Good afternoon, ladies and gentlemen. Welcome to Galp's first quarter 2023 results presentation. I will now pass the floor to Otelo Ruivo, Head of Investor Relations. Hello, everyone, welcome to the results analyst Q&A session to review Galp's first quarter 2023 results. Early this morning, the team released and distributed to you all these materials, all the materials related with the results, together with a short video where Filipe covered the key highlights for the quarter. This session will follow the format used over our last earnings publications, going straight to Q&A after just some initial words. Today in the room we have Filipe, our CEO, Georgios, who continues to lead renewables at the ExCo, and Rodrigo, who was just appointed to our executive team as responsible for energy management activities. We also have with us some of our leadership team members, namely Cristina, responsible for our Sines Refinery, and Daniel, our upstream country manager in Brazil. We are all happy to take your questions. The usual disclaimer. We would like to remind you that we may make forward-looking statements that refer to our estimates, and actual results may differ due to a number of different factors as per indicated in the cautionary statement included in our materials, which we advise you to read. Filipe, do you want to say a few words before we start the Q&A? Thank you, Otelo. Hi, everyone. I'd just like to say first how thrilled I am with this new team and how well-aligned we are with our growth and decarbonization strategy. Strategy-wise, you know, we are making progress according to plan. The upstream projects, the ramping up of our renewable power generation capacity and transforming our commercial footprint. The industrial activities, i.e., refining, successfully captured the stronger international refining environment, even with we had very significant planned maintenance during the quarter. Midstream's contribution returned to positive contribution in Q1, as expected. As a firm, you'll see that OCF is a lot less concentrated in upstream. We now start to see a healthier balance of OCF distribution across the business units, be it renewables, midstream, refining, and these typically command higher multiples. CapEx in the quarter was pretty light, as first quarters often are. Cash taxes were very high. Both CapEx and cash taxes that are facing issues here, you should not extrapolate this for the rest of the year. The full year guidance remains unchanged from what we have guided you to only two months ago. Okay. With that, happy to take your questions. Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To ensure everyone has the opportunity to ask a question today, please limit yourselves to just two questions. Please stand by while we compile the Q&A roster. Now we will take our first question. The first question comes from the line of Biraj Borkhataria from RBC. Please go ahead. Hi there. Thanks for taking my questions. The first one's on your gas strategy. Obviously you've had good momentum there. You had signed a sales and purchase agreement from Venture Global for Calcasieu in the U.S. You know, it's 1 million tons per annum, so it's quite material. Can you just confirm whether you started lifting as part of that contract or whether that's in the 2023 guidance? Just some color around that would be helpful. Secondly, on refining, obviously we've seen refining margins fall considerably from the highs. Can you just update us on whether you have any hedges in place for 2023/2024? Thank you. Hi, Biraj. I'll take the first one. Rodrigo will cover the gas. On refining, we have very limited hedges. I think it's 7% or 8% of our volumes. Ironically, they're well in the money. They will be maturing during the course of this year. Not expecting any... Certainly not negative impacts. It should be positive, but not significant. Rodrigo? Thank you, Filipe, and thank you, Biraj, for the question. Regarding the Venture Global contract, the plant is still under commissioning. We do expect the plant to reach commercial operation date by the end of the year. It's too early to give any more specifics. We will update you accordingly. Thank you. Thank you. We will now take the next question. The next question comes from the line of Oswald Clint from Bernstein. Please go ahead. Yes, good afternoon. Thank you very much. Filipe, in the context of the decarbonization strategy, I wanted to talk about Mozambique. There's obviously a lot more positive commentary here, getting back to work potentially, and just to get at your thoughts on how you feel about that asset in the portfolio at this stage, and obviously the pretty large capital call that will be coming across the medium term if you move ahead there. That's the first one. Secondly, you know, good to see the strong liquids production in Brazil this quarter. I think in your video you mentioned it's supported by better than guidance efficiency. Be great if you could expand on that and what specifically is driving that better outcome. Thank you. Hi, Oswald Clint. I'll cover the first one, then Daniel will cover the second one. You know how excited we are about Mozambique. I mean, the resource in place, the competitiveness of the molecules, the location of Mozambique. It ticks all the boxes, the quality of the molecules themselves. We've had obviously force majeure for some time. We at Galp have been advocating with the consortium for quite some time, what the concept and the development concept should be on the onshore projects. Mega train versus multiple smaller modular trains. We have used the time of the force majeure to work with the consortium, and as you may have seen, there's a request for interest out there in the market for up to 18 million tons of much, much smaller trains, which we think are better suited for Mozambique. This is what the consortium is working on. We're still pretty far away from significant CapEx disbursements. We're working on pre-FEED and FEED will come next, and then FID sometime, you know, I'll say next year or the year after. For now, Galp is in de-risking mode. We want to advance the project as much as possible so that we have a project that is very viable, better than what it was before, bankable, and it is fully de-risked. We will then assess our options at that stage. Daniel? Thank you, Filipe. Thank you, Oswald. Indeed, a very good start of the year in Brazil. We, in this first quarter, had less maintenance activities than we usually have over a regular year. Also we have proven the quality that the reservoir remains intact, and this is also positive news for us, going forward. Going forward, we have give guidance of above 110,000 barrels of oil equivalent per day for 2023 and 2024. We remain confident on that guidance. Thank you. Thank you very much. Thank you. We will now go to our next question. Your next question comes from the line of Sasikanth Chilukuru from Morgan Stanley. Please go ahead. Hi, thanks for taking my questions. I had two, please. The first one was regarding any potential acquisitions in the renewable space. A few weeks back, there was an article that highlighted Galp was looking to buy some wind assets for around EUR 650 million. I was just wondering if you could comment on that, and more specifically on your approach towards inorganic expansion in the renewable space. What criteria or parameters would you look for if you were to pursue that route? Also, if an acquisition of the magnitude of EUR 650 million were to be performed, would it require you to sell more assets in order to meet your EUR 1 billion per annum CapEx guidance to in order to maintain that? The second one, was most, was a clarification on windfall taxes. So far it appears that you have taken around EUR 100 million charges of windfall taxes over the last couple of quarters. I was just wondering if those represented the overall windfall taxes for 2022. Also if you could clarify on the cash payment schedule, for these charges, and if we had any guidance for 2023 windfall taxes. Thanks. Thank you, Sasi. We don't really comment on M&A and speculation. The guidance we have given is 4 GW installed by 2025, be it organic or inorganic. The guidance we have given is EUR 1 billion net CapEx over the period, the 2023, 2025 period. It's a net amount, so we can play with nominator and denominator, whether we buy more and sell more or we, you know, don't buy anything else and we don't sell anything else. It is within the EUR 1 billion overall guidance that we will remain disciplined on. On windfall taxation, first a comment that you will have seen that we have put this very, very visible under the RCA numbers. I guess some of the pressure on our stock price today is the taxation line on the P&L. This does not necessarily mean cash disbursement. It is a provision. If you look back starting in 2014, we had something called the Portuguese Extraordinary Tax on the Energy Sector, which we have always challenged. We're now in 2023, we still haven't disbursed. We're starting to get positive recognition of our claims. Hence, when we thought in 2014 it was extraordinary. Now year after year, we as a management team, we kept asking, "Is this really a special item, or should we put this as a recurring item?" We're glad to see that, it's, you know, deemed or it's becoming deemed as really extraordinary. Windfall tax is a European law. We're still looking at our options, but we want to make sure it is in the P&L. This does not mean, there is necessarily a full disbursement in 2023. Very likely there'll be a partial disbursement in 2023. Thank you. Thank you very much. Thank you. We will now go to our next question. Your next question comes from the line of Jason Kenney, Santander. Please go ahead. Well, thanks for the opportunity. Maybe just following up on the taxation question. What kind of risk do you place on an extension of the Brazil levy beyond June 2023? I think you still got EUR 36 million to take in the second quarter for the current amount. Have you had a think about how any extension of that might impact Galp? Secondly, I'm just trying to think simply about the renewables business, and that you're indicating an EBITDA EUR 180 million for 1.6 gigawatts installed. If I were to double that by 2025, is it as simple as doubling the EBITDA contribution? Is that the way I should be thinking about this? Thanks very much. Thank you, Jason. The Minister of Finance of Brazil has made it public that this 9% levy on exports will end at its envisaged term of end of June. What you see in our Q1 numbers is March only, which was month number one of this four-month tax. We're highly confident, and since our direct discussions with the Brazilian government, that it will indeed end in June. This levy is tax-deductible in Brazil, and we have 70% of Brazil only. The impact to Galp, however unfortunate this taxation is for credibility issues of Brazil, which was the real damage of this tax, is credibility in a country that needs to attract so much capital to develop its resources. That for us was more important and also for the capital market credibility of Brazil, more than the financial impact. On renewables, we are 100% merchant exposed. The answer is depends on merchant power prices and solar power prices in particular. In Q1, you will have seen that we have a very good realization price of our solar electrons because we had partially hedged some of the volumes, short-term hedges. Energy management and Rodrigo will continue to try to lock in opportunistically, some of these electrons in the market. No, it is not, you know, double megawatts, double EBITDA. It's highly dependent on power prices. Thank you. Thanks very much. Thank you. We will now go to your next question. Your next question comes from a line of Alastair Syme from Citi. Please go ahead. Hello. Thanks for the opportunity. I wanted to ask about renewables as well. I mean, the European Union's made a lot of comments and bluster about sort of reducing planning constraints. I'm just sort of interested to see if that has translated into anything on the ground in terms of, you know, approvals. Secondly, you know, obviously the refining margin environment is a bit tougher. You know, gas prices have come down as well. Maybe I just, you know, how's your refining system responding to the sort of, the signals you're seeing out there today on pricing? Thank you. Hi, Alastair. I'll take refining, and I'll ask Georgios to take the renewables one. Yeah. We were at about 14 per barrel in Q1. Earlier this week, we had a big dip. It's at around 6 as we speak. Very volatile. Hard to, hard to see. We do see significant Russian molecules in the market, directly or indirectly, either coming from countries that have no sanctions, but find a way to bring the molecules into our market. It's very hard to have a view on longer term refining margins. Now, if you look at the futures curve, it looks much stronger than what it is today. The kit is operating exceptionally well. We had a very, very good turnaround at the hydrocracker. It is firing on all pistons ahead of the expected turnaround of the FCC and the distillation unit, in Q4 this year. Yorgos? Thanks, Alastair. We have seen improvement in Portugal, not so much in Spain. The backlog in Spain in particular remains huge. There's a lot of inertia in the authorization regimes. There are regional governments and the central government. As I was saying, there's a lot of gigawatts that these authorities have to take care. We haven't yet seen on the ground any improvement in Spain. We expect to see it, but it will take its toll. It will take its time. I wouldn't say before a year or so. Thanks. Great. Thank you. Thank you. We will now go to our next question. Your next question comes from the line of Henri Patricot at UBS. Please go ahead. Yes, everyone. Thank you for the update. I have two questions, please. The first one, just follow up on the other question on refining. You, you mentioned, you know, what you're seeing on the supply side. I was hoping you could share some comments of what you're seeing on the demand side, in the new markets, if you're still seeing robust demand or maybe a bit of softness at the moment, which could partly explain the weaker refining margins. Secondly, just on the upstream, I wanted to ask about cost inflation. We're seeing unit costs a little bit lower quarter-on-quarter. What should we expect for the rest of the year? Thank you. Thank you, Henri. On the demand side, we see outside of seasonal effect, of course, we see B2C relatively flat, but B2B quite strong. A lot of this is driven by aviation, mostly aviation. A bit of marine, but aviation is really what is moving the needle from a volume point of view. The margins are not anywhere close. I mean, you know, aviation margins are very, very low, so it's good for volumes. It doesn't really make a huge difference into the bottom line. On the upstream inflation, yes, we're seeing significant inflation in some areas. It is not having any material impact to Galp. That is because our biggest project is Bacalhau, has been, you know, sanctioned a while ago. The vast majority of the CapEx is locked in. Thank you. Thank you. We will now take our next question. Your next question comes from the line of Raphaël Dubois, Société Générale. Please go ahead. Hello. Thank you for taking my questions. The first one is about the net CapEx. I was wondering if maybe you could give us a guidance range that will help us to better understand what is at stake for the next six or seven months. We are almost half year. I guess you should have a better feel for how much money you're gonna spend after having spent only EUR 109 million net CapEx in Q1. It seems pretty obvious you will not spend anywhere close to EUR 1 billion. I was wondering how much is that dependent on FID-ing the industrial projects in Sines, the HVO project and the hydrogen project? It would be great if you could update us on these projects? The second question is about the oil price realization in Brazil. It would seem that it has come off a little bit, and I was wondering if you could give us some guidance for the rest of the year. Thank you. Thank you, Raphael. Again, I would not extrapolate Q1. Q1 is a very low CapEx realization quarter. Actually, across the industry, I guess people scramble in Q4 and send the invoices quickly before year-end, then they go on holidays during Q1. Q1 is net of the down payment for the Angolan divestments. It's a very, very low number. The guidance is EUR 1 billion. It's actually our guidance is EUR 3 billion of net CapEx over the three years. We're not even saying it's EUR 1 billion per year. You should look across the cycle between investments and divestments, about, you know, on average net CapEx of EUR 1 billion. That's the only guidance we're giving at this stage. For the Sines project, we are ready to go. We have the people, we have the suppliers, we have pretty much now the project all lined up. As you know, these are important projects, hundreds of millions EUR per project that would be at stake. There are regulation issues which are being ironed out, and also the tax regimes in Portugal, which we need to clarify with the local authorities. Galp is being taxed at 64% in Portugal. Projects don't fly at anywhere close to this taxation, and as shareholders, you know what I mean. We need to have an environment that is conducive to take such big decisions. On Brazil realizations, you have a couple of issues that worked against us. One is a lot of Russian molecules finding their way into China. You know, Russia has lost some of their Western clients, so a lot of volumes are going east. We are competing. We have a big competitor in China, delivered in China, big competitor. The premiums we used to have reduced. We have much higher logistics costs. Now, as you know, the sanctions have rerouted a lot of these tanking capacity. Routes are much longer. Supply and demand for tankage capacity has gone up, so prices have gone up. We're also excluding the Angolan barrels from our numbers, and Angola typically commanded a higher premium to Brent than Brazil. The mix now is entirely Brazil without the benefit of the Angolan volumes. Thank you. Thank you. Thank you. We will now go to our next question. Your next question comes to the line of Giacomo Romeo, Jefferies. Please go ahead. Yes, thank you for taking my questions too. For me, the first one is on the cash tax payments you made in Brazil this quarter that affected your OCF. Just wondering how we should think about that, the reversal through the year of that. The second question is on Namibia. Have been news that you have secured a rig there. I just wanted to get an update on sort of what's the timing and whether you are still happy to go with your 80% interest, yeah? Thank you, Giacomo. I think there's a number close to EUR 200 million that is front-loaded in our Q1 numbers related to income taxes in Brazil. There's no reversal. There's just much, much lower payments for the next three quarters. It's a front-loading. Again, no change in guidance on OCF. OCF post-tax, of course, no change in guidance from what we provided you back in February. Yes, Namibia, it's in the news this morning. We have secured the rig. The plan is to drill in Q4. Yes, we still have 80%, eight-zero, of this block. A bit like Mozambique. You know, we want, we need to de-risk this project much, much further, and we will take a decision at some stage. It is clear that we will not be the owner of 80% of this block if it is a successful discovery, because the magnitude looks very, very significant, and we need to share risk and make sure that CapEx guidance is met. Thank you. Thank you. We will now go to our next question. Your next question comes from the line of Matt Lofting, JPMorgan. Please go ahead. Thanks for taking the questions. Two if I could, please. First, just coming back on Brazil tax. I guess it was halfway through the four-month duration on the temporary export duty. Could you share the nature of engagement Galp and the industry has been undertaking with the Brazil state through the last few weeks, and any risk Galp sees that the export tax indeed proves temporary, but is ultimately replaced by an alternate or watered-down additional tax take? Secondly, on the midstream gas and power business, good to see the inflection in profitability in Q1. Could you share how much of that is gas trading related and the extent to which that performance is seen as repeatable or specific to a trading conducive Q1? Thanks. Thank you, Matt, for the question. This is, Daniel here from Brazil, team. We have been very active since day one, together with other partners of the industry, other IOCs, and also via IBP, where we are also a member. On the first moment that we heard about this, temporary 9.2% tax levy on crude oil exports, we have expressed. That this would put at risk the credibility of Brazil as an investment geography. Since then, as Filipe mentioned, we have seen a positive follow-up on this lately with the Brazil Finance Minister, Fernando Haddad, making public that this would not be pursued longer than the end of June, which is the validity of this temporary tax. Thank you, Matt. This is Rodrigo Vilanova here. Regarding the gas trading business within midstream, the results were circa EUR 90 million, which is around two-thirds of the total industrial midstream number. Thank you. Thank you. We will now go to your next question. The next question comes from the line of Ignacio Doménech from JB Capital Markets. Please go ahead. Yes, good afternoon. Thank you for taking my questions. The first question is on upstream. Maybe if you could elaborate more on the increasing production costs during the quarter, mainly on the higher maintenance level you were describing. The second question, still on upstream, if you could give us some visibility on where production sits during the month of April, and also on the maintenance schedule in Brazil, how it is looking like in the coming months. Thank you. Ignacio, can you speak despacito, please? Thank you. Yes. My first question on upstream, if you could elaborate on the increase in production cost during the quarter. My second question, still up in upstream, if you could provide us some visibility on production during the month of April and also on the maintenance schedule in Brazil over the next month. Thank you. Ignacio, this is Daniel again. Thank you for the question. On production costs, we are about USD 3 per barrel, which is a magnificent unit cost for production. We have incentives on performance in our fleet, so you will see sometimes positive news in increased performance and potentially some increased costs associated with rewards embedded in those incentives. Regarding April and the maintenance in Q2, the activity that we are performing in this second quarter that is already ongoing, it's aligned with our overall guidance, and we prefer not to make any specific statements in the quarter that is ongoing. As I mentioned before, we had a very good start of the year and we are very confident that we'll meet the guidance for 2023, 2024. Of course, in 2025 we have that fantastic date, which will be the entry of Bacalhau, which will generate up to 40,000 barrels of oil equivalent to Galp, which will be a fantastic milestone to us in a low carbon, low break-even project. Thank you. Thank you. Thank you. We will now go to the next question. Your next question comes from the line of Pedro Alves, CaixaBank BPI. Please go ahead. Hi. Thank you for taking my questions, two if I may. The first one, in midstream, there is clearly a good sequential recovery here. I remember that you mentioned in the past call that you were expecting midstream maybe to be over EUR 250 million. Just wanted to understand if you feel you are on track to reach this level or eventually surpass, and if you think this is something sustainable. Because on one hand you are benefiting from eventually volatile gas prices that may be inflating your trading results. On the other hand, you'll have more flexibility and source gas to play with. Secondly, related to the constitutional court, partial decision to extraordinary taxes on the energy sector in Portugal, if you think this could be somehow retroactive, because you still have relevant amount of provisions related to this. Thank you very much. One for you, Rodrigo. Hi, Pedro, this is Rodrigo. Thank you for the question and for the statement. At this stage, we're not changing the guidance just yet for the year. It's too early for that. Indeed, our portfolio this year is much more resilient than in the previous years. Despite the recurring sourcing restrictions and the low price environment, we are very confident that we will keep a strong positive result throughout the year. No changes in guidance at this stage. Thank you. Thank you. One sec, operator. One second. I I have a question from Pedro. Question number two was about sales taxation. The decision of the court is actually retroactive. It's retroactive to 2018. It stops the continuity from 2023 onwards, and it goes back to 2018. In our balance sheet, we have up to half a billion of provisions related to this. Over time, as these processes evolve, yes, these would be unwound. Thank you. Thank you. Thank you. We will now take our final question. The final question comes from the line of Alessandro Pozzi, Mediobanca. Please go ahead. Thank you for taking my questions. The first one is on commercial. You had a fairly strong start to the year there as well, and I was wondering if you can maybe give us some color on how you expect the rest of the year to play out. Also, I was just going back to the medium to long-term guidance, and I think the latest one was pointing to a EUR 450 million EBITDA in 2025, which seems to be a fairly large step up from the EUR 300 million of 2023. I was wondering whether that EUR 450 million is still valid? On Mozambique, just to clarify, I mean, we've seen a potential news flow of a second floating LNG, and I was wondering whether that might fall into the CapEx plan that you have. Thank you. Thank you, Alessandro. On commercial, the guidance for this year is EUR 300 million at the EBITDA level. It looks like something that is achievable comfortably if things can be extrapolated. Volumes are picking up in B2B, B2C is relatively flat. Longer term, today is not the day to give longer term guidance on commercial. When we did give that guidance at the CMD, well, first, the world was a different one. Two, bear in mind that we have within commercial two loss-making businesses which in our plan will turn around. They are turning around. Be it EV charging, which is, you know, fast-paced. You need to occupy the real estate quickly, so you need to launch those business very quickly. It's going to be, you know, cash flow negative and EBITDA, even EBITDA negative because you're building a very long-term footprint in our key geographies. Same with rooftop solar. We're rolling out that business very, very quickly. When you swing from negative to positive, you know, it has a material impact on the commercial business, given that it's a, you know, run rate EUR 300 million, you know. If two businesses start going from negative to positive, it makes a big difference. I'll also highlight the phenomenal work the teams are doing on convenience. If you drive around Iberia and stop at a Galp station, you'll see what a wonderful job we're doing in the offering we're giving to our clients and the convenience they can. I'm sure you will stop by after you hear this. Yes, it's a fast growth business and the margins are okay. Second FLNG has never been in our business plan. It's not in our budget. It is a discussion that is ongoing, but too early to tell. We're very focused on the key onshore development, and we really like the small train concept that ExxonMobil is proposing. Thank you. All right. Thank you very much. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.