Record energy prices and significant profits generated in the oil and gas sector could reward Galp shareholders around 900 million euros for the company’s results this year. This is the estimate presented to investors regarding the results of the third quarter of this year and represents an increase of more than 50% compared to the distribution of profits made by shareholders during this year and based on the results of 2021.
The value was announced before the diploma that applies in Portugal the extraordinary European contribution on unexpected profits was known and is based on the policy of distributing up to a third of the means released by the operation (operating cash-flow). But the company admits that this indicator may be lower due to the extraordinary contribution on extraordinary profits that it will collect in 2022 and 2023.
Most of the profits to be distributed among shareholders cannot come from dividends, which are the traditional way of remunerating the holders of company shares. Galp foresees a 4% increase in the dividend to be distributed, but the big leap will come hand in hand with the purchase of shares by the company itself (share repurchase???????? This program started operating this year with an investment of 150 million euros made by Galp in favor of its shareholders, which will be substantially reinforced next year to a level close to 500 million euros, according to the same documentation.
This is the result of the shareholder remuneration policy that promises to distribute up to a third of the operating cash flow, which this year should be set at 2,800 million euros. The growth in share repurchase value is indicative of increased profits achieved mainly from the appreciation of oil and gas prices (particularly oil in the case of Galp).
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Source: Observadora
