Galp Energia, Sgps S.a. Class B · EURONEXT:GALP

Galp Energia, Sgps S.a. Class B — Galp Energia — H1 2008 Earnings Presentation

22 slides from Galp Energia, Sgps S.a. Class B's earnings presentation, Aug 6, 2008

  1. Slide 1: First Half 2008 Results

    FIRST HALF 2008 RESULTS Lisbon, 6 August 2008

  2. Slide 2: Disclaimer

    DISCLAIMER 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,” "continue," “should” and similar expres

  3. Slide 3: Highlights

    HIGHLIGHTS Orn energia

  4. Slide 4: Weak refining environment drove net profit down 25% YoY

    WEAK REFINING ENVIRONMENT DROVE NET PROFIT DOWN 25% YoY Replacement Cost IFRS Adjusted 1 1H07 1H08 % Ch. € Million 1H07 1H08 % Ch. 5,885 7,537 +28% Turnover 5,882 7,512 +28% 646 847 +31% EBITDA 500 449 (10%) 517 725 +40% EBIT 379 316 (17%) 31 22 (29%) Associates 31 22 (29%) 401 524 +31% Net Profit 2

  5. Slide 5: R&M stock effect of €401 mln accounts for the difference

    R&M STOCK EFFECT OF €401 MLN ACCOUNTS FOR THE DIFFERENCE Adjustments to EBITDA IFRS in 1H08 (€ Million) 847 +9 (405) (2) 449 EBITDA IFRS E&P R&M G&P EBITDA RC 1 adjusted 1 Excludes inventory effect and non-recurrent items 5 First Half 2008 Results

  6. Slide 6: Business Overview

    BUSINESS OVERVIEW © galp energia

  7. Slide 7: Production bouncing back with recovery of BBLT

    PRODUCTION BOUNCING BACK WITH RECOVERY OF BBLT • BBLT drilling development activities regaining normal pace • Increase in working production, up 13% QoQ, reflected in net entitlement, notwithstanding surge in crude oil prices Net Entitlement Production by Field (Million bbl) Realized Sale Price (Usd

  8. Slide 8: Refining margins rebounded from previous quarter

    REFINING MARGINS REBOUNDED FROM PREVIOUS QUARTER • Margins up 31% QoQ in Usd and 21% in Euro to 2.6 Eur/bbl • Fuel oil and gasoline cracks, down 62% and 40% in the 2Q08, impacting margins on a yearly basis • 2Q08 refining margins were down 45% and 53% YoY on Usd and Euro basis, respectively Galp Ene

  9. Slide 9: Volumes sold reached 8 mln tons in the 1H08

    VOLUMES SOLD REACHED 8 MLN TONS IN THE 1H08 • Positive contribution from wholesale segment, with volumes up 3.1% YoY in the 1H08 • Exports increased 5.7% YoY in the 1H08, with gasoline weighting 39.0% of 1H08 volumes Million tons 2Q08 % YoY 1H08 % YoY Refining throughput 3.6 (2.9%) 7.1 (1.0%) Total

  10. Slide 10: Natural gas volumes in 1H08 up 20% YoY to 3 Bcm

    NATURAL GAS VOLUMES IN 1H08 UP 20% YoY TO 3 Bcm • All segments posted positive growth on a yearly basis • Strong contribution from electrical and trading segments, which benefited from low hydro levels in Iberia, posting an increase in volumes of 32% YoY in the 1H08 • 2Q08 volumes sales were up 9% Y

  11. Slide 11: Financial Overview

    FINANCIAL OVERVIEW © galp energia

  12. Slide 12: Replacement cost adjusted EBITDA reached €449 mln in 1H08

    REPLACEMENT COST ADJUSTED EBITDA REACHED €449 MLN IN 1H08 • Strong contribution from the E&P business, driven by increase in realized price • Weaker Usd/Eur, as well as a 2Q08 time lag effect amounting to €54 mln hurt operational performance of the R&M division (negative time lag effect for 1H07 and

  13. Slide 13: 2Q08 net profit impacted by the R&M segment

    2Q08 NET PROFIT IMPACTED BY THE R&M SEGMENT Replacement Cost Replacement Cost Adjusted 1 Adjusted1 2Q07 2Q08 % Ch. € Million 1H07 1H08 % Ch. 3,135 4,020 +28% Turnover 5,882 7,512 +28% 274 216 (21%) EBITDA 500 449 (10%) 214 148 (31%) EBIT 379 316 (17%) 12 10 (15%) Associates 31 22 (29%) 166 105 (37%)

  14. Slide 14: 1H08 capex increase driven by E&P segment

    1H08 CAPEX INCREASE DRIVEN BY E&P SEGMENT 1H08 Cashflow (€ Million) 1H08 Capex (€ Million) 78 335 30 216 257 Dividends 68 1241 118 Operations Capex SOURCES USES E&P R&M G&P GALP YoY +45% +67% (20%) +33% Net debt increase 1 Net of dividends received 14 First Half 2008 Results

  15. Slide 15: Net debt impacted by dividend payment of €139 M

    NET DEBT IMPACTED BY DIVIDEND PAYMENT OF €139 M Balance Sheet Items (€ Million) Change vs Change vs Dec. 2007 Mar. 2008 Jun. 2008 Dec. Mar. Fixed Assets 2,584 2,629 2,689 105 60 Strategic Stock 566 679 894 328 215 Other assets (liabilities) (170) (235) (319) (149) (84) Working Capital 180 121 355 17

  16. Slide 16: First Half Highlights

    FIRST HALF HIGHLIGHTS EXPLORATION • Contributed to 28% of replacement cost adjusted EBITDA in 1H08 & PRODUCTION • Realization price up 73% YoY in the 1H08 REFINING • Time lag effect and Usd devaluation hurt refining margins in 1H08 & MARKETING • Direct customers continued supporting volumes in the q

  17. Slide 17: Key Drivers Update

    KEY DRIVERS UPDATE © galp energia

  18. Slide 18: Galp is a key player in Santos Basin

    GALP IS A KEY PLAYER IN SANTOS BASIN Key highlights • Tupi recoverable oil and natural gas between 5 and 8 billion bbl • 1 gas and condensate discovery in BM-S-24 (Júpiter) • 1 oil discovery in BM-S-21 (Caramba) • Evaluation plan already approved • 1 oil discovery in BM-S-8 (Bem-te-vi) • Evaluation

  19. Slide 19: Impact of conversion project higher than initially guided

    IMPACT OF CONVERSION PROJECT HIGHER THAN INITIALLY GUIDED Key highlights Spread diesel vs fuel oil (Usd/bbl) 89 • Main equipment already contracted • Project on track in terms of timing and cost 71 • Subsidy proposal from the Portuguese 56 Government amounts to €150 mln in tax savings after the proj

  20. Slide 20: Agip and Esso retail networks acquisition rationale

    AGIP AND ESSO RETAIL NETWORKS ACQUISITION RATIONALE Refining coverage (%) 1 1 Galp+Agip Galp +Esso 100 Number of sites 1,038 1,553 72 94 Number of CO’s/ 670 /210 995 /585 C-stores Iberian retail 12% 8% market share Volumes (Mton) 9.4 12.4 Iberian dist. oil 12% 16% market share Galp Galp+Esso+Agip 1

  21. Slide 21: Increased Iberian position captures economies of scale

    INCREASED IBERIAN POSITION CAPTURES ECONOMIES OF SCALE Transactions still subject to approval Million Euros by the relevant authorities Supply management and Logistics costs + Fixed costs dilution 695 25 + 35 + 120 + 60 Enterprise value EBITDA Unlocked Estimated Total AGIP + ESSO Stand alone synergi

  22. Slide 22: Investor Relations

    Investor Relations Tiago Villas-Boas Tel.: +351 21 724 08 66 Fax: +351 21 724 29 65 E-mail: tiagovb@galpenergia.com Website: www.galpenergia.com

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