Galp’s bumper profits fail to offset loss of €1Bn capitalisation

The rise in profit reported by Galp this Monday did not prevent a drop in the company’s share price, as falling crude oil prices put pressure on the sector.

The oil company saw its market capitalization fall by more than €1Bn over the last two sessions, following a 3.25% decline in its share price to €19.38 on Monday.

Galp Energia’s results for the first six months of the year were thus insufficient to offset the impact of falling oil prices on its stock.

Although the company saw profits rise 44% to €812 million in the first half—surpassing analyst expectations—its shares fell as much as 4.69% on Monday, hitting a more-than-one-week low.

The pullback in crude oil prices may explain the market movement. With the US and Iran halting attacks in the Middle East, investors anticipate that delegations from both countries will return to the negotiating table in the near future. Despite ongoing disruptions in two key global trade shipping lanes—the Strait of Hormuz and the Red Sea—oil prices plunged by more than 10%, with the European benchmark trading below the US$90-per-barrel mark.

Dividend revision

Monday’s market movement served as a correction to the oil company’s recent stock market rally. The company’s financial indicators remain robust, according to Bloomberg Intelligence analyst Salih Yilmaz; results from the “midstream” division, an upward revision of 2026 forecasts, and a 10% dividend hike all point “to greater confidence [on the part of the oil company] regarding cash generation this year.”

“Higher refining margins and trading activities more than offset a slight shortfall in the upstream business, demonstrating that the outlook for 2026 does not hinge solely on the gradual production ramp-up at the Bacalhau project,” the analyst adds, referring to the Brazilian pre-salt project that the company expects to have fully operational next year. The goal is to extract 40,000 barrels per day, which could generate approximately €400 million annually in operating cash flow.

In the first six months of the year, Galp’s replacement cost EBITDA (RCA EBITDA) surged 47% to €2,216 million compared to the previous period.

The company raised its EBITDA forecast for the remainder of the year to €4Bn—up from the previously expected €2.6Bn. According to XTB analysts, this is driven by “higher Brent prices, stronger realised refining margins, and a greater contribution from renewable energy.”

The listed company also acknowledged a potential future review of its dividend policy.

After announcing a payout increase for this year, Galp stated that its dividend policy could be modified to “continue rewarding shareholders in the best possible way.”

In an interview with the business daily Negócios, Co-CEO Maria João Carioca stated: “Given the level of portfolio activity, it is important to convey to the market that if we close a deal like the Moeve transaction, we will possess highly significant information.

Consequently, we can review the distribution policy to ensure that—even after the change in scope resulting from the Moeve deal—Galp can continue to reward shareholders optimally. The aim is always to ensure that the policy, even if the portfolio changes, continues to deliver the returns shareholders expect.”

Source: Negócios