The Portuguese oil company Galp reported on Monday that during the first quarter of this year its profits have plummeted by 72%, to 29 million euros, due to the impact of the coronavirus on oil prices, which has also led to a reduction in its investments for the next two years.
The company highlights as a reason the “adverse market conditions” experienced in the first three months of the year, in a statement sent to the Portuguese Securities Market Commission (CMVM) in which it reported on its performance until March.
A period in which the fall in the price of oil has particularly impacted, which has caused Galp’s products to suffer a depreciation estimated at 278 million euros.
EBITDA (gross operating profit) also fell 5% to 469 million, mainly weighed down by the Upstream business “which, despite having increased total production of oil and natural gas by 17%, was affected due to the sharp drop in oil prices, “says the company.
Meanwhile, oil production increased to 131.4 million barrels of oil equivalent per day, 17% more than in the first quarter of 2019.
The price of a barrel of Brent was around $ 50 during the first three months of the year, $ 13 less than in the first three months of 2019.
Galp’s refining margins – the difference between the value of crude oil and the income generated by its sale in the form of petroleum products such as gasoline or diesel – decreased, for their part, by around 19%, to $ 1.9 per barrel.
In addition, its liquid debt increased by 61 million compared to December, to add 1,496 million.
A blow that leads the company to rethink its investments and operating costs for this and next year, which will decrease “more than 500 million per year in 2020 and 2021” warns Galp.
In the end, the liquid investment “will be between 500 and 700 million, values that may be adjusted according to the evolution of market conditions,” says the oil company.
Galp thus confirms the cut in investment announced last day 8, when it already advanced results for the first quarter in terms of commercial activity, with sales of natural gas that have fallen by 24% compared to the period January-March of the year past.
Sales of petroleum products, meanwhile, increased by 13%, “benefiting from an increase in exports.”