Galp raises 2026 earnings guidance to 5 billion euros after core profit grows 67%
Key Facts
Galp raised its 2026 core earnings guidance to about 5 billion euros from about 4 billion previously, after third-quarter adjusted earnings exceeded analysts’ average estimate. The company said strong operating performance in the first nine months, alongside a review of its outlook for the coming months, strengthened its confidence for the rest of the year and supported another increase in guidance. Replacement-cost-adjusted earnings were 1.52 billion euros for the quarter, up 67% year on year, compared with an average estimate of 1.47 billion euros. Replacement-cost-adjusted net income also rose 68% to 682 million euros, beating an average estimate of 634 million. Galp also raised its full-year operating cash flow guidance to about 3.9 billion euros from about 3 billion previously. The guidance revision follows results showing growth in upstream, industrial and midstream earnings, alongside improved company assumptions for oil, refining and gas prices.
Upstream earnings rose to 708 million euros in the third quarter, compared with 464 million in the same period a year earlier. Coverage published by Reuters via Investing.com attributed the increase to higher production in Brazil as output from the Bacalhau field ramped up, as well as rising oil and gas prices. Galp’s working interest production increased to 131,000 barrels of oil equivalent per day from 115,000 a year earlier, a 14% annual increase. The production gain supports upstream earnings growth, but differs from the driver of performance in refining and processing activities. For the first nine months of 2026, adjusted core earnings totaled 3.74 billion euros, up 54% year on year. The cumulative result forms part of the basis the company said strengthened its confidence in delivering stronger results for the rest of the year.
In the industrial and midstream segment, earnings were 639 million euros, compared with 315 million in the third quarter of 2025. The improvement came as the refining margin rose to 34 dollars per barrel of oil equivalent, versus 9.5 dollars a year earlier, according to company data and published results coverage. Sources linked the wider margin to higher diesel and jet fuel prices and continued global supply disruptions. Despite earnings growth, the segment incurred a negative impact of 125 million euros because of the lag in reflecting oil prices in pricing formulas. Galp raised its 2026 assumption for the realized refining margin to about 25 dollars per barrel of oil equivalent from 13 dollars previously. It also raised its assumption for the average Brent price for the year to 90 dollars per barrel from 80 dollars, and its assumption for the Iberian natural gas price to 55 euros per megawatt hour from 40 euros.
Reported net income did not reflect the strength of adjusted earnings, falling 24% to 201 million euros in the third quarter after the company booked exceptional expenses of 453 million euros. Coverage attributed the expenses to exceptional items, most of which stemmed from the revaluation of unsettled derivatives. In cash flow, free cash flow was 271 million euros, down 50% from the comparable period. Net debt was 1.43 billion euros, while the net debt-to-core earnings ratio was 0.35 times. These indicators show that the higher full-year operating cash flow guidance coincided with lower quarterly free cash flow, while net debt remained at the reported level. In renewables, installed capacity rose to 2.7 gigawatts at the end of the quarter from 1.7 gigawatts a year earlier, while electricity sales to customers increased to 2.5 terawatt-hours from 1.8 terawatt-hours.
Among market benchmarks, the average dated Brent price was 97 dollars per barrel in the third quarter, compared with 69.1 dollars a year earlier, while Dutch gas reached 63.4 euros per megawatt hour, up 95% year on year. Galp ended talks with Moeve on combining downstream activities without an agreement and said its strategic direction and investment thesis would remain unchanged. In its dispute with Venture Global over a liquefied natural gas contract, Galp said the arbitration tribunal ruled in its favor on part of the dispute on October 7, with compensation to be determined later. The company’s shares rose 2.42% to 22.86 dollars after the results, according to coverage published on October 26, 2026. The company had announced that it would publish its third-quarter results on October 26 before the Euronext Lisbon market opened, with an analyst call scheduled for 11:00 Lisbon and London time.