Galp Energia posted a profit of €608 million in the first nine months of the year, up 86% year-on-year. All business segments showed "strong performance", but rising oil prices and the refining business help explain the results.

Through September, refining margins rose to $12.4 per barrel, which compares with $2.8 per barrel a year ago.

According to the accounts presented to the market by the company still led by Andy Brown, earnings before interest, taxes, depreciation and amortization (Ebitda) rose 731TP2Q to €2,897 million in the first nine months of the year. Already in the third quarter Ebitda was €784 million, which compares with €607 million a year earlier and €1,244 million in the second quarter.

But these results fell short of analysts' expectations and the markets punished the company, with shares falling more than 5% right at the opening of the market. Looking by quarter, profit from July to September was €187 million, down from €265 million in the previous three months. This slowdown of 29% is explained by an inventory effect, but also by the introduction of the Iberian mechanism that helps contain gas prices.

In the first nine months, Galp's net debt amounted to 2.09 billion euros, a year-on-year increase of 3%. But in the third quarter it even managed to reduce net debt, compared to the previous three months (€2,185 million). "Excluding inorganic movements related to the Titan Solar business, net debt would have been reduced by about €390 million," the company explains in a statement. The purchase of a position in this project had a cost of 140 million. Also contributing to this amount of debt were the 213 million euros paid out in dividends to shareholders and 77 million euros in the share buyback program carried out in May.

Contrary to what happened in the second quarter, all business areas now have a positive contribution, except for the new business area that continues to make a loss, which worsened to 17 million in the third quarter. In the second quarter the renewable business area had registered a loss of four million euros, but in the following three months it managed to make a profit of 38 million.

The commercial business (which includes the sale of fuel at the pumps) posted EBITDA of €256 million in the first nine months, a year-on-year increase of 12%. On a quarterly basis, the year-on-year increase was 18% to 103 million euros. It should be emphasized that this part of the business has been rising every quarter. Galp explains this improvement with the recovery of aviation and shipping in the B2B segment. But gas and electricity sales were "impacted by a reduction in industrial activity.

In the report to the market it is possible to see that the old refinery in Matosinhos continues to weigh negatively on the accounts, since 88 million euros were recorded in provisions to support the transformation of the space.

For Goldman Sachs, the risks the company faces lie in fluctuations in oil and gas prices, but also in refining margins, costs or capital expenditures in future major developments. In addition, unanticipated fluctuations in production growth from startups and development projects currently in post-startup phase may also be a risk, the investment bank says in a note where it stresses that its recommendation for Galp shares is "neutral" and the target price for the stock for the next 12 months is €15 per share.