Q2 2026 Galp Energia SGPS SA Earnings Call

July 27, 2026

Speaker #2: Good morning, ladies and gentlemen. Welcome to Galp's second quarter 2026 results presentation. I will now pass the floor to Joelle Gonzalves-Pereira, Head of Investor Relations.

Speaker #3: Good morning, everyone, and welcome to Galp's second quarter 2026 Q&A session. I'm joined today by our Co-CEOs, Maria João Carioca and João Marques da Silva, as well as the full executive team.

João Gonçalves Pereira: Good morning, everyone, and welcome to Galp's Q2 2026 Q&A session. I am joined today by our Co-CEOs, Maria João Carioca and João Marques da Silva, as well as the full executive team. Before passing the mic for some quick opening remarks, let me start with our usual disclaimer. During today's session, we will be making forward-looking statements that are based on our current estimates. Actual results could defer due to factors outlined in our cautionary statements within the published materials. With this, Maria João, would you like to say a few words?

Speaker #3: But before passing the mic for some quick opening remarks, let me start with our usual disclaimer. During today's session, we will be making forward-looking statements that are based on our current estimates.

Speaker #3: Actual results could differ due to factors outlined in our cautionary statement within the published materials. With this, Maria João, would you like to say a few words?

Speaker #4: Thank you, João, and good morning, everyone. During the second quarter, Galp continued to operate in what we know was a very highly volatile market environment.

Maria João Carioca: Thank you, João, and good morning, everyone. During the Q2, Galp continued to operate in what we know was a very highly volatile market environment. It is therefore rather reassuring to have a high-quality asset base that allows us to capture market tailwinds, sustain our financial performance, and maintain net debt rather stable despite relevant cash outflows during the quarter. Acknowledging this continued market uncertainty, but also the strong operating performance in the H1 of the year, we are updating our full-year EBITDA guidance to circa EUR 4 billion and our operating cash flow guidance to EUR 3 billion. This guidance is based on an average Brent price of $70 per barrel and a refining margin of $10 for the H2 of the year. Furthermore, the board will propose a 10% increase to the 2026 dividend per share.

Speaker #4: It is therefore rather reassuring to have a high-quality asset base that allows us to capture market tailwinds, sustain our financial performance, and maintain net debt relatively stable despite relevant cash outflows during the quarter.

Speaker #4: Acknowledging this continued market uncertainty, but also the strong operating performance in the first half of the year, we are updating our full-year EBITDA guidance to circa $4 billion, and our operating cash flow guidance to $3 billion.

Speaker #4: This guidance is based on an average Brent price of $70 per barrel and a refining margin of $10 for the second half of the year.

Speaker #4: Furthermore, the Board will propose a 10% increase to the 2026 dividend per share, bringing it to $0.70, with the first advancement on this payment to take place in August.

Maria João Carioca: This brings it to EUR 0.70, with the first advancement on this payment to take place in August. This reflects not only the strong results delivered so far in 2026, but also the board's confidence in the resilience and quality of Galp's portfolio across the cycle. Testimony to this quality, our upstream portfolio continued to demonstrate outstanding performance. Legacy assets maintained very strong uptime levels, while the three producer wells at Bacalhau are successfully delivering on the expected ramp-up path and delivering also excellent productivity results. Looking at Namibia, our strategic partnership with TotalEnergies should be soon completed. More importantly, we remain on track to drill a new well in the Mopane complex during the Q4. Overall, we are making steady progress across all key milestones and further strengthening the visibility of Galp's rather unique upstream growth profile for the next decade. João, would you like to complement?

Speaker #4: This reflects not only the strong results delivered so far in 2026, but also the Board's confidence in the resilience and quality of Galp's portfolio across the cycle.

Speaker #4: Testimony to this quality is that our upstream portfolio continued to demonstrate outstanding performance. Legacy assets maintained very strong uptime levels, while the three producer wells at Bacalhau are successfully delivering on the expected ramp-up path and also delivering excellent productivity results.

Speaker #4: Looking at Namibia, our strategic partnership with TotalEnergies should be completed soon. More importantly, we remain on track to drill a new well in the Mopan complex during the fourth quarter.

Speaker #4: Overall, we're making steady progress across all key milestones, and further strengthening the visibility of Galp's rather unique upstream growth profile for the next decade.

Speaker #4: João, would you like to comment?

Speaker #3: Thank you, Maria João. Indeed, this quarter demonstrates that Galp is executing with consistency across multiple fronts. While continuing to deliver strong financial performance, we are also making disciplined strategic decisions that are strengthening the quality of our portfolio and positioning the company for long-term value creation.

João Marques da Silva: Thank you, Maria as well. Indeed, this quarter demonstrates that Galp is executing with consistency across multiple fronts. While continuing to deliver strong financial performance, we are also making disciplined strategic decisions that are strengthening the quality of our portfolio and positioning the company for long-term value creation. Earlier today, we announced the acquisition of a new wind portfolio. This is a final step in reshaping our renewables business into a stronger and higher quality platform. The 361 MW fully operational portfolio in Spain builds on the acquisition we announced back in April. This takes our total renewable capacity to 2.7 GW, with wind now at about 30% of the mix, and lifts our pro forma renewables EBITDA to roughly EUR 110 million for 2026. With this acquisition, our renewable portfolio gains greater scale, a better balance across technologies, and increased resilience.

Speaker #3: Earlier today, we announced the acquisition of a new wind portfolio. This is the final step in reshaping our renewables business into a stronger and higher-quality platform.

Speaker #3: The $361 million fully operational portfolio in Spain builds on the acquisition we announced back in April. This takes our total renewable capacity to 2.7 gigawatts, with wind now at about 30% of the mix.

Speaker #3: And lifts our pro forma renewables EBITDA to roughly $110 million for 2026. With this acquisition, our renewables portfolio gains greater scale and better balance across technologies, as well as increased resilience.

Speaker #3: It also gives us more flexibility and optionality as we evaluate future partnership opportunities and alternative ownership structures. In parallel, we are also making progress in Downstream.

João Marques da Silva: It also gives us more flexibility and optionality as we evaluate future partnership opportunities and alternative ownership structures. In parallel, we are also making progress in downstream. Discussions with the shareholders of Moeve continue to move forward in a constructive way. All parties remain aligned on the strategic rationale and potential benefits of the transaction. By bringing our downstream activities together, we believe the combined business will be better positioned to unlock value, increase scale, strengthen its competitiveness, and reinforce their strategic position. Our focus remain unchanged, ensuring that any transaction is the right one for Galp and its shareholders, delivering sustainable long-term value. To conclude, Galp delivered both strong financial results and strong strategic execution this quarter, a result of the continued commitment of our people and our partners. Together, we are building a stronger company, reshaping our portfolio, and reinforcing Galp distinctive investment case for the years ahead.

Speaker #3: Discussions with the shareholders of Mueve continue to move forward in a constructive way. All parties remain aligned on the strategic rationale and potential benefits of the transaction.

Speaker #3: By bringing our downstream activities together, we believe the combined business will be better positioned to unlock value, increase scale, strengthen its competitiveness, and reinforce its strategic position.

Speaker #3: Our focus remains unchanged: ensuring that any transaction is the right one for Galp and its shareholders, delivering sustainable, long-term value. To conclude, Galp delivered both strong financial results and strong strategic execution this quarter.

Speaker #3: This is a result of the continued commitment of our people and our partners. Together, we are building a stronger company, reshaping our portfolio, and reinforcing Galp's distinctive investment case for the years ahead.

Speaker #3: We are now happy to take your questions, Operator. We can start the Q&A.

João Marques da Silva: We are now happy to take your questions. Operator, we can start the Q&A.

Speaker #2: Thank you. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced.

Operator: Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To ensure everyone has the opportunity to ask a question today, please limit yourself to just two questions. Thank you. We will now go to the first question. One moment, please. Your first question today comes from the line of Biraj Borkhataria from RBC. Please go ahead.

Speaker #2: To ensure everyone has the opportunity to ask a question today, please limit yourself to just two questions. Thank you. We will now go to the first question.

Speaker #2: One moment, please. Your first question today comes from the line of Biraj Bakatoria from RBC. Please go ahead.

Biraj Borkhataria: Hi. Thanks for taking my questions. First one is just on the renewable portfolio. You've obviously made a move to hybridize that. Just a broad question of whether you see yourselves as owners of that portfolio longer term, because it feels like this is the sort of final step to looking to sell down, as you make it more robust. Second question is on distribution. Raised the dividend, but no change in the buyback today. Even if I look at your macro assumptions, which look conservative, it looks like the buyback should be much higher. I'm just wondering how you're thinking about the cadence of updating that guidance or whether you're just going to look to 2027 to top it up, or that would be a three-tier event. Thank you.

Speaker #5: Hi. Thanks for taking my questions. The first one is just on the renewable portfolio. You've obviously made a move to hybridize that, so just a broad question of whether you see yourselves as owners of that portfolio longer term?

Speaker #5: Because it feels like this is the sort of final step to looking to sell down, as you make it more robust. And then, the second question is on distributions.

Speaker #5: Raise the dividend, but no change in the buyback today. Even if I look at your macro assumptions, which look conservative, it looks like the buyback should be much higher.

Speaker #5: So I'm just wondering how you're thinking about the cadence of updating that guidance, or whether you're just going to look to 2027 to top it up, or if that would be a Q3 event.

Speaker #5: Thank you.

Speaker #3: Thank you. Thank you, Biraj. On your first one, I will leave the second one to Maria João—you know it quite well. So, we've been actively managing our portfolio across upstream, downstream, and now renewables.

João Marques da Silva: Thank you. Thank you, Biraj. On your first one, I will leave the second one to Maria as well. You know us quite well. We've been managing actively our portfolio across upstream, downstream, and now renewables. Allow me to underline the strategic rationale on the wind transactions and the quality also of the acquired portfolios. For us, maintaining and diversifying the power generation is aligned with the strategy of maximizing the value of the volumes under management across the energy value chain. The recent wind acquisition just reinforces Galp portfolio, building a much more diversified and resilient portfolio with multi-technology, rebalancing the risk, return profile. Let me also emphasize on the energy management commercial angle. It will provide us access to a more stable generation source. It will unlock additional value in ancillary services and reduces the unitary imbalance cost for the entire portfolio.

Speaker #3: So, allow me to end the line. The strategic rationale on the wind transactions and the quality also of the acquired portfolios: for us, maintaining and diversifying the power generation is aligned with the strategy of maximizing the value of the volumes under management across the energy value chain.

Speaker #3: The recent wind acquisition just reinforces Galp's portfolio, building a much more diversified and resilient portfolio, with multi-technology rebalancing the risk-return profile. Let me also emphasize the energy management commercial angle.

Speaker #3: It will provide us access to a more stable generation source. It will unlock additional value in ancillary services and reduce the unitary imbalance cost for the entire portfolio.

Speaker #3: With the Second Wind acquisition, we have reached sufficient scale—what you might call the final step—and diversification, with no further acquisitions targeted at this point.

João Marques da Silva: With the second wind acquisition, we have reached sufficient scale, as you say, the final step, and diversification with no further acquisition target at this point. We are now focused, as you also say, on the best options to optimize capital structure of such position in our power portfolio. Increasing scale and diversification will enhance us to be ready to pursue the partnership structures and increase the resilience of its cash flow generation. In summary, the recent wind transactions strengthen Galp integrated power strategic positioning and increases flexibility to evaluate the strategic partnership opportunities towards ownership, financing structures, alternatives, while retaining optionality in its exposure to the long-term growth of the Iberian power market. Maria as well.

Speaker #3: So we are now focused, as you also say, on the best options to optimize the capital structure of such a position in our power portfolio. Increasing scale and diversification will enhance us to be ready to pursue partnership structures and increase the resilience of its cash flow generation.

Speaker #3: So, in summary, the recent wind transactions strengthen Galp Integrated Power's strategic positioning and increase flexibility to evaluate strategic partnership opportunities regarding ownership, financial structures, and alternatives, while retaining optionality in its exposure to the long-term growth of the Iberian power market.

Speaker #3: Maria João?

Speaker #2: Amazing follow-up, and picking up on your question about share buybacks, Biraj. As João has just indicated, we have a number of moving pieces in our portfolio.

Maria João Carioca: Let me follow up and pick up on your question on share buyback, Biraj. As João just signaled, we have a number of pieces moving in our portfolio, touching upon the share buyback would actually go to a discussion on the distribution policy that we see is something that we would like to engage as we get more visibility on some of those moving parts. In particular, more visibility on what will be the final terms on Moeve. We acknowledge that there may be potential adjustments to the policy. For now, what we wanted to do was to make sure that we could signal the merits of what we see in our portfolio right now. Continued growth ahead of us. Bacalhau is ramping up nicely. Upstream continues to perform rather well.

Speaker #2: So, touching upon the share buyback, what actually goes to a discussion on the distribution policy that we see is something that we would like to engage in as we get more visibility on some of those moving parts.

Speaker #2: And of course, in particular, more visibility on what will be the final terms on Mueve. So, we acknowledge that there may be potential adjustments to the policy, but for now, what we wanted to do was make sure that we could signal the merits of what we see in our portfolio right now.

Speaker #2: So, continued growth ahead of us. Bacalhau is ramping up nicely, upstream continues to perform rather well. So, what we see in the dividends components—and that's why we opted for the 10% increase.

Maria João Carioca: What we see in the dividends components, that's why we opted for the 10% increase. Let me remind you that normally we would be increasing at 4%. This is us putting forward the 10% increase that actually raises the floor of our dividend. With that, we believe that we're signaling trust and belief that we will be able to sustain growth throughout the cycle as we're raising this floor for our overall distributions. Overall, this is a signal of trust. It's always acknowledgment that the H1 of the year was a really positive one. It does not take us to the distribution policy discussion. We believe that one is to be had once we have more visibility, in particular of the Moeve deal. Thank you.

Speaker #2: So let me remind you that normally we would be increasing at 4%. This is, well, us putting forward the 10% increase. That actually raises the floor of our dividend.

Speaker #2: And with that, we believe that we're signaling trust and belief that we will be able to sustain growth throughout the cycle, as we're raising this floor for our overall distributions.

Speaker #2: So overall, this is a signal of trust. It's also an acknowledgment that the first half of the year was a really positive one. It does not take us to the distribution policy discussion.

Speaker #2: We believe that one is to be had once we have more visibility, in particular of the Mueve deal. Thank you. Thank you. Your next question today.

Operator: Thank you. Our next question today comes from the line of Alejandro Vigil from Santander. Please go ahead.

Speaker #2: Comes from the line of Alejandro Vigil from Santander. Please go ahead.

Speaker #5: Yes, hello. Thank you for taking my questions. The first one is about the new guidance of €4 billion EBITDA and €3 billion operating cash flow.

Alejandro Vigil: Yes. Hello. Thank you for taking my questions. The first one is about the new guidance of EUR 4 billion EBITDA and EUR 3 billion operating cash flow. If you can go through these different levels to reach such a high level of operating cash flow in comparison with the EBITDA. The high conversion of this EBITDA into cash. The second question is about the Brazil and the oil export taxes. If you can provide an update on the situation in the country and the impact in your company. Thank you.

Speaker #5: If you can go through these different levels to reach such a high level of operating cash flow in comparison with the EBITDA—so the high conversion of this EBITDA into cash.

Speaker #5: And the second question is about Brazil and the oil export taxes. If you can provide an update on the situation in the country.

Speaker #5: And your input in your company. Thank you.

Speaker #2: Thank you, Alejandro. So, we're updating the guidance fundamentally on the back of what is our continued good performance. You see there that we revise our upstream guidance also in tandem.

Maria João Carioca: Thank you, Alejandro. We're updating the guidance fundamentally on the back of what is our continued good performance. You see there that we revise our upstream guidance also in tandem. This is bringing us fundamentally to the upper part of the interval we had guided to before. In remaining businesses, we're also seeing good indications. We know that the context has been one of considerable volatility, but still as that volatility flows through the balance sheet and our accounts, we see continued strong operational performance, hence the revision of the overall EBITDA to EUR 4 billion, OCF now at EUR 3 billion. We do see that refining margin incorporated in these guidance is one that it has been probably the variable with the most volatility in recent weeks and times. We're seeing spot prices well above what we included in our guidance.

Speaker #2: And this is bringing us fundamentally to the upper part of the interval we had guided to before. And in the remaining businesses, we're also seeing good indications.

Speaker #2: So, we know that the context has been one of considerable volatility. But still, as that volatility flows through the balance sheet and our accounts, we see continued strong operational performance.

Speaker #2: Hence, the revision of the overall EBITDA to €4 billion, OCF now at €3 billion. We do see that the refining margin incorporated in this guidance is one that has been probably the variable with the most volatility in recent weeks and times.

Speaker #2: So we're seeing spot prices well above what we included in our guidance. So we're guiding at numbers that are, you might say, relatively conservative.

Maria João Carioca: We are guiding at numbers that are, you may say, relatively conservative. $13 per barrel at refining margin, $80 on the Brent. All in all, what we believe we can speak to here is maybe a little bit in terms of cash taxes. There is an element that can be further incorporated into the guidance as we normally see cash taxes on upstream being treated, and we have them treated differently from taxes on downstream. The high cash result is to a large extent reflecting the fact that cash taxes on downstream will be coming into our accounts in 2027, whilst the upstream are already flowing through. That informs a lot of the relationship you see between the cash result and the EBITDA. Overall, very strong operational performance. Over 25% of our revised uptick on guidance is coming from operational performance.

Speaker #2: So, $13 per barrel at refining margin, $80 on the Brent. So, all in all, what we believe we can speak to here is maybe a little bit in terms of cash taxes.

Speaker #2: There's an element that can be further incorporated into the guidance, as we normally see cash taxes on upstream being treated—and we have them treated differently from taxes on downstream.

Speaker #2: So, the high cash result is, to a large extent, reflecting the fact that cash taxes on downstream will be coming into our accounts in 2027, whilst the upstream are already flowing through.

Speaker #2: So that informs a lot of the relationship you see between the cash result and the EBITDA. But overall, very strong operational performance—over 25% of our revised uptick on guidance is coming from operational performance.

Speaker #2: Of course, in this context and with all the volatility, the remaining 75% of the uptick in guidance is coming, indeed, from the macro. On Brazil—I think that was the second part of your question, sorry.

Maria João Carioca: Of course, in this context and with all the volatility, the remaining 75% of the uptick in guidance is coming indeed from the macro. On Brazil, I think that was the second part of your question, sorry. What we are seeing in Brazil is a continued concern about how to capture with fiscal policy the current context. We do see a continuation of the export tax. We have been seeking to optimize and make sure that our operational management of the circumstances delivers the best possible results. We have guided you for a total possible income that, even though the timeline for the tax has now been revised by the Brazilian government, we still expect overall impact to be around that order of magnitude. We had initially guided for EUR 100 million. So far, in our accounts, you will find a little under EUR 20 million in cash.

Speaker #2: So, what we're seeing in Brazil is a continued concern about how to capture, with fiscal policy, the current context. So, we do see a continuation of the export tax.

Speaker #2: We have been seeking to optimize and make sure that our operational management of the circumstances delivers the best possible results. We have guided you for a total possible income that, even though the timeline for the taxes has now been revised by the Brazilian government, we still expect the overall impact to be around that order of magnitude.

Speaker #2: We had initially guided for 70 million so far for 100 million I'm sorry. So far, we are at in our accounts, you will find a little under 20 million in cash.

Speaker #2: So, you see that the impacts are actually being actively managed. Overall, we expect our initial estimates to remain. We do see this as something to watch attentively.

Maria João Carioca: You see that the impacts are actually being actively managed. Overall, we expect our initial estimates to remain. We do see this as something to watch attentively. We do hope that the Brazilian government will continue to understand that these are taxes that weigh down on our ability to continue future investments. We will be assessing all our options to protect value, and we will, of course, continue to do so in close association with other operators in the country. We continue to engage with the Brazilian Petroleum and Gas Institute, as we see this as an industry topic, not a Galp-specific topic. Overall, something to watch out closely. Impacts remain contained, and we continue to manage this very actively. Thank you.

Speaker #2: We do hope that the Brazilian government will continue to understand that these are taxes that weigh down our ability to continue future investments.

Speaker #2: We will be assessing all our options to protect value, and we will, of course, continue to do so in close association with other operators in the country.

Speaker #2: We continue to engage with the Brazilian Oil and Gas Association, as we see this as an industry topic, not an account-specific topic. So, overall, it's something to watch closely.

Speaker #2: Impacts remain contained, and we continue to manage this very actively. Thank you.

Speaker #5: Obrigado.

João Marques da Silva: Obrigado.

Alejandro Vigil: Obrigado.

Speaker #2: Thank you. Your next question today comes from the line of Joshua Stone from UBS. Please go ahead.

Operator: Thank you. Your next question today comes from the line of Joshua Stone from UBS. Please go ahead.

Speaker #4: Yeah. Thanks, everyone, and good morning. Two questions, please. Firstly, I wanted a clarification on the distributions. Is it your intention that you will still return at least a third of your CFFO to shareholders?

Joshua Stone: Thanks everyone, and good morning. Two questions, please. Firstly, I wanted a clarification on the distributions. Is it your intention that you will still return at least a third of your CFFO to shareholders? Regardless of the merger, we should expect distribution of more than EUR 1 billion this year if you hit your targets. Just a clarification on that one. Secondly, on the renewables side of the business, are there any synergies connected with these wind assets into integration into your retail portfolio or commercial portfolio? If so, could you walk us through, is there any impact with the Moeve merger on that part of the transaction? Thanks.

Speaker #4: So regardless of the merger, we should expect distributions of more than €1 billion this year if you hit your targets. Just a clarification on that one.

Speaker #4: And then secondly, on the renewables side of the business, are there any synergies connected with these wind assets and integration into your retail portfolio or commercial portfolio?

Speaker #4: And if so, could you walk us through if there is any impact from the Moave merger on that part of the transaction? Thanks.

Speaker #2: Thanks, Josh. Let me start with the distribution questions. As you know, our current policy is for one-third. We have the dividend components growing at a pre-announced rate.

Maria João Carioca: Thanks, Josh. Let me start with the distribution questions. As you know, our current policy is for one-third. We have the dividend components growing at a pre-announced rate. That rate we revised this year from 4 to 10. We do expect that value to be well known already and in advance. The remainder of our distribution is only communicated upon the publication of the results. That is a number that we will be guiding on, or that we will be presenting only upon closing the results. All in all, we haven't touched on our distribution policy thus far, precisely because, as I mentioned before, we do see that with the relative size of the Moeve transaction and with everything that's moving in our portfolio, we may need to discuss our distribution policy.

Speaker #2: So that rate, we revised it this year from 4 to 10. So we do expect that value to be well known already and in advance.

Speaker #2: The remainder of our distribution is only communicated upon the publication of the results, so that is a number that we will be guiding on, or that we will be presenting only upon closing the result.

Speaker #2: All in all, we haven't touched on our distribution policy thus far, precisely because, as I mentioned before, we do see that with the relative size of the Moave transaction, and with everything that's moving in our portfolio, we may need to discuss our distribution policy.

Speaker #2: But for now, we find that that is too soon, and we are remaining within that overall distribution policy. Thank you.

Maria João Carioca: For now, we find that that is too soon, and we are remaining within that overall distribution policy. Thank you.

Speaker #5: Josh, on your second one, I'll go back to my previous comments. On the energy management and commercial angles, as these portfolios will give us additional access to a stable generation source, we will be converging in terms of prices, unlocking additional value.

João Marques da Silva: Josh, on your second one, I will go back to my previous comments on the energy management and commercial angles. As this portfolio will give us additional access to a stable generation source, we will be converging, in terms of prices, unlocking additional value. You know well in the power market, apart from the significant growth that we can see in Iberia with further potential coming for sure from AI technology, but also from increasing ancillary services sophistication. Let me state that ourselves, we are now a top-tier company in intraday trading in 2025 in Iberia. We are the number 1 in solar and the number 2 in wind. Finally, let me also emphasize the connection between gas and power, what we represent in Iberia today, and how this can make all the sense within the decisions that we've just taken. Thank you.

Speaker #5: And in the power market, apart from the significant growth that we can see in Iberia—with further potential coming, for sure, from AI technology but also from increasing ancillary services sophistication.

Speaker #5: And let me state that, as of now, we are a top-tier company in intraday trading in 2025 in Iberia. We are number one in solar and number two in wind.

Speaker #5: And finally, let me also emphasize the connection between gas and power. What we represent in Iberia today, and how these can make all the sense within the decisions that we've just taken.

Speaker #5: Thank you.

Speaker #4: Thanks.

Joshua Stone: Thanks.

Operator: Thank you. Your next question comes from the line of Kate O'Sullivan from Citi. Please go ahead.

Speaker #2: Thank you. Your next question comes from the line of Kate O'Sullivan from Citi. Please go ahead.

Speaker #6: Hi, thanks for taking my question. So just again, coming back to this morning's wind acquisition and the implied valuation, it's around €1.2 million per megawatt.

Kate O'Sullivan: Hi. Thanks for taking my question. Just again, coming back on this morning's wind acquisition and implied valuation around EUR 1.2 million per MW. A bit above what you paid back in April for a slightly younger portfolio. Can you help us to understand the expected equity IRR there? I know you just talked a bit about value creation. A follow-up on that, the average age of the assets, around 20 years. How much of the value creation case is linked to repowering rather than the cash flows from the existing assets? If you could discuss any repowering opportunity within these portfolios, any level of CapEx that would be associated. Thank you.

Speaker #6: So, a bit above what you paid back in April for a slightly younger portfolio. So, can you help us to understand the expected equity IRR there?

Speaker #6: I know you just talked a bit about value creation. And as a follow-up on that, the average age of the assets is around 20 years. So, how much of the value creation case is linked to repowering rather than the cash flows from the existing assets?

Speaker #6: And if you could discuss any repowering opportunities within these portfolios, and any level of ethics that would be associated. Thank you.

João Marques da Silva: This is Pedro. Hi, Kate. To your question, on both portfolios, we are on those cases below 1.2 times per MW. We will have on the second portfolio, we will have no relevant CapEx in the short term. This will be our short term. Our short-term focus will be on the cash generation. Of course, we will not leave aside any repowering opportunity, but that will come further ahead on the cycle. That's well on the high single-digit returns, that's where we are today. Thank you.

Speaker #5: Hi, Kate. So, to your question, on both portfolios we are, on those cases, below 1.2 times per megawatt. On the second portfolio, we will have no capex—no relevant capex in the short term.

Speaker #5: So, this will be our short-term focus. Our short-term focus will be on cash generation. Of course, we will not leave aside any repowering opportunity, but that will come further ahead in the cycle.

Speaker #5: And that's, well, on the high single-digit returns—that's where we are today. Thank you.

Speaker #2: Thank you. Thank you. Your next question today comes from the line of Pasikanth Tilukuru from Jefferies. Please go ahead.

Operator: Thank you. Your next question today comes from the line of Sasikanth Chilukuru from Jefferies. Please go ahead.

Sasikanth Chilukuru: Hi. Thanks for taking my questions. I had two, please. The first was regarding the agreement and the discussions with Moeve. The macro conditions, especially in refining, have changed materially since your announcement back in January. I was wondering if this has changed your discussions regarding valuations or the indicative shares that you have kind of highlighted previously in any form? The second question was related to the dividends to minority shareholders to Sinopec. H1 dividends are at EUR 9 million, very low compared to the EUR 240 million paid last year. This comes as cash flows from the upstream have increased or are increasing materially. Just wanted to understand why these dividends to minorities are low, and how should we think about these dividends as we look into H2 and also into 2027?

Speaker #7: Hi, thanks for taking my questions. I had two, please. The first was regarding the agreement and the discussions with Moave. The macro conditions, especially in refining, have changed materially since your announcement back in January.

Speaker #7: I was wondering if this has changed your discussions regarding valuations, or the indicative shares that you have kind of highlighted previously, in any form.

Speaker #7: The second question was related to the dividends to minority shareholders. To Sinopec, first-half dividends are €39 million, which is very low compared to the €240 million paid last year.

Speaker #7: And this comes as cash flows from the upstream have increased, or are increasing, materially. Just wanted to understand why these dividends to minorities are low, and how should we think about these dividends as we look into the second half?

Speaker #7: And also into 2027.

Speaker #5: Thank you. Thank you, Sasi. And on your—I will take the first one. Well, the Galp Moave transaction, it's a long-term value creation transaction.

João Marques da Silva: Thank you, Sasi. I will take the first one. Well, the Galp-Moeve transaction is a long-term value creation transaction. It will not be affected on the short term by the refining margins. All the discussions we are having are progressing well. Of course, the due diligence process, it is a complex one, but to your point, no interference, no discussions regarding the recent short-term refining margins. They were supportive on both sides, but not really impacting the decision. My best to you as well.

Speaker #5: It will not be affected in the short term by the refining management. All the discussions we are having are progressing well. Of course, the due diligence process is a complex one.

Speaker #5: But to your point, no interference, no discussions regarding the recent short-term refining margins. They were supportive on both sides, but not really impacting the decision.

Speaker #5: My pass summary is wrong.

Maria João Carioca: Hi, Sasi. Thank you for your questions. On the dividends to minority shareholders in Brazil, of course, if you look at our numbers last year, you will see that same line had a higher volume. To an extent, we looked at the profile, and we also looked at the current taxation in Brazil. We managed actively, and we put forward some of the dividend payments to make sure that we enjoyed of fiscal status to those payments. That is the fundamental driver behind this. There is no operational performance issues at all impacting this line. Thank you.

Speaker #2: Hi, Sasi. Thank you for your questions. On the dividends to minority shareholders, this is in Brazil, of course. If you look at our numbers last year, you'll see that that same line had a higher volume. To an extent, we looked at the profile and we also looked at the current taxation in Brazil bills.

Speaker #2: So we managed actively, and we put forward some of the dividend payments to make sure that we enjoyed fiscal status on those payments. And that is the fundamental driver behind this.

Speaker #2: There's no operational performance issues at all impacting this line. Thank you. Thank you. Your next question today comes from the line of Kihami Levi from Morgan Stanley.

Operator: Thank you. Your next question today comes from the line of Guilherme Leão from Morgan Stanley. Please go ahead.

Speaker #2: Please go ahead.

Guilherme Leão: Hi. Good morning. Thank you for taking my questions. Firstly, just going back to the shareholder remuneration discussion. Could I pick your brain about ways to remunerate the shareholder from here? How do you feel about a special div at this point to complete the one-third of CFFO policy vis-a-vis pure buybacks, on top of the normal dividends? Secondly, could you provide us an update on gas monetization and gas trading? Perhaps an update on Venture Global volumes, how much of it is hedged at this point? Also in Brazil, could you talk a bit about how much of your production is currently being sold to Petrobras, how much is being sold to third parties? That would be great. Thank you.

Guilherme Aragao: Hi. Good morning. Thank you for taking my questions. Firstly, just going back to the shareholder remuneration discussion. Could I pick your brain about ways to remunerate the shareholder from here? How do you feel about a special div at this point to complete the one-third of CFFO policy vis-a-vis pure buybacks, on top of the normal dividends? Secondly, could you provide us an update on gas monetization and gas trading? Perhaps an update on Venture Global volumes, how much of it is hedged at this point? Also in Brazil, could you talk a bit about how much of your production is currently being sold to Petrobras, how much is being sold to third parties? That would be great. Thank you.

Speaker #4: Hi, good morning. Thank you for taking my questions. Firstly, just going back to the shareholder remuneration discussion, could I pick your brain about ways to remunerate the shareholder from here?

Speaker #4: How do you feel about a special dividend at this point to complete the one-third of CFFO policy, versus pure buybacks on top of the normal dividends? And then secondly, could you provide us an update on guest monetization and guest trading?

Speaker #4: Perhaps an update on Venture Global volumes—how much of it is hedged at this point? Also, in Brazil, could you talk a bit about how much of your production is currently being sold to Petrobras?

Speaker #4: How much is being sold to third parties? That would be great. Thank you.

Speaker #2: Olá, Guilherme. I'll start with the distributions, and then I think Joanne will pick up on the gas trading. So, what I've been mentioning today on the distributions is a lot, I guess, to a large extent on the way we've been thinking about this.

Maria João Carioca: Hola, Guilherme. I'll start with the distributions, and then I think João will pick up on the gas trading. What I've been mentioning today on the distributions is, to a large extent, the way we've been thinking about this. We look at our distributions policy very much through the cycle, and thus far, the one-third distribution rule has been a steady base on which we've been able to reflect our profile. We are clearly a growth stock, not necessarily one that goes for the dividend yield alone. Thus far, this combination of having a one-third commitment on OCF, and I'll remind you that we have a distribution index to OCF, not free cash flow. That also helps having visibility on how it is that we are connecting our distributions to our operational performance.

Speaker #2: So, we look at our distributions policy very much through the cycle. And thus far, the one-third distribution rule has been a steady base on which we've been able to reflect our profile.

Speaker #2: So, we are clearly a growth stock, not necessarily one that goes for the dividend yield alone. So, thus far, this combination of having a one-third commitment on OCF—and I'll remind you that we have a distribution indexed to OCF, not free cash flow—

Speaker #2: So, that also helps—having visibility on how it is that we're connecting our distributions to our operational performance. On this basis, what we see right now is that we do have a number of changes coming up in terms of how our profile, our results, and EBITDA generation will evolve over the coming months.

Maria João Carioca: On this basis, what we see right now is, we do have a number of changes coming up in terms of how our profile and our results and EBITDA generation will evolve over the coming months. Visibility on those specific terms will be critical for us to then have a sound discussion on how we see this distribution policy moving forward. The priorities remain the same, right? We continue to aim to have a distribution policy that is first and foremost very reflective of our performance and our equity story. We, of course, keep track of how the industry is adjusting, and we aim to continue to be competitive in terms of overall distributions. We also expect those distributions to be sustainable in the sense that we want to have a dividend floor that is stable, that is clear to all our shareholders through the cycle.

Speaker #2: Visibility on those specific terms will be critical for us to then have a sound discussion on how we see this distribution policy moving forward.

Speaker #2: But the priorities remain the same, right? So we continue to aim to have a distribution policy that is, first and foremost, very reflective of our performance and our equity story.

Speaker #2: We, of course, keep track of how the industry is adjusting, and we aim to become and continue to be competitive in terms of overall distributions.

Speaker #2: We also expect those distributions to be sustainable, in the sense that we want to have a dividend floor that is stable and clear to all our shareholders through the cycle.

Speaker #2: And then we use share buybacks as the adjustment factor, if you'd like, whenever there is indeed a tailwind that allows us to have an additional distribution going on.

Maria João Carioca: We use share buybacks as the adjustment factor, if you'd like, whenever there is indeed a tailwind that allows us to have an additional distribution going on. Overall, we do expect our distribution policy to retain these aspects. We do see the portfolio as having continued performance to sustain a very competitive distribution policy. We will be looking into as to whether the current design of that distribution policy is the best to continue to deliver on these objectives as we see fundamental movements in the portfolio. No fundamental changes in the goals. A willingness to adjust if a moving portfolio requires a moving distribution policy, but not now, only once we have sufficient visibility. Thank you.

Speaker #2: So, overall, we do expect our distribution policy to retain these aspects. We do see the portfolio as having continued performance to sustain a very competitive distribution policy.

Speaker #2: We will be looking into whether the current design of that distribution policy is the best to continue to deliver on these objectives, as we see fundamental movements in the portfolio.

Speaker #2: So, no fundamental changes in the goals. There is a willingness to adjust if moving the portfolio requires a moving distribution policy, but not now—only once we have sufficient visibility.

Speaker #2: Thank you. Thank you.

Operator: Thank you.

João Marques da Silva: Hi, Guilherme. On your second one related with the gas. First, just to highlight, we have no changes

Speaker #5: Hi, Guilherme. On your second one related to gas—so, first, just to highlight, we have no changes in our hedging strategy. For 2026, it's 70% hedged.

João Marques da Silva: In our hedging strategy, we have a 2026 70% hedge. Venture Global is delivering according to plan. Brazil, it's a regional play. We are acting on the wholesale side, increasing volumes, taking the benefit from our equity position, and that's all. Thank you.

Speaker #5: Venture Global is delivering according to plan. And in Brazil, it's a regional play. We are acting on the wholesale side, increasing volumes and taking benefit from our equity position.

Speaker #5: And that's all. Thank you.

Speaker #4: Understood. Brigado.

Guilherme Leão: Understood. Obrigado.

Guilherme Aragao: Understood. Obrigado.

Speaker #2: Thank you. Your next question comes from the line of Inatio Dominesh from JB Capital. Please go ahead.

Operator: Thank you. Your next question comes from the line of Ignacio Domenech from JB Capital. Please go ahead.

Ignacio Domenech: Hi. Yes, thank you for taking my questions. My first question is on your gas sourcing. If I'm not mistaken, significant volumes from Algeria and Nigeria expire next year. I was wondering what is your strategy and your ongoing conversations in terms of gas sourcing for the next year, and how we should think on this going forward. You'd rather have more exposure to spot prices, to long-term secured contracts? My second question is regarding your strategy given the significant changes and optimization of the portfolio. I was wondering when would you be able to update the market on your longer-term strategy, if we could expect a Capital Markets Week in 2027? I would assume this is contingent to some of the ongoing partnerships. Maybe you could give us a timeline. That would be helpful. Thank you.

Speaker #6: Hi, thank you for taking my questions. My first question is on gas sourcing, if I'm not mistaken. Significant volumes from Algeria and Nigeria are expiring next year.

Speaker #6: So, I was wondering, what is your strategy and your ongoing conversations in terms of gas sourcing for next year, and how should we think about this going forward?

Speaker #6: You have more exposure to spot prices and to long-term secured contracts. My second question is regarding your strategy, given the significant changes and optimization of the portfolio.

Speaker #6: I was wondering when you would be able to update the market on your longer-term strategy, and if we can expect the Capital Markets Day in 2027.

Speaker #6: I would assume this is contingent on some of the ongoing partnerships. Maybe you could give us a timeline—that would be helpful. Thank you.

Pedro Marques: Hi, Ignacio. On your first one, we really enjoy our gas portfolio as a diversified portfolio and highly competitive. On your point, of course, we are interested on the North African contracts that we have. It's true that some of them will expire soon. We are having conversations on that, no further updates to give you. Only to reemphasize, we really enjoy our position in gas, in LNG trading, and diversification and competitiveness are key for us, and we will try to keep those as a key factor to our position in the world markets. Thank you.

João Marques da Silva: Hi, Ignacio. On your first one, we really enjoy our gas portfolio as a diversified portfolio and highly competitive. On your point, of course, we are interested on the North African contracts that we have. It's true that some of them will expire soon. We are having conversations on that, no further updates to give you. Only to reemphasize, we really enjoy our position in gas, in LNG trading, and diversification and competitiveness are key for us, and we will try to keep those as a key factor to our position in the world markets. Thank you.

Speaker #5: Hi, Ignacio. On your first one, we've enjoyed our gas portfolio as a diversified portfolio and highly competitive. So on your point, of course, we are interested in the North African contracts that we have.

Speaker #5: It's true that some of them will expire soon. We are having conversations on that, but no further updates to give you. So, only to re-emphasize, we really enjoy our position in gas and LNG trading.

Speaker #5: Diversification and competitiveness are key for us, and we will try to keep those as key factors for our position in the world markets.

Speaker #5: Thank you.

Speaker #2: So let me pick up on the second part of your question. If I understood correctly, you're wondering whether we'll have an updated strategy and a possible Capital Markets Day anytime soon.

Maria João Carioca: Let me pick up on the second part of your question. If I understood correctly, you're wondering as to whether we'll have an updated strategy and a possible Capital Markets Week anytime soon. Ignacio, we're very focused on execution, to be clear and to be honest. We have the Moeve transaction ongoing. We have a number of movements to our portfolio, that is clearly taking up our attention span, so to say, we feel that upon closure of those transactions, we will, in any case, have a lot more visibility and a lot more grounds to have a clear communication. Now, having said that, your challenge is a fair one, we do acknowledge that an update and a consolidated whole estate could enhance market understanding.

Speaker #2: Ignacio, we're very focused on execution, to be clear and to be honest. So, we have the Muebe transaction ongoing. We have a number of movements to our portfolio.

Speaker #2: And that is clearly taking up our attention span, so to say. And we feel that, upon closure of those transactions, we will in any case have a lot more visibility and a lot more grounds to have a clear communication.

Speaker #2: Now, having said that, your challenge is a fair one, so we do acknowledge that an update, and a consolidated and holistic date, could enhance market understanding.

Speaker #2: We are trying to make sure that we step in and give as much transparency and as much clarity on our strategic rationale as we move through our portfolio changes.

Maria João Carioca: We are trying to make sure that we step in and give as much transparency and as much clarity on our strategic rationale as we move through our portfolio changes. We believe that once we gain further visibility and we are further along this set of execution challenges actually that we have, then we will be in better conditions to communicate on the overall consolidated position and what this means in terms of full visibility for our strategic rationale on portfolio changes. Thank you.

Speaker #2: And we believe that once we gain further visibility and we are further along this execution challenge—actually, this set of execution challenges that we have—then we'll be in better conditions to communicate on the overall consolidated position and what this means in terms of full visibility for our strategic rationale and portfolio changes.

Speaker #2: Thank you.

Speaker #6: Thank you.

Ignacio Domenech: Thank you.

Speaker #2: Thank you. Your next question today comes from the line of Michele Della Vigna from Goldman Sachs. Please go ahead.

Operator: Thank you. Your next question today comes from the line of Michele Della Vigna from Goldman Sachs. Please go ahead.

Speaker #4: Thank you very much. Two questions on downstream. First, with refining, I was wondering if you could tell us what is your current state of margins and whether you have any major turnaround in the second half.

Michele Della Vigna: Thank you very much. Two questions on downstream. First, with refining, I was wondering, could you tell us what is your current state of margins and whether you have any major turnaround in the H2? Also, the HVO plant should start up relatively soon. I was wondering if you could update on the startup timing there. Secondly, on the Moeve joint venture, could you perhaps lay out what the remaining hurdles are to define that partnership, and whether there is any early views of how much financial leverage those two entities, the marketing and the industrial one, could take on when the joint venture is fully established? Thank you. Hi, Michele. On a couple of ones. On the first one, the spot margins clearly above $30. Just reminding that, as Maria João alluded, we are assuming $13 per barrel on our estimations.

Speaker #4: Also, the HVO plant should start up relatively soon. I was wondering if you could update us on the startup timing there. And then secondly, on the Muebe joint venture, could you perhaps lay out what the remaining hurdles are to define that partnership?

Speaker #4: And whether there are any early views on how much financial leverage those two entities—the marketing and the industrial one—could take on when the joint venture is fully established.

Speaker #4: Thank you.

Speaker #5: Hi, Michelle. So, on a couple of points, on the first one: the spot margins are clearly above $30. Just a reminder, as Maria João alluded to, we are assuming $13 per barrel in our estimations.

João Marques da Silva: Hi, Michele. On a couple of ones. On the first one, the spot margins clearly above $30. Just reminding that, as Maria João alluded, we are assuming $13 per barrel on our estimations. We have, let's call it, a small, short downtime expected in September. It's very minor. We are keeping our throughput really high on between the 80 and 85, and that's where we stay at this point. On the HVO, H2

Speaker #5: We have, let's call it, a small, short downtime expected in September, but it's very, very, very minor. So we are keeping our throughput really high, between 80 and 85.

Pedro Marques: We have, let's call it, a small, short downtime expected in September. It's very minor. We are keeping our throughput really high on between the 80 and 85, and that's where we stay at this point. On the HVO, H2

Speaker #5: And that's where we stay at this point. On the HVO, H2, startups, so we are we have construction ending by year-end. And COD should be met next year early next year.

João Marques da Silva: startups. We have construction ending by year-end, and COD should be met next year, early next year. On the second one, on the hurdles in Moeve, well, that's a market standard. On the retail side, we see a net debt to EBITDA between three and four times, and on industrial, the ratio goes up one time. That's where we are. At this point, complexities on the due diligence and nothing else but that. Thank you.

Speaker #5: On the second one, so on the hurdles in Muebe, we—well, that's a market standard. So, on the retail side, we see a net debt-to-EBITDA between 3 and 4 times, and non-industrial, the ratio goes up one time.

Speaker #5: That's where we are. At this point, the complexities are on the due diligence and nothing else but that. Thank you.

Speaker #4: Thank you.

Michele Della Vigna: Thank you.

Speaker #2: Thank you. As a reminder, if you would like to ask a question, please press *11 on your telephone and wait for your name to be announced.

Operator: Thank you. As a reminder, if you would like to ask a question, please press star one one on your telephone and wait for your name to be announced. To ensure everyone has the opportunity to ask a question today, please limit yourselves to just two questions. Thank you. We will now take the next question. The next question today comes from the line of Paul Redman from BNP Paribas. Please go ahead.

Speaker #2: To ensure everyone has the opportunity to ask a question today, please limit yourselves to just two questions. Thank you. We will now take the next question.

Speaker #2: And the next question today comes from the line of Paul Redman from BNP Paribas. Please go ahead.

Speaker #7: Hi, guys, and thank you very much for your time. My first question is just on CAPEX. You guided to net CAPEX for 2025 to 2026, I think it was, of €0.8 billion a year.

Paul Redman: Hi, guys, thank you very much for your time. My first question was just on CapEx. You guided to net CapEx 2025 to 2026, I think it was of EUR 0.8 billion a year. If my numbers are right, 2025 was EUR 100 million, H1 has been EUR 800 million, then you've got the deal to complete, which will be another EUR 400 million. When I add all those up, I've not got much breathing room for the next couple of quarters on organic CapEx. Can you just talk me through that, whether we should be expecting any divestment proceeds to come in? My second question is, just to be really clear on the distribution program, there won't be any change to the EUR 250 million buybacks you're doing in 2026, the actual cash you're spending.

Speaker #7: If my numbers are right, 2025 was $100 million, 1H has been $800 million, and then you've got the deal to complete, which would be another $400 million.

Speaker #7: When I add all those up, I haven't got much breathing room for the next couple of quarters on organic CAPEX. Can you just talk me through that and whether we should be expecting any divestment proceeds to come in?

Speaker #7: And then my second question is, just to be really clear on the distribution program, there won't be any change to the €250 million buybacks you're doing in 2026—the actual cash you're spending.

Speaker #7: The change will be for 2026 cash when you guide to a one-third of operating cash flow buyback for 2026 cash flow.

Paul Redman: The change will be for 2026 cash when you guide to a one-third of operating cash flow buyback for 2026 cash flow.

Maria João Carioca: Hey, Paul. Let me start with the last one because I think it's the easier one. No, we're not going to be touching upon the EUR 250 million in 2026. Fundamentally, that is the number that plugs into our distribution policy once we did the respective dividend distribution given the results in 2025. Okay, no changes to that. The results for 2025 is known. We published the share buyback number once we had the figure for 2025 results. It's been ongoing. It's been executed at a relatively accelerated pace, that's performed at arm's length by a financial institution that takes it away and executes it in the best way possible. No changes to the total amount in 2026. As for CapEx breathing room for the next quarters, we do expect to land relatively close to what we had expected.

Speaker #2: Hey, Paul. So let me start with the last one, because I think it's the easier one. No, we're not going to be touching upon the €250 million in 2026.

Speaker #2: Fundamentally, that is the number that plugs into our distribution policy. Once we did the respective dividend distribution, given the results in '25. Okay? So, no changes to that.

Speaker #2: The result for '25 is known. We published the share buyback number once we had the figure for '25 results. It's been ongoing. It's been executed at a relatively accelerated pace, but that's performed at arm's length by a financial institution that takes it away and executes it in the best way possible.

Speaker #2: So, no changes to the total amount in 2026. As for CAPEX breathing room for the next quarters, we do expect to land relatively close to what we had expected.

Speaker #2: We may come in slightly above, but we don't expect any major deviations. We do have macro and a number of other elements pushing us forward.

Maria João Carioca: We may come in a bit slightly above, we don't expect any major deviations. We do have macro and a number of other elements pushing us forward. We'll see how it actually lands, I would not be signaling now on a major deviation from those numbers. If anything, slightly above. Thank you.

Speaker #2: So we'll see how it actually lands. But I would not be signaling now on a major deviation from those numbers. If anything, slightly above.

Speaker #2: Thank you.

Speaker #7: Thank you.

Paul Redman: Thank you.

Speaker #2: Thank you. Your next question today comes from the line of Matt Loftin from J.P. Morgan. Please go ahead.

Operator: Thank you. Your next question today comes from the line of Matt Lofting from J.P. Morgan. Please go ahead.

Speaker #4: Thanks for taking the questions. I just wanted to ask you for your thoughts. I mean, Galp has a strong history in pursuing and forming strategic partnerships in businesses and specific assets.

Matt Lofting: Thanks for taking the questions. I just wanted to ask you for your thoughts. Galp has a strong history in pursuing and forming strategic partnerships in businesses and specific assets. When you look now at the ongoing processes that you've talked about with Moeve in the upstream, but also referring a bit more to the merits of partnerships in renewables now as well, can you just sort of summarize the fundamental differences perhaps that you see in what you're trying to optimize or unlock between those two businesses? Secondly, as the processes, if we assume, advance, what sort of the key principles are for how Galp can best ensure an appropriate financial and governance framework for stakeholders in the future? Thank you.

Speaker #4: When you look now at the ongoing processes that you've talked about with Muebe and the upstream, but also referring a bit more to the merits of partnerships in renewables now as well, can you just sort of summarize the fundamental differences, perhaps, that you see in what you're trying to optimize or unlock between those two businesses?

Speaker #4: And then secondly, as the process is—if we assume advance—what are the key principles for how Galp can best ensure an appropriate financial and governance framework for stakeholders in the future?

Speaker #4: Thank you.

João Marques da Silva: Hi, Matt, and thank you for the question. If in the Galp Moeve deal, it's clearly a scale deal, a deal that has a lot of complementary assets on both sides, Portugal and Spain. Clearly, a deal that will build a European platform on the industrial side, a deal that will clearly build on the network and on the retail side, a winning platform also to face the electric mobility CapEx. If we go to the renewable side, we are clearly looking at a much different kind of partnership. We need to look at the financial side of it, the structures and the potential that we have to leverage these assets. Every time I mention what the returns that we are expecting, I remind you, we are speaking about unlevered assets.

Speaker #5: I'm at—and thank you for the question. So in the Muebe-Galp Muebe deal, it's clearly a scale deal—a deal that has a lot of complementary assets on both sides.

Speaker #5: Portugal and Spain. Clearly, a deal that will build a European platform on the industrial side, a deal that will clearly build on the network and on our retail side—a winning platform also to face the electric mobility CAPEX.

Speaker #5: If we go to the renewable side, we are clearly looking at a much different kind of partnership. We need to look at the financial side of it, the structures, and the potential that we have to leverage these assets.

Speaker #5: So, every time I mention the returns that we are expecting, I remind you that we are speaking about unlevered assets. And so, building a bigger-scale platform, also on renewables, and benefiting from the integration that we have on the energy management through the cycle, is really, really important.

João Marques da Silva: Building a bigger scale platform also on renewables and benefiting from the integration that we have on the energy management through the cycle, it's really, really important. Clearly two different animals. On the renewable side, we clearly benefit to have a much more balanced portfolio after these two acquisitions to face that second step. Thank you.

Speaker #5: So clearly, two different animals. But on the renewable side, we clearly benefit from having a much more balanced portfolio after these two acquisitions to face that second step.

Speaker #5: Thank you.

Speaker #2: So Matt, if I understood the second part of your question correctly, you're fundamentally asking about where we stand in terms of capital allocation priorities and how we plan to communicate strategy moving forward.

Maria João Carioca: Matt, if I understood the second part of your question correctly, you're fundamentally asking about how are we standing in terms of capital allocation priorities and how to communicate strategy moving forward. On that, again, we continue to have moving parts in the portfolio that we believe play to an overall strategy of making sure that our capital allocation is consistent with our core businesses, and our ability to deliver an equity story that is very much a growth story hinging on the performance of our upstream assets and their relative quality. Everything that we've been doing to clear up the portfolio speaks to this concern about making sure that we have the right capital allocation to each of the businesses, reflecting their performance, and their growth profile. We expect to continue to do that.

Speaker #2: So on that, again, we continue to have moving parts in the portfolio that we believe play to an overall strategy of making sure that our capital allocation is consistent with our core businesses and our ability to deliver an equity story that is very much a growth story, hinging on the performance of our upstream assets and their relative qualities.

Speaker #2: So, everything that we've been doing to clear up the portfolio speaks to this concern about making sure that we have the right capital allocation to each of the businesses, reflecting their performance and their growth profile.

Speaker #2: We expect to continue to do that. A lot of what we've been doing has been precisely about further de-risking those assets, and a lot of what you saw us doing in upstream has been about that.

Maria João Carioca: A lot of what we've been doing has been precisely about either de-risking those assets, and a lot of what you saw us doing in upstream has been about that. Making sure that Namibia became a sufficiently de-risked asset with a partner that clearly will be an asset in developing the basin as we move forward. When we look to downstream, again, the principle has been one of making sure that the assets have a situation and a context within our portfolio that speaks to partners that can take forwards the transition story that needs to happen in those assets. That we can do so in a way that ring-fences capital expenditures and gives full visibility into what is expected in terms of future performance and fundamentally future CapEx requirements, whilst also giving us the ability to better explore the financing structure of those businesses.

Speaker #2: So, making sure that maybe it became a sufficiently de-risked asset with a partner that clearly will be an asset in developing the basin as we move forward.

Speaker #2: When we look to downstream, again, the principle has been one of making sure that the assets have a situation and a context within our portfolios that speaks to partners who can take forward the transition story that needs to happen in those assets.

Speaker #2: That we can do so in a way that ring-fences capital expenditures and gives full visibility into what is expected in terms of future performance and, fundamentally, future CAPEX requirements, whilst also giving us the ability to better explore the financing structure of those businesses.

Speaker #2: This is giving us the ability to explore the opportunity to have further leverage on these businesses. So, this is the story of what we've been doing.

Maria João Carioca: Giving us the ability to explore the opportunity to have further leverage on these businesses. This is the story of what we've been doing, and I expect that to be the guideline moving forwards, as we continue to go through the portfolio. Same story, very mindful of capital allocation, but very aware of the different values and of the different drivers in our different businesses within the portfolio. Thank you.

Speaker #2: And I expect that to be the guideline moving forward as we continue to go through the portfolio. So, same story—very mindful of capital allocation, but very aware of the different values and of the different drivers in our various businesses within the portfolio.

Speaker #2: Thank you.

Speaker #4: Thanks, both.

João Marques da Silva: Thanks both.

Speaker #2: Thank you. Your next question comes from the line of Nash Tsui from Barclays. Please go ahead.

Operator: Thank you. Our next question comes from the line of Naisheng Cui from Barclays. Please go ahead.

Speaker #4: Good morning. Thanks for taking my questions. Two, please. The first one is on production. You upgraded 2026 production guidance to around 130,000 barrels a day.

Naisheng Cui: Good morning. Thanks for taking my questions. Two, please. The first one is on production. You upgraded 2026 production guidance to around 130,000 barrels a day. Could you please talk about the drivers behind this upgrade, and could we see upside beyond this level? The second question is on refining margin. You mentioned earlier that spot margin is more than EUR 30 per barrel, and your assumption the H2 of the year is EUR 10 per barrel, which seems conservative. I wonder if you could share your view on the margin outlook, please. Thank you.

Speaker #4: Could you please talk about the drivers behind this upgrade, and could we see upside beyond this level? And then, the second question is on refining margin.

Speaker #4: You mentioned earlier that spot margin is more than $30 per barrel, and your assumption in the second half of the year is $10 per barrel.

Speaker #4: Which seems conservative. I wonder if you could share your view on the margin outlook, please. Thank you.

Speaker #2: Okay, let me start with upstream production. I think there are two fundamental drivers behind what we're seeing in terms of our guidance—our updated guidance—for production.

Maria João Carioca: Let me start with upstream production. I think there are two fundamental drivers behind what we're seeing in terms of our updated guidance for production. One is the fact that our legacy assets have been performing rather well. We've actually seen both a lot of commitment from Petrobras, our core partner in Brazil, in making sure that the maintenance and the ability to deliver from those assets. For instance, in Tupi, we're now engaging in a program that is over 40 initiatives to make sure that we drive the productivity of those wells far into their active lives. Good performances in our legacy assets. We've had maintenance with very few unplanned events, and that is also one of the core aspects that we look into when we look at how we guide for the remainder of the year.

Speaker #2: One is the fact that our legacy assets have been performing rather well. We've actually seen both a lot of commitment from Petrobras, our core partner in Brazil, in making sure that the maintenance and the ability to deliver from those assets—for instance, into P. We're now engaging in a program that has over 40 initiatives to make sure that we drive the productivity of those wells far into their active lives.

Speaker #2: So, good performances in our legacy assets. We've had maintenance with very few unplanned events, and that is also one of the core aspects that we look into when we guide for the remainder of the year.

Speaker #2: So, quite a bit of the expected maintenance for this year is well behind us. So we do think that is one of the factors bringing us to the top end of our guidance profile.

Maria João Carioca: Quite a bit of the expected maintenance for this year is well behind us. We do think that that is one of the factors bringing us to the top end of our guidance profile. Having said that, this is planned maintenance. We've been having extremely good performance on that respect, but we always guide thinking into consideration that unplanned events may happen, and we guide for a central scenario. We don't guide for the best possible scenario, so we always have a little bit of a buffer or cushion there, if you'd like, for such eventual circumstances. The real driver behind the change in numbers for our production is, of course, Bacalhau. Bacalhau has been ramping up.

Speaker #2: Having said that, this is planned maintenance. We've been having extremely good performance in that respect. But we always keep in mind that unplanned events may happen, and we guide for a central scenario.

Speaker #2: We don't guide for the best possible scenario, so we always have a little bit of a buffer or a cushion there, if you'd like, for such eventual circumstances.

Speaker #2: Now, the real driver behind the change in numbers for our production is, of course, Bacalhau. Bacalhau has been ramping up. I think we're extremely aligned with Equinor in terms of the fact that this is a profile that we see as taking us to full ramp-up towards the end of the year, as we always mentioned.

Maria João Carioca: I think we're extremely aligned with Equinor in terms of the fact that this is a profile that we see as taking us to full ramp-up towards the end of the year, as we always mention. Having said that, this is a ramp-up, so it will have glitches, fluctuations. You've seen higher numbers early in the year. We are now in three producers, hoping to connect the fourth producer and have it fully online soon enough. A very good path, very much in line with what we were expecting so far, but still, again, being cautious and acknowledging that this is a ramp-up, so guiding for a central scenario and not for our best possible scenario. We're now seeing producers with extremely high flow rates that would give us very good performances. We're guiding for a central scenario, not for the top performances observed to date. Thank you.

Speaker #2: Now, having said that, this is a ramp-up, so it will have glitches and fluctuations. You've seen higher numbers early in the year. We're now on three producers, hoping to connect the fourth producer and have it fully online soon enough.

Speaker #2: So, a very good path, very much in line with what we were expecting so far. But still, again, being cautious and acknowledging that this is a ramp-up.

Speaker #2: So, we're guiding for a central scenario and not for our best possible scenario. We're now seeing producers with extremely high flow rates that would give us very good performances.

Speaker #2: We're guiding for a central scenario, not for the top performances observed to date. Thank you.

João Marques da Silva: Nash, going back to your question on refining margins. Well, we are living a very particular world within the volatility that we have. If you go back to the end of June, we clearly see a different scenario. Of course, escalation on the Middle East conflict, additional attacks on Russian refineries. Of course, they buzz, and they have a clearly very sizable impact on the refining margins that we are having on the spot market. Our prudent approach, assumptions to the H2, we see them as the more consistent ones, considering the fundamentals of the market. Of course, you have all the sensibilities available. You can input those to your model and consider them. We can see margins squeezed by rising input costs.

Speaker #1: Nash, going back to your question on refining margins. Well, we are living a very particular world within the volatility that we have. And if you go back to the end of June, we clearly see a different scenario.

Speaker #1: And of course, escalation on the Middle East conflict, additional attacks on Russian refineries. Of course, they buzzed, and they have clearly a very, very sizable impact on the refining margins that we are having on the spot market.

Speaker #1: But our prudent approach, and our assumptions for the second half, we see as the more consistent ones. Considering the fundamentals of the market, of course, you have all the sensibilities available.

Speaker #1: You can input those to your model and consider them. But we can see margin squeezed by rising input costs. We can also see some decrease in oil product prices, mainly in diesel and jet.

João Marques da Silva: We can see also some decrease on the oil product prices, mainly in diesel and jet, should there be a stable arm of resolution. We also need to consider some demand destruction at this point. There are a number of factors that can also take some pressure out from the spot market, and we think it's the best way to approach our H2. Again, you can consider, you have the sensibilities which we shared, and you can consider them in your model. Thank you.

Speaker #1: Should there be a stable arm of resolution? And we also need to consider some demand destruction at this point. So, there are a number of factors that can also take some pressure out of the spot market.

Speaker #1: And we think it's the best way to approach our second half. But again, you can consider it. You have the sensibilities which we shared, and you can consider them in your model.

Speaker #1: Thank you.

Speaker #4: Very helpful. Thank you both.

Naisheng Cui: Very helpful. Thank you both.

Speaker #2: Thank you. Your next question today comes from the line of Christopher Copeland from Bank of America. Please go ahead.

Operator: Thank you. Your next question today comes from the line of Christopher Kuplent from Bank of America. Please go ahead.

Speaker #4: Thank you very much for taking my questions. The first one goes back to your renewable acquisitions. You've spent just shy of €800 million.

Christopher Kuplent: Thank you very much for taking my questions. The first one goes back to your renewable acquisitions. You've spent just shy of EUR 800 million. I'm just looking at your EBITDA guidance pro forma EUR 110, comparing that to what you gave us earlier for the EBITDA contribution from renewables as more than EUR 30. Are we doing the right maths to sort of say, okay, you have acquired assets at a roughly 10 times plus EBITDA multiple? First question. Second question, can you help us a little bit quantifying that underlift impact in upstream on EBITDA, considering that EBITDA quarter over quarter has barely moved? Would like to understand how much of that you would argue could come back in Q3.

Speaker #4: And I'm just looking at your EBITDA guidance pro forma 110, comparing that to what you gave us earlier for the EBITDA contribution from renewables as more than 30.

Speaker #4: So, are we doing the right math to say, okay, you have acquired assets at roughly a 10-times-plus EBITDA multiple? First question.

Speaker #4: Second question, can you help us a little bit with quantifying that underlift impact in upstream on EBITDA? Considering that EBITDA quarter-over-quarter has barely moved.

Speaker #4: I would like to understand how much of that you would argue could come back in the third quarter.

Speaker #2: So Chris, let me pick up on the underlift one as that's probably the easier one. So it's approximately 60 millions impact from underlift. So the effect there is simply the reflection of what was happening in terms of how we were registering in our accounts the numbers that were at the time that were valid at the time that our partners were actually lifting those cargos versus what is now that we've actually come through on the sales the actual market prices for that.

Maria João Carioca: Chris, let me pick up on the underlift one, as that's probably the easier one. It's approximately EUR 60 million impact from underlift. The effect there is simply the reflection of what was happening in terms of how we were registering in our accounts the numbers that were valid at the time that our partners were actually lifting those cargoes, versus what is now that we've actually come through on the sales, the actual market prices for that. This does bring quite a few swings into our numbers. I will remind you that Q1 was actually positive, so we had a +EUR 50 there. That's, all in all, if you take the +EUR 50 on the quarter plus the number for Q2, it's a significant swing quarter on quarter, EUR 110 million.

Speaker #2: So, this does bring quite a few swings into our numbers. I will remind you that the first quarter was actually positive, so we had a plus 50 there.

Speaker #2: And that's all in all. If you take the plus 50 on the quarter, plus the number for the second quarter, it's a significant swing quarter-on-quarter, 110 million.

Speaker #2: But overall, the mechanics is as I've just described: it's bringing into our accounts at the moment of sale the difference vis-à-vis the prices registered at the time that our partners lift from the wells where we're in partnership.

Maria João Carioca: Overall, the mechanics is that I've just described, it's bringing into our accounts at the moment of sale, the difference vis-a-vis the prices registered at the time that our partners lift from the wells where we are in partnership. I hope this clears your question. Thank you.

Speaker #2: I hope this clears up your question. Thank you.

Speaker #4: Thanks. Yep. Thank you.

Christopher Kuplent: Yep. Thank you.

Speaker #1: And Chris, on your first one—so you're absolutely right. Just to sum up, our underlying assumption on the wind power prices is around €50 per megawatt.

João Marques da Silva: Chris, on your first one. You're absolutely right. Just to sum up, our underlying assumption on the wind power prices are around EUR 50 per megawatt. Indeed, we are looking at 10% returns, again, unlevered assets. Thank you.

Speaker #1: And indeed, we are looking at 10% returns. Again, unlevered assets. Thank you.

Speaker #2: Thank you. Your next question today comes from the line of Ahmed Ben Salem from Odo BHF. Please go ahead.

Operator: Thank you. Your next question today comes from the line of Ahmed Ben Salem from ODDO BHF. Please go ahead.

Speaker #3: Yeah, hi. Thank you for taking my question. So, you raised 2006 EBITDA guidance to around $4 billion, largely reflecting strong brand and refining margins.

Ahmed Ben Salem: Yeah. Hi, thank you for taking my question. You raised the 2026 EBITDA guidance to around EUR 4 billion, largely reflecting strong Brent and refining margins. How much of the upgrade comes from the macro assumptions versus underlying operation and improvement? Thank you.

Speaker #3: So, how much of the upgrade comes from the macro assumptions versus underlying operation and improvement? Thank you.

Speaker #2: Thank you, Ahmed. So, from the total upgrade—I think I mentioned it briefly before—but overall, there's approximately 25% of this upgrade coming from operational drivers.

Maria João Carioca: Thank you, Ahmed. From the total upgrade, I think I mentioned it briefly before, but overall, there's approximately 25% of this upgrade coming from operational drivers, and the remainder is indeed the reflection of the macro tailwind. These operational upgrades are distributed across the portfolio, but all in all, fundamentally accounts for those operational changes that we see in terms of volumes and in terms of actual operational performance. Thank you.

Speaker #2: And the remainder is indeed the reflection of the macro tailwind. So these operational upgrades are distributed across the portfolio. But all in all, fundamentally, account for those operational changes that we see in terms of volumes and in terms of actual operational performance.

Speaker #2: Thank you.

Speaker #3: Thank you.

Ahmed Ben Salem: Thank you.

Speaker #2: Thank you. Your next question today comes from the line of Fernando Abril Monterell from Atlanta. Please go ahead.

Operator: Thank you. Our next question today comes from the line of Fernando Abril-Martorell from Alantra. Please go ahead.

Speaker #5: Yes. Hello, good morning. Thank you for taking my question. I only have one. Based on the comments you've made on the leverage target for the retail co and the industrial co, and also based on the targeted stakes you want to have in each of the subsidiaries, is it possible that the deal could generate an extraordinary dividend upstream to the holdco level, to you guys, to help?

Fernando Abril-Martorell: Yes. Hello, good morning. Thank you for taking my question. Only one. Based on the comments you've made on the leverage target for the retail co and the industrial co, also based on the targeted stakes you want to have in each of the subsidiaries, is it possible that the deal could generate an extraordinary dividend upstream to the whole co level to you guys, to Galp? If so, what would you do with those proceeds? An extra DPS for shareholders or bringing leverage down further? I don't know. Any comments on this would be helpful. Thank you very much.

Speaker #5: And if so, what would you do with those proceeds and extra DPS for shareholders, or bringing leverage down further? I don't know. Any comments on this would be helpful.

Speaker #5: Thank you very much.

Speaker #1: Hi, Fernando. I really understand your question, but it's too early to have an answer. Of course, your options make sense, but we cannot comment on that.

João Marques da Silva: Hi, Fernando. I really understand your question, it's too early to have an answer. Of course, your options make sense, we cannot comment on that. It's too early. We are still triggering all the valuations. We are still triggering all the agreements, it's not the time to speak about that, as Manuel João already alluded to. Thank you.

Speaker #1: It's too early. We are still triggering all the valuations. We are still triggering all the agreements. And it is not the time to speak about that as well, as many already have a little bit.

Speaker #1: Thank you.

Speaker #5: Okay. Thank you.

Fernando Abril-Martorell: Okay. Thank you.

Speaker #2: Thank you. We will now take our final question for today. The final question comes from the line of Satnam Ali from HSBC. Please go ahead.

Operator: Thank you. We will now take our final question for today, the final question comes from the line of Sajjad Ali from HSBC. Please go ahead.

Speaker #6: Hi there. Thanks for taking my questions. I have two, please. The first one is on refining. Can you talk to us about your operational performance at Sines over the past few months?

Sajjad Ali: Hi there. Thanks for taking my questions. Two, please. The first one on refining. Can you just talk to us about your operational performance at Sines over the past few months? I think with the Q1 results, you said you made changes to your hydrocracker to increase the jet yield. I was just wondering if you've made any other operational changes over the past few months. With that, can you just remind us how much flexibility and agility you have in your system to, say, alter the crude slate or the product yield slate on a short-term basis? Secondly, just on the commercial division, the discount mechanisms in place for Spain and Portugal, can you quantify the impact it's had so far this year and your expectations going forward? Thank you.

Sadnan Ali: Hi there. Thanks for taking my questions. Two, please. The first one on refining. Can you just talk to us about your operational performance at Sines over the past few months? I think with the Q1 results, you said you made changes to your hydrocracker to increase the jet yield. I was just wondering if you've made any other operational changes over the past few months. With that, can you just remind us how much flexibility and agility you have in your system to, say, alter the crude slate or the product yield slate on a short-term basis? Secondly, just on the commercial division, the discount mechanisms in place for Spain and Portugal, can you quantify the impact it's had so far this year and your expectations going forward? Thank you.

Speaker #6: I think with the Q1 results, you said you made changes to your hydrocracker to increase the jet yield. I was just wondering if you've made any other operational changes over the past few months.

Speaker #6: And with that, can you just remind us how much flexibility and agility you have in your system to, say, alter the crude slate or the product yield slate on a short-term basis?

Speaker #6: And then secondly, just in the Commercial division, the discount mechanisms in place for Spain and Portugal—can you quantify the impact they've had so far this year and your expectations going forward?

Speaker #6: Thank you.

Speaker #1: So on the first one, Satnam, so it's well, we are having a pretty high throughput. Through the quarter, and we are expecting a higher throughput versus what we were assuming.

João Marques da Silva: On the first one, Sajjad, we are having a pretty high throughput through the quarter, and we are expecting a higher throughput versus what we were assuming. We were assuming around 80 million barrels. We are on the 80 to 85 range. I've mentioned already, so we are expecting light maintenance activities on the hydrocracker in September. Let me also give you some numbers on Sines outputs, which are roughly 45% middle distillates, on which jet accounts for around 10%. We are trying, and we have the flexibility to rise it to 13%. That's where we are looking. At this point, we are on the 14%. The normal is a 10% ratio, and that's what we are expecting. We are expecting to operate with full availability during July and August and having these minor maintenance activities in September. Thank you.

Speaker #1: So we were assuming around 80 million barrels. We are in the 80–85 range, as I’ve mentioned already. We are expecting light maintenance activities on the hydrocracker in September.

Speaker #1: And let me also give you some numbers on Sines. Outputs are roughly 45% middle distillates, of which jet accounts for around 10%. We are trying, and we have the flexibility, to raise it. Looking at this point, we are at 14%.

Speaker #1: The normal is a 10% ratio, and that's what we are expecting. So, we are expecting to operate with full availability during July and August, and to have these minor maintenance activities in September.

Speaker #1: Thank you.

Operator: Thank you. This concludes the Q&A and today's conference call. Thank you for participating. You may now disconnect.

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