Portugal's Galp Energia on Monday reported a 13% slump in adjusted first-quarter net profit, hit by a decline in oil production owing to constraints caused by the COVID-19 pandemic and slower refining activity. Galp suspended output at its largest refinery in Sines and its smallest, Matosinhos, in April 2020. It resumed production at both locations in June but halted Matosinhos again in early October and has yet to resume activity there.
Galp's adjusted net profit fell to 26 million euros ($31.49 million), from 29 million a year earlier, while earnings before interest, tax, depreciation and amortization (EBITDA) rose 6% to 499 million euros, the company said.
Galp's share of oil and gas production from the projects it has a stake in fell 5% in the quarter to 125,200 barrels of oil equivalent per day, compared with 131,400 barrels a year earlier. However, output was up 2% from the previous three months.
"Production was impacted by operational constraints, namely due to the pandemic circumstances," Galp said, adding that the crisis continued to restrict offshore activities and that production fell 3% in Brazil and 20% in Angola.
The effect of the output decline was partly offset by an increase of oil prices and a recovery in refining margins.
Optimism over vaccination programs and cuts in oil output by the OPEC+ group of producers helped the price of Brent crude to $61.10 a barrel in the first three months of 2021, against $50.10 a year earlier when coronavirus lockdowns hit global demand.
The company's refining margin rose to $2 a barrel in the first quarter, from $1.90 in the same period last year and $1.60 in the previous three months.
Galp, the activities of which range from upstream oil and gas production to refining and renewable energy, said its capital expenditure increased 23% to 178 million euros.
Net profit and EBITDA were adjusted to reflect changes in the company's crude stock.
($1 = 0.8257 euros)
(Reporting by Sergio Goncalves Editing by Inti Landauro and David Goodman)