The Portuguese energy company lifted its core profit guidance to about €5 billion on stronger refining margins and a higher oil price assumption. Talks to combine its refining business with Moeve ended without agreement the same morning.
Galp Energia reported a sharp jump in quarterly profit on Monday and raised its outlook for the year. About half an hour after the open in Lisbon, its shares were down almost 9%.
The company lifted its 2026 guidance for core earnings, measured as replacement-cost-adjusted Ebitda, to about €5 billion from about €4 billion. It raised its operating cash flow forecast to about €3.9 billion from about €3 billion.
In a separate statement the same morning, Galp said talks with Moeve on a combination of their downstream businesses had ended. "No agreement has been reached," it said.
At 8:33 a.m. in Lisbon, Galp shares were at €20.94, down 8.8% from Friday's close of €22.96.
A quarter made by refining
Third-quarter core Ebitda rose 67% from a year earlier, to €1.522 billion. Adjusted net income rose 68% to €682 million.
The driver was refining. Galp's refining margin was $34.0 per barrel of oil equivalent, against $9.5 a year earlier and $16.8 in the second quarter. Industrial and midstream Ebitda was €639 million, compared with €315 million a year ago. Upstream Ebitda rose 53% to €708 million.
What the headline doesn't show
The reported figures tell a weaker story. Net income under international accounting standards fell 24% to €201 million, pulled down by €453 million of special items, mostly mark-to-market losses on derivatives that have not yet settled. Refining hedges cost €172 million in the quarter, and €261 million over nine months.
Free cash flow halved to €271 million, as net capital spending rose to €614 million, including €420 million for an operating wind portfolio in Iberia, and working capital absorbed cash. Galp bought back only €4 million of shares in the quarter. Net debt ended at €1.43 billion, or 0.35 times trailing core Ebitda.
The guidance raise also leans on prices. Galp lifted its Brent assumption for the year to $90 a barrel from $80, and its realized refining margin assumption to about $25 per barrel from $13. That makes a large part of the upgrade a function of the oil and fuel market rather than of higher volumes.
The deal that didn't happen
Galp and Moeve, which is owned by Mubadala Investment Company and the Carlyle Group, signed a nonbinding agreement in January. The venture would have combined Galp's Sines refinery with Moeve's Huelva and Algeciras plants, with about 700,000 barrels a day of crude capacity, Moeve in control and Galp holding more than 20%.
Chairwoman Paula Amorim said the parties "were unable to achieve the necessary commercial alignment." Galp said the outcome "does not impact Galp's existing operations" and that its "strategic direction and investment proposition remain unchanged."
Why the stock fell
Several things arrived at once. Brent was down about 2% on Monday morning, and European energy shares were weighing on the wider market. Investors also lost a consolidation path in European refining and saw a large gap between adjusted and reported profit. No single disclosure can be identified as the cause.
Two readings
One reading is that the market is looking through the quarter. Margins of $34 a barrel are unusual, the guidance assumes they stay elevated, and the end of the Moeve talks removes a source of scale.
The other is that the selloff underprices what Galp has shown it can earn. Core profit is up by two-thirds, leverage is low, and the company says it is "unwavering in its capital discipline," leaving room for higher returns to shareholders if margins hold.
What to watch
The analyst call at 11 a.m. Lisbon time for comments on downstream strategy, hedging and buybacks, the path of oil and diesel margins, and third-quarter reports from Exxon Mobil, Chevron, Shell, TotalEnergies and BP this week.