Galp shares fall 7.5% after Moeve talks collapse despite higher guidance
Key Facts
Galp shares fell 7.5% on the morning of October 26, heading for their steepest daily decline in 11 months, according to Reuters. The drop followed the Portuguese company’s announcement that its talks with Moeve had ended without an agreement on a partnership in refining, chemicals and fuel sales. The move came as Galp raised its 2026 financial guidance, backed by operating performance that it said had boosted its confidence for the rest of the year. But the failed talks captured the market’s attention, according to analysts cited by Reuters. The stock was among the worst performers in the STOXX 600 during the session.
Galp said it had been unable to reach sufficient commercial alignment to create a sustainable, value-generating partnership with Moeve. The two companies had agreed in principle in January to explore combining some of their assets through two joint ventures. One venture would have brought together Galp’s Sines refinery and Moeve’s Huelva and Algeciras refineries in a refining platform with processing capacity of about 700,000 barrels per day. Reuters reported that investors had expected an agreement in early Q4. The report cited RBC analysts as saying the absence of a deal “may raise questions about Galp’s valuation premium compared with peers.”
Galp raised its 2026 group EBITDA forecast to about 5 billion euros, from 4 billion in its previous guidance. It also raised its operating cash flow forecast to around 3.9 billion euros. The company said the update was based on strong operating performance in the first nine months, along with a review of economic expectations for the coming months. It added that this strengthened its confidence in the remainder of 2026 and supported another increase in its annual guidance. The company also pointed to continued commodity price volatility, geopolitical risks and energy supply chain disruptions.
In the third quarter, adjusted EBITDA from upstream activities was 708 million euros, supported by higher production in Brazil and the continued operational ramp-up of the Bacalhau unit, as well as higher realized oil and gas prices. Oil and gas production in Brazil reached a record 131,000 barrels per day during the quarter. Adjusted EBITDA from industrial and midstream activities was 639 million euros, benefiting from higher oil product margins in refining. Commercial activities recorded adjusted EBITDA of 147 million euros, up 24% year over year. The results show contributions from multiple segments to the performance underpinning the company’s updated guidance.
Adjusted operating cash flow was 1.223 billion euros in the third quarter, while free cash flow reached 271 million euros. Net debt remained broadly stable at 1.4 billion euros at quarter-end. Over the first nine months, 91% of Galp’s EBITDA came from international markets, and the contribution from exports rose to 640 million euros, more than tripling. Co-CEO Maria João Carioca said the indicators reflected structural growth and transformation choices implemented with discipline over decades, while acknowledging that some activities were benefiting from current market conditions. The company allocated 960 million euros of its investment in the first nine months to decarbonization projects, including wind assets in Spain and green hydrogen and advanced biofuel projects in Portugal.
Reuters linked the failed talks to energy market volatility stemming from the Iran war, and quoted a source familiar with the matter as saying the volatility had made refinery valuations difficult and there was no intention to resume talks in the medium term. Moeve’s chief executive said the company’s strategy to transition to low-carbon businesses stood on its own, and that a potential combination with Galp had been an opportunity to accelerate value creation, not a condition for pursuing it. On upcoming operational steps, Galp said the Bacalhau field in Brazil continued to ramp up, with 4 producing wells connected. The company aims to start drilling the first well in its next exploration and appraisal campaign in the Mopane area of Namibia soon. Third-quarter results were published on October 26 before the Euronext Lisbon market opened, and the company scheduled its analyst call for the same day at 11:00 Lisbon and London time.