Portuguese energy company Galp Energia has lifted its operating profit target for the year, as a widening refining margin offset a decline in output following the sale of its Angolan fields and lower oil prices.
It reported a 12% rise in net profit to €210 million in the third quarter, less than the €241 million expected by analysts, as taxes rose 38% to €434 million, "including €76 million from extraordinary Iberian taxes".
Its adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) - a measure of operational profitability - jumped 35% to €1.06 billion, thanks to a 90% increase in refining margins to $14.6 per barrel in the quarter, it said in a statement.
As a result, the company lifted its EBITDA target for the year to "more than €3.5 billion", up from a previous target of €3.2 billion. The company booked €2.84 billion in EBITDA in the first nine months.
Galp said the rise in quarterly EBITDA reflected a "robust contribution" from the midstream - or oil refining - business, with much stronger refining margins, which offset the effect of the disposal of Angolan fields and lower oil prices.
The midstream business's adjusted EBITDA soared to €342 million in the quarter from €48 million a year earlier, while the upstream - or oil and gas extraction - business's adjusted quarterly EBITDA fell 3% to €594 million.
The energy company's share of oil and gas production from projects in which it has a stake fell 2% to 125,000 barrels of oil equivalent per day (boepd) in the quarter, while Brent oil prices fell to an average of $86.7 per barrel from $100.8 a year ago.
However, it said that, on a comparable basis, its production was up 8%, "supported by the ramp-up of Coral Sul floating liquefied natural gas (FLNG) in Mozambique and stable production in Brazil".
In Brazil, production was almost unchanged at 116,200 boepd, while production at Coral Sul was "close to expected plateau levels", up to 8,900 barrels per day up from 100 barrels a year ago.