. Full-year EBITDA guidance was raised to circa EUR 4 billion and operating cash flow guidance to EUR 3 billion, based on average Brent of $70 per barrel and a refining margin of $10 for the second half. Management said over 25% of the guidance increase comes from operational improvement, with the remainder from macro tailwinds; it also said the updated production guide is around 130,000 barrels a day. In downstream, spot refining margins were said to be above $30 per barrel, while throughput is running in the 80% to 85% range. The Board will propose a 10% increase to the 2026 dividend per share to EUR 0.70, and the company said the EUR 250 million buyback for 2026 is unchanged.

Maria Joao Carioca framed the quarter as strong operating performance in a very volatile market, emphasizing that Galp’s high-quality asset base helped sustain financial results and keep net debt relatively stable despite cash outflows. She highlighted Bacalhau’s ramp-up, strong uptime in legacy upstream assets, and steady progress on Namibia and other strategic milestones. Her tone was constructive but cautious: the company is confident in its portfolio quality, yet still prefers to wait for more visibility on Moeve and other portfolio changes before revisiting distribution policy.

Maria Joao Carioca said the full-year EBITDA and cash flow upgrades reflect continued good performance across the portfolio, with the revision bringing the company toward the top end of its prior range. She explained the gap between EBITDA and cash flow partly by timing, noting downstream cash taxes will come through in 2027 while upstream taxes are already flowing through, which supports the high conversion to cash. On Brazil, she said the export tax impact is being actively managed and remains around the original order of magnitude, with just under EUR 20 million in cash booked so far versus an initial EUR 100 million estimate. On capital returns and capital allocation, she reiterated that the EUR 250 million buyback is unchanged and that any broader distribution policy discussion will wait until there is more visibility on Moeve and other portfolio changes.

Analysts pressed management on whether the new wind acquisitions mean Galp intends to keep the renewables portfolio long term, and management said the acquisitions were the final step in rebalancing and diversifying the power business, with no further acquisition target at this point. Several questions focused on shareholder returns; management said the current policy remains one-third of operating cash flow, the dividend floor is being raised, and the buyback framework may be reconsidered later, but not before more clarity on Moeve. On downstream and Moeve, management said short-term refining margin changes are not altering the long-term logic of the deal, and that due diligence is the main remaining complexity. There were also questions on gas sourcing and hedging: management said 2026 is 70% hedged, Venture Global is on plan, and discussions continue on expiring North African contracts, but there was no further update.