Galp Energia, Sgps S.a. Class B · EURONEXT:GALP
Galp Energia, Sgps S.a. Class B — Galp Energia — Q2 2011 Earnings Presentation
24 slides from Galp Energia, Sgps S.a. Class B's earnings presentation, Jul 29, 2011
Slide 1: Results: Second Quarter and First Half 2011
29 July 2011 Results SECOND QUARTER AND FIRST HALF 2011 Delivering growth through exploration and production
Slide 2: Key highlights
Key highlights Business overview Strategy execution update Final remarks Appendix 2 Second Quarter and First Half 2011 results
Slide 3: Key highlights
Key highlights ▪ EBIT growth QoQ driven by higher contribution from oil marketing ▪ Net profit in 2Q11 reached €70 Mln, up 68% QoQ ▪ Upgrade project at Matosinhos refinery onstream since the end of June ▪ Brazilian production positively impacted by the first gas injection well connected to the FPSO
Slide 4: Business overview
Key highlights Business overview Strategy execution update Final remarks Appendix 4 Second Quarter and First Half 2011 results
Slide 5: Operational activity showing signs of recovery QoQ
Operational activity showing signs of recovery QoQ Key operating data ▪ Net entitlement production increasing with higher contribution from Brazil 2Q11 2Q10 YoY QoQ 1H11 YoY Average realized sale price $/bbl 106.7 81.6 +31% +14% 100.3 +32% ▪ Refining margin following Net entitlement production 13.8
Slide 6: Net profit RCA in 2Q11 of €70 Mln, up 68% QoQ
Net profit RCA in 2Q11 of €70 Mln, up 68% QoQ Profit & Loss (€Mln) ▪ EBITDA increase QoQ 2Q11 2Q10 YoY QoQ 1H11 YoY driven by higher E&P Turnover 4,356 3,580 +22% +15% 8,151 +19% and R&M contribution EBITDA 230 277 (17%) +71% 365 (20%) E&P 75 44 +69% +57% 122 +32% ▪ DD&A in Angola R&M 95 134 (29%) n
Slide 7: Capex mainly channeled to the conclusion of the upgrade project
Capex mainly channeled to the conclusion of the upgrade project Capital expenditure (€Mln) G&P ▪ Development activities R&M in Brazil responsible for E&P 590 most of E&P capex 479 ▪ Upgrade refining project 313 accounting for c.90% of 278 R&M capex ▪ G&P capex channelled to natural gas infrastructur
Slide 8: Net debt increase driven by transformational capex execution
Net debt increase driven by transformational capex execution Balance sheet (€Mln) ▪ Working capital impacted Jun.2011 Mar.2011 Jun - Mar Dec.2010 Jun - Dec by decrease in payables Fixed assets 5,782 5,621 +161 5,426 +356 Work in progress 2,350 2,115 +235 1,981 +369 ▪ Dividend payment of Strategic st
Slide 9: Short term outlook
Short term outlook ▪ 3Q11 working interest production targeted at c.19 kbopd ▪ Benchmark refining margins to remain under pressure in 3Q11 ▪ Marketing volumes recovery QoQ, but still affected by current macro environment in Iberia ▪ 3Q11 natural gas volumes down QoQ due to seasonality ▪ Transformati
Slide 10: Strategy execution update
Key highlights Business overview Strategy execution update Final remarks Appendix 10 Second Quarter and First Half 2011 results
Slide 11: Continuing working to a solid capital structure
Continuing working to a solid capital structure NG infrastructure E&P Brazil Transaction Sale of up to 49% of a holding Capital increase at subsidiary level of company with a RAB1 of c. €900Mln a minimum of €2Bln Status Process impacted by current macro Process ongoing environment Binding offers sti
Slide 12: Upgrade project at Matosinhos refinery running since June
Upgrade project at Matosinhos refinery running since June Matosinhos refinery ▪ New Matosinhos crude distillation capacity of 110 kbbl/d ▪ Project execution on cost with Matosinhos refinery upgrade already completed ▪ Upgrade project at Sines refinery to be concluded before YE2011 12 Second Quarter
Slide 13: Intensive drilling activity expected for 2H11
Intensive drilling activity expected for 2H11 ▪ Formation tests concluded on Iara Horst, 2011 Country Area with positive results 1Q 2Q 3Q 4Q Brazil Lula 1A 1A ▪ Biguá well in BM-S-8 Cernambi 1A Iara 1A already being drilled BM-S-8 1E 1E with results expected by BM-S-24 1A 4Q11 Potiguar 1E Angola Blo
Slide 14: Lula production gaining relevance in Galp Energia production
Lula production gaining relevance in Galp Energia production FPSO Cidade de Angra dos Reis ▪ 2nd and 3rd production wells to be connected by August and October respectively ▪ Expected production from FPSO Cidade de Angra dos Reis at c.70 kbbl/d by YE2011 ▪ FPSO Cidade de São Vicente in Lula NE perfo
Slide 15: Exceptional progress in Brazil drives new production targets
Exceptional progress in Brazil drives new production targets Production target 1 (kboepd) 2015 2020 +40% +50% >70 >300 50 200 @ March 2011 @ July 2011 @ March 2011 @ July 2011 Better reservoir characteristics reduces time to market of resources 1 Working interest production 15 Second Quarter and Fir
Slide 16: Final remarks
Key highlights Business overview Strategy execution update Final remarks Appendix 16 Second Quarter and First Half 2011 results
Slide 17: Final remarks
Final remarks ▪ Focus on optimitization activities to support resilience of Galp Energia downstream business in Iberia ▪ Funding solutions being executed to reach a sustainable and solid capital structure ▪ Upgrade project to be concluded before YE2011, supporting cash flow generation going forward
Slide 18: Appendix
Key highlights Business overview Strategy execution update Final remarks Appendix 18 Second Quarter and First Half 2011 results
Slide 19: EBITDA increase YoY, benefiting from higher contribution of Brazil
EBITDA increase YoY, benefiting from higher contribution of Brazil Main E&P data 2Q11 2Q10 YoY QoQ 1H11 YoY ▪ Lula and CPT Tômbua- Lândana projects drove Working interest production kbbl/d 21.8 19.8 +10% +15% 20.4 +7% working interest production Net entitlement production kbbl/d 13.8 10.9 +26% +43%
Slide 20: EBITDA improved QoQ supported by recovery in oil marketing
EBITDA improved QoQ supported by recovery in oil marketing Main R&M data 2Q11 2Q10 YoY QoQ 1H11 YoY ▪ Premium over benchmark of $1.9/bbl, Galp Energia refining margin $/bbl 0.6 3.4 (82%) (52%) 0.8 (74%) in line with 1Q11 Spread over benchmark $/bbl 1.9 1.9 (1%) +3% 1.7 +7% Crude processed M bbl 20.9
Slide 21: EBITDA stable YoY, excluding one-off events in 2Q10
EBITDA stable YoY, excluding one-off events in 2Q10 Main G&P data ▪ Recovery of NG volumes, 2Q11 2Q10 YoY QoQ 1H11 YoY driven by higher industrial NG supply total sales volumes M m3 1,187 1,105 +7% (26%) 2,792 +22% and residential Electrical M m3 487 506 (4%) (3%) 989 +15% consumption Industrial M m
Slide 22: Additional facilities of €11 Bln
Additional facilities of €11 Bln M/L-term debt reimbursement profile (€Mln) 1.000 ▪ No major debt 800 reimbursement scheduled 600 for 2011 400 200 ▪ Total net debt of €3.2 Bln, 0 with an average life of 2.6 2011 2012 2013 2014 +2015 years Debt structure as of June 2011 ▪ Average interest rate of 4.1
Slide 23: Disclaimer
Disclaimer RCA figures except otherwise noted. Matters discussed in this presentation may constitute forward-looking statements. Forward-looking statements are statements other than in respect of historical facts. The words “believe,” “expect,” “anticipate,” “intends,” “estimate,” “will,” “may,” "co
Slide 24: Investor Relations team
Investor Relations team Tiago Villas-Boas, Head of IR Inês Santos Maria Borrega Pedro Pinto Samuel Dias +351 21 724 08 66 investor.relations@galpenergia.com www.galpenergia.com Results & presentation weblink www.galpenergia.com/en/investidor/Relatori os-e-resultados/resultados-trimestrais