Galp Energia, Sgps S.a. Class B · EURONEXT:GALP
Galp Energia, Sgps S.a. Class B — Galp Energia — 9M 2008 Earnings Presentation
23 slides from Galp Energia, Sgps S.a. Class B's earnings presentation, Nov 12, 2008
Slide 1: Nine Months 2008 Results
NINE MONTHS 2008 RESULTS Lisbon, 12 November 2008
Slide 2: Highlights
HIGHLIGHTS Orn energia
Slide 3: Very strong 3Q08 with RC adjusted net profit up 52% YoY
VERY STRONG 3Q08 WITH RC ADJUSTED NET PROFIT UP 52% YoY 3Q 2008 (€ Mln) 9M 2008 (€ Mln) 731 353 282 139 EBITDA NET PROFIT EBITDA NET PROFIT 1 1 RC ADJ. RC ADJ. RC ADJ.1 RC ADJ.1 YoY +33% 52% YoY +3% (6%) • Quarterly favourable refining • G&P presented significant volumes margins and a positive time
Slide 4: RC adjusted net profit of €353 million, down 6%
RC ADJUSTED NET PROFIT OF €353 MILLION, DOWN 6% Replacement Cost IFRS Adjusted 1 9M07 9M08 % Ch. € Million 9M07 9M08 % Ch. 9,124 11,507 +26% Turnover 9,120 11,483 +26% 930 943 +1% EBITDA 712 731 +3% 735 733 (0%) EBIT 526 515 (2%) 46 33 (28%) Associates 46 33 (28%) 589 521 (12%) Net Profit 377 353 (6
Slide 5: Business Overview
BUSINESS OVERVIEW © galp energia
Slide 6: Stable working interest production in 3Q08
STABLE WORKING INTEREST PRODUCTION IN 3Q08 • Crude price up 53% YoY pressed net entitlement production down • Quarterly increase of TL’s working production more than offset Kuito’s natural decline Net Entitlement Production by Field (Mln bbl) Realized Sale Price (Usd/bbl) 1 OPEX/bbl TL 52% (12%) BBL
Slide 7: Refining margins reversed to a positive trend
REFINING MARGINS REVERSED TO A POSITIVE TREND • 25% quarterly increase in fuel margin, or +10.8 Usd/bbl (3Q08 fuel oil’s yield of 16%) • Strong contribution from base oils in a higher margin environment • Volumes down QoQ due to Sines’ refinery outage, which started on 10th of September Galp Energia
Slide 8: Overall market contraction impacted volumes sold
OVERALL MARKET CONTRACTION IMPACTED VOLUMES SOLD • Refining throughput conditioned by Sines’ refinery programmed outage • Iberian demand contracted due to economic environment • Exports down in 3Q08 due to Sines’ outage, notwithstanding strong volumes from nafta and diesel Million tons 3Q08 % YoY 9M
Slide 9: Natural gas volumes up 13% YoY in 3Q08
NATURAL GAS VOLUMES UP 13% YoY IN 3Q08 • First quarter of fully regulated activity in industrial, commercial and residential segments in Portugal • Growth driven by electrical segment, which continued to outperform with volumes up 31% YoY in 3Q08, profiting from lower coal and hydro electric generat
Slide 10: Financial Overview
FINANCIAL OVERVIEW © galp energia
Slide 11: 3Q08 RC adjusted EBIT up 35% YoY underpinned by R&M and G&P
3Q08 RC ADJUSTED EBIT UP 35% YoY UNDERPINNED BY R&M AND G&P 3Q08 RC Adjusted EBIT (€ Mln) • Lower net entitlement production and higher depreciation impacted E&P performance 59 198 • Quarterly favourable refining 111 margin and a positive time lag effect of €32 mln bore on R&M’s operational performa
Slide 12: 3Q08 RC adjusted net profit impacted by financials
3Q08 RC ADJUSTED NET PROFIT IMPACTED BY FINANCIALS • Financial results hit by both devaluation of Real vs Usd, with an impact of €10 mln, and surge in reference rates, which rose 60 bps YoY • Effective tax rate of 22%, impacted by lower IRP paid in Angola 3Q08 RC Adjusted Net Profit (€ Mln) 11 198 (
Slide 13: 3Q08 RC adjusted net profit benefited from R&M performance
3Q08 RC ADJUSTED NET PROFIT BENEFITED FROM R&M PERFORMANCE Replacement Cost IFRS Adjusted 1 3Q07 3Q08 % Ch. € Million 3Q07 3Q08 % Ch. 3,238 3,970 +23% Turnover 3,238 3,970 +23% 283 96 (66%) EBITDA 211 282 +33% 218 8 (96%) EBIT 147 198 +35% 15 11 (28%) Associates 15 11 (28%) 188 (3) n.m. Net Profit 9
Slide 14: R&M segment boosted capex in 3Q08
R&M SEGMENT BOOSTED CAPEX IN 3Q08 3Q08 Capex (€ Mln) • Investment in the E&P mainly concentrated in Block 14 in Angola 49 211 with the development of Tombua- Lândana 128 • The R&M segment accounted for 60% of total investment, partially due to the conversion project and Sines sea terminal 34 • Inves
Slide 15: Cash flow generation enables a strong capital structure
CASH FLOW GENERATION ENABLES A STRONG CAPITAL STRUCTURE Balance Sheet items (€ Mln) Jun. 2008 Sep. 2008 Change Fixed Assets 2,689 2,853 164 Strategic Stock 894 864 (30) Other assets (liabilities) (319) (243) 76 Working Capital 355 219 (137) Net Debt 812 875 63 Equity 2,807 2,817 11 Capital Employed
Slide 16: 3Q08 Highlights
3Q08 HIGHLIGHTS EXPLORATION • Lower net entitlement production due to higher crude price in 2008 & PRODUCTION • Higher depreciation impacted negatively 3Q08 EBIT REFINING • Replacement cost adjusted EBIT up 68% YoY in 3Q08 & MARKETING • Contributed to 56% of replacement cost adjusted EBIT in 3Q08 GA
Slide 17: Financing and Liquidity
FINANCING AND LIQUIDITY © galp energia
Slide 18: Favourable schedule of M/L term debt reimbursement
FAVOURABLE SCHEDULE OF M/L TERM DEBT REIMBURSEMENT Debt structure • Net debt totals €875 Mln Floating M/L-term Fixed Short-term • Average debt maturity of 3.05 years, or 4.98 only considering M/L 87% 47% term debt 53% 13% • Debt is 100% euro denominated • Average interest rate of 5.03% M/L term debt
Slide 19: Robust liquidity position and strong cash flow generation
ROBUST LIQUIDITY POSITION AND STRONG CASH FLOW GENERATION Liquidity and Operating Cash Flow (€ Bln) • Liquidity position robustness and strong cash flow generation from After AGIP and dividend stable businesses secures short- 1.1 payments Strong cash flow generated by stable term refinancing needs 0
Slide 20: Pre-Salt Santos Basin
PRE-SALT SANTOS BASIN © galp energia
Slide 21: Extraordinary success achieved in pre salt Santos Basin
EXTRAORDINARY SUCCESS ACHIEVED IN PRE SALT SANTOS BASIN • Six successful wells were drilled which led to major discoveries (Tupi, Tupi Sul, Caramba, Júpiter, Bem-te-vi and Iara), of which Iara discovery and Júpiter completion were announced in 3Q08 • Development of Tupi is on schedule with an EWT st
Slide 22: 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
Slide 23: 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