UPDATE 1-Portugal's Galp profit slumps on weak refining margin
* Net profit 57 mln euros, forecast was 72 mln
* EBITDA up 1 pct at 312 mln euros, above 302 mln forecast
* Refining margin slumps 62 pct (Adds margin, costs, sales outlook)
LISBON, Oct 28 (Reuters) - Portuguese energy company Galp Energia posted a larger than expected 42 percent drop in quarterly net profit on Monday, mainly due to a weaker refining margin and higher production costs, even as its output grew.
Galp said the fuel market in Portugal and neighbouring Spain contracted in the third quarter despite signs of recovery from a long recession, and forecast a drop in fourth-quarter sales. Still, it noted that the pace of the market's contraction was slowing.
Galp's net profit, adjusted to reflect changes in the company's stocks of crude, totalled 57 million euros ($78.6 million) in the third quarter of the year, it said in a statement.
Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) edged up about 1 percent to 312 million euros.
Analysts polled by Reuters had forecast, on average, an adjusted net profit of 72 million euros and EBITDA of 302 million euros.
The refining margin slumped 62 percent to $1.7 per barrel, which the company said was in line with an industry trend, as operating costs jumped 19 percent.
The company had announced earlier that its crude output jumped 12.5 percent in the third quarter from a year earlier and the amount of oil it processed rose almost 5 percent. Sales of refined products grew about 3 percent.
Galp, which is mainly a refiner, has broken into oil production over the past few years, thanks to a large extent to a 10 percent interest in Brazil's giant Lula/Tupi field. It is also a partner in other prolific Brazilian projects and operates in Angola and Mozambique. ($1 = 0.7250 euros) (Reporting By Andrei Khalip; editing by Tom Pfeiffer)
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