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LISBON (Reuters) -Portugal’s Galp Energia on Tuesday reported a six-fold rise in adjusted first-quarter profit on soaring global crude prices and higher production, but its shares slipped as the result still fell short of market expectations.
The oil and gas group said in a statement adjusted net profit rose to 155 million euros ($162.8 million) from 26 million a year earlier, below the 185 million euros expected on average by 19 analysts polled by the company.
Its shares were down 3% at 10.96 euros in morning trading in Lisbon.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) increased 74% to 869 million euros, in line with predictions. The adjustments are to reflect changes in the company’s crude stock.
Oil companies have been benefiting from global crude prices surging to their highest in nearly 14 years during the first quarter as sanctions on major oil exporter Russia over its invasion of Ukraine fuelled concerns about tight supplies.
The company said it “successfully captured the stronger macro conditions, namely in the upstream and industrial segments”, despite high commodity price volatility putting pressure on downstream activities such as refining.
In a research note, RBC Capital Markets said that at the operating level, “results were better in the upstream while weaker than expectations in both refining and midstream, as well as commercial”, with logistical issues weighing on operations.
Still, its share of oil and gas production from projects in which it has a stake, mainly in Brazil, rose 5% to 129,500 barrels of oil equivalent per day.
Its refining margin also rose to $6.8 a barrel in the January-March period from $1.9 in the same period last year, when the country was heavily affected by COVID-19 restrictions, and $5.50 in the previous three months, Galp said.
Galp said it had also agreed to acquire photovoltaic and wind projects to develop 4.8 GW of capacity in nine Brazilian states, which would double its global renewable capacity under development in Brazil, Spain and Portugal.
It plans to reach 4 GW of installed capacity by 2025 and 12 GW by 2030.
($1 = 0.9523 euros)
Reporting by Sergio Goncalves; Editing by Louise Heavens and Jan Harvey
