Galp Energia, SGPS, S.A. (GLPEY) Q3 2025 Earnings Call Prepared Remarks Transcript

Galp Energia reported robust Q3 2025 operational performance, with Group EBITDA reaching EUR 911 million, driven by sustained upstream production of 115,000 barrels per day and favorable refining margins. Upstream RCA EBITDA was EUR 464 million, with an IFRS adjustment for the Tupi field leading to an expected EUR 80 million net cash payment in Q1 2026. The refining segment achieved a strong realized margin of $9.5, capitalizing on supportive market conditions, and is currently undergoing a planned turnaround that will also accelerate low-carbon project execution.

Analysis

Galp Energia (OTCPK:GLPEY) demonstrated robust operational performance in Q3 2025, with Group EBITDA reaching EUR 911 million, reflecting strong momentum across its businesses. This positive outcome was primarily driven by sustained upstream production of 115,000 barrels per day, slightly exceeding Q2 levels due to high fleet availability, and the successful capture of favorable refining margins. The company reported a strong realized refining margin of $9.5, capitalizing on supportive light and middle distillates market conditions.

Upstream RCA EBITDA increased quarter-on-quarter to EUR 464 million, underscoring efficient operations. An IFRS adjustment for past earnings from the Tupi field, reflecting a new tract participation of 9.06%, will result in an expected net cash payment of approximately EUR 80 million in Q1 2026, clarifying the historical earnings structure.

The refining segment is currently undergoing a large, planned turnaround expected to conclude by mid-November, a critical maintenance activity. Importantly, Galp is utilizing this period to accelerate its low-carbon projects, highlighted by the recent receipt of its first electrolyzer module, signaling progress in its energy transition strategy.

Key Decisions for Investors

• Investors should acknowledge the sustained operational strength and favorable market capture demonstrated by Galp Energia's Q3 2025 results, which support a positive outlook for its core businesses.
• Monitor the progress and successful completion of the planned refining turnaround, as well as the acceleration of low-carbon projects, as these initiatives are crucial for future operational stability and strategic growth.
• Factor in the anticipated EUR 80 million net cash payment in Q1 2026 related to the Tupi field IFRS adjustment, understanding its impact on near-term cash flow while recognizing it resolves past earnings recognition.