Growth delivered Q1 Highlights Working crude production of 17.2 thousand barrels per day, up 18% qoq Galp Energia refining margin up 22% yoy (equivalent to 1 Usd/bbl) Natural gas sales up by 12% qoq Adjusted proforma…
Adjusted net income up by 30% Inventory effect of 21 M due to the increase in crude and oil products prices this quarter Tax rate decrease from 28% to 19% positively impacted net income Q1 2007 Net Income (M) (21) (3) 143…
Adjusted EBITDA increased by 5% without NG transport and regasification activities Block 14 continuing to deliver growth R&M higher contribution driven by improvement on refining margins Stable G&P EBITDA performance yoy on…
Stagnant Iberian market Higher prices not allow oil internal consumption to increase Rainy weather of last months of 2006 and warm weather in Q1 clearly affected demand Portuguese natural gas market Iberian Oil market (M ton) (M…
Business Overview
E&P production souring in a lighter crude Production increase supported by BBLT and TL contribution Lower Kuito production due to works to revamp production by 2008 Total production by field (M bbl) Working Production Equity…
E&P Q1 EBIT represents almost 50% of 2006 Lighter crudes from BBLT and TL reduced discount to Brent Q1 2006 EBIT affected by definition of accounting principles Q1 2007 EBIT confirms sustained level of E&P activity Adjusted EBIT…
Galp Energia refining margin up 22% yoy Spread over benchmark of 2.2 USd/bbl in 2006 and 1.8 Usd/bbl in Q1 2007 Premium to benchmark affected by lower utilization rate and consequently higher fuel & losses Galp Energia vs…
Exports to US market up by 32% yoy Lower utilization rates due to maintenance shutdowns Exports of gasoline to US represent 34% of total exports Sales to Galp Energia clients increased by 1%, despite a weaker Iberian market…
Sales to direct clients supported by Spanish operations Sales to Galp Energia direct customers represented 69% of total raw materials processed Market share maintained despite decrease in the Portuguese market Q1 2007 marketing…
R&M EBIT boosted by refining margins increase Reported EBIT positively impacted by inventory effect of 22 M Adjusted EBIT up 28% impacted by higher refining margins despite Usd depreciation Maintenance shutdowns with a negative…
Natural gas sales up by 12% qoq Consumption of power generators still being affected by strong rainfall occurred in the last months of 2006 Warm weather affected growth of Portuguese market (+3% excluding power generators)…
Constant EBIT on a proforma basis despite lower volumes Unbundling effect strongly impacted yoy reported and adjusted EBIT Stable EBIT on a proforma basis: (i) despite lower volumes and (ii) replacement of electrical volumes by…
Controlled cost structure COGS down by 12% mainly due to lower crude and oil products prices Proforma supply and services increased 2%, despite higher crude production costs driven by ramp up in production Lower personnel cost due…
E&P represents more than 50% of total capex Development of Block 14 and exploration activities in Block 32 Set of minor investments in refineries and construction of new service stations Additional 154 kms of ng distribution network…
Net debt decreased by 178 M Balance Sheet Items (M) Dec. 2006 Mar. 2007 Change Fixed Assets 2,413 2,445 31 Strategic Stock 453 443 (10) Other assets (liabilities) (148) (192) (44) Working Capital 205 194 (11) Net Debt…
Dividend Policy
Dividend proposal up 13% from 2005 2006 Results (M) 755 (30) (220) Already distributed in September 2006 504 50% 2006 dividend Payout 0.304 /share1 ratio Dividend yield2 of 4.1% Reported net Replacement Impact of…
Stable and clear dividend policy Annual Dividend of year n Net income 50% payout replacement x ratio Annual Dividend cost Interim Dividend of year n+1 Annual 50% x dividend of Interim dividend year n Subject to…
Final Remarks
Q1 main events E&P New oil discoveries in Block 32 and Block 14 Confirmation of Block BM-S-11 major discovery (Tupi) Agreement with the Portuguese State for oil exploration and production rights in Alentejos costs R&M…
Short term outlook E&P Drilling campaign in onshore Brazil has just started, 16 wells to be drilled in 2007 R&M Selecting phase of licensing entities of the major equipments for the conversion project Bidding for the EPC…
Galp Energia positioned for growth Adjusted EBITDA Proforma Adjusted EBITDA Q1 07 Q1 06 R&M 58% R&M 56% G&P G&P 34% 29% E&P E&P 8% 15% 192 M +15% 221 M Towards a more balanced portfolio Adjusted EBITDA proforma Q1…
Appendix
Onshore Brazil Review Esprito Santo Basin (12 Blocks) Average area per block of 30 km2 Galp is the operator in 5 blocks Ownership with Petrobras on a 50/50 basis Seismic and geological evaluation under way 4 operated exploration…
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