Galp Energia, Sgps S.a. Class B · EURONEXT:GALP
Galp Energia, Sgps S.a. Class B — Galp Energia — Q2 2012 Earnings Presentation
24 slides from Galp Energia, Sgps S.a. Class B's earnings presentation, Jul 27, 2012
Slide 1: Results & strategy execution update
27 July 2012 Results & strategy execution update FIRST HALF AND SECOND QUARTER 2012 Solid foundations to deliver sustainable value
Slide 2: Agenda
Key highlights Business overview Strategy execution update Final remarks Appendix 2 First half and second quarter 2012 results
Slide 3: Key highlights
Key highlights ▪ Net profit in 2Q12 reached €129 Mln, up 81% YoY ▪ Several high impact wells to be drilled before year end ▪ Sines hydrocracker commissioning to start early August ▪ Sound financial position despite sovereign credit risk 3 First half and second quarter 2012 results
Slide 4: Agenda: Business overview
Key highlights Business overview Strategy execution update Final remarks Appendix 4 First half and second quarter 2012 results
Slide 5: Net profit in 2Q12 reached €129 Mln, up 81% YoY
Net profit in 2Q12 reached €129 Mln, up 81% YoY Profit & Loss (€Mln) 2Q12 2Q11 YoY QoQ 1H12 YoY ▪ EBITDA increase driven by Turnover 4,556 4,356 +5% (5%) 9,351 +15% higher Brazilian oil EBITDA 281 232 +21% +40% 481 +31% production and by LNG E&P 99 75 +32% +13% 187 +53% trading opportunities R&M 104
Slide 6: Sound financial structure enabling flexibility
Sound financial structure enabling flexibility Balance sheet (€Mln) Jun.2012 Mar.2012 Jun - Mar Dec.2011 Jun - Dec ▪ Net debt increase followed capex, working Fixed assets 6,154 6,120 +34 6,002 +152 capital needs and the Work in progress 2,399 2,316 +83 2,174 +225 dividend payment during Strategic s
Slide 7: Short term outlook
Short term outlook ▪ 3Q12 working interest production targeted at c.26 kboepd ▪ Cautious outlook on refining, despite the robust benchmark margin QTD ▪ Marketing volumes increasing QoQ due to seasonality despite harsh Iberian environment ▪ Natural gas volumes to remain stable QoQ supported by electr
Slide 8: Agenda: Strategy execution update
Key highlights Business overview Strategy execution update Final remarks Appendix 8 First half and second quarter 2012 results
Slide 9: Lula development project execution on the right path
Lula development project execution on the right path FPSO Cidade de Paraty (120 kbopd) ▪ FPSO Cidade de Paraty to be allocated to Lula NE area is on schedule to start operations by 2Q13 ▪ Topside modules contracts for the first replicants being built in Brazil already awarded at competitive costs Hu
Slide 10: Preparing world class province development
Preparing world class province development Mozambique – Area 4 ▪ Mamba complex estimated natural gas in place of at least 47 Tcf to 52 Tcf ▪ Unitisation discussions ongoing with Area 1 and Coral-1 appraisal activities underway to better understand the reservoir ▪ 1,850 km2 3D seismic campaign conclu
Slide 11: Several high impact wells to be drilled before year end
Several high impact wells to be drilled before year end BM-S-8 BM-S-24 Potiguar Carcará well reached Rig secured to start key 1st exploration well scheduled already c.6,200 metres, with drilling phase in September for September to de-risk a high results expected by August with results expected in 4Q
Slide 12: Exploration acreage addition materializing strategy outlined
Exploration acreage addition materializing strategy outlined Aljubarrota-3 concession ▪ Entering in early exploration phase with a material stake, with an option to become operator ▪ Aljubarrota-3 concession is more gas prone with 1.3 bln boe of exploration resources1 ▪ Alcobaça #1 exploration well
Slide 13: Sines hydrocracker commissioning to start early August
Sines hydrocracker commissioning to start early August Sines refinery ▪ 571 of the 585 new systems already handed-over to the refinery ▪ Hydrocracker commissioning expected to take 60 days to reach full capacity ▪ Additional flexibility to adjust production yield to market conditions 13 First half a
Slide 14: Sound financial position despite sovereign credit risk
Sound financial position despite sovereign credit risk Cost of debt Debt average life Available credit lines (%) (years) (€ Bln) 4.45 1.50 14.1% 11.5% 0.90 2.13 4.3% 4.4% YE2011 1H12 YE2011 1H12 YE2011 1H12 Galp Energia 5 Yr Portuguese Gvt Bond Current cost of debt of 4.4%, 9.7 Extending debt maturi
Slide 15: Agenda: Final remarks
Key highlights Business overview Strategy execution update Final remarks Appendix 15 First half and second quarter 2012 results
Slide 16: Final remarks
Final remarks ▪ Lula world class development project being successfully executed and with increased operational flexibility ▪ 2H12 exploration campaign focusing on high impact exploration wells ▪ Exploration acreage addition materializing exploration strategy outlined ▪ Upgrade project contributing
Slide 17: Agenda: Appendix
Key highlights Business overview Strategy execution update Final remarks Appendix 17 First half and second quarter 2012 results
Slide 18: Lula-1 project produced close to full capacity during June
Lula-1 project produced close to full capacity during June Main E&P data 2Q12 2Q11 YoY QoQ 1H12 YoY ▪ Lula-1 project drove production growth with an Working interest production kboepd 25.8 21.8 +18% +14% 24.2 +19% average production of 9.2 Net entitlement production kboepd 18.8 13.8 +37% +14% 17.7 +
Slide 19: EBIT 13% higher YoY following refining margin improvement
EBIT 13% higher YoY following refining margin improvement Main R&M data 2Q12 2Q11 YoY QoQ 1H12 YoY ▪ Positive refining margin evolution, despite the Galp Energia refining margin $/bbl 2.5 0.6 n.m. n.m. 1.7 n.m. decrease in premium to Spread over benchmark $/bbl 0.3 1.9 (85%) (80%) 0.9 (49%) benchmar
Slide 20: G&P positively impacted by the trading activity
G&P positively impacted by the trading activity Main G&P data 2Q12 2Q11 YoY QoQ 1H12 YoY ▪ Trading activity with a 42% weight on total natural gas NG supply total sales volumes M m3 1,500 1,187 +26% (13%) 3,225 +16% supply volumes Electrical M m3 223 487 (54%) (39%) 591 (40%) Industrial M m3 515 532
Slide 21: Capex shift to world class upstream projects materialized
Capex shift to world class upstream projects materialized Capital expenditure (€Mln) ▪ Lula project responsible G&P for the majority of E&P R&M E&P - Production development capex E&P - Exploration 590 ▪ Exploration activities in 2Q12 accounted for c.50% of E&P capex 391 202 190 ▪ Downstream capex de
Slide 22: Major debt reimbursement scheduled for the 2013-14 period
Major debt reimbursement scheduled for the 2013-14 period M/L-term debt reimbursement profile (€Mln) 1,000 ▪ Total net debt of €1.2 Bln, 800 with an average life of 4.4 600 years 400 200 ▪ Average interest rate of 0 4.4%, up 34 b.p. YoY 2012 2013 2014 2015 +2016 Debt structure as of June 2012 ▪ Avai
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 Cátia Lopes 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-trimestrai