UPDATE 1-Galp net profit falls 38 pct on refining margin, misses forecasts

Tue Apr 29, 2014 2:47am EDT

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(Adds outlook, details)

* Net profit down at 47 mln euros vs f'cast 57 mln

* EBITDA up 5 pct at 265 mln vs f'cast 270 mln

* Refinery maintenance impact to be felt until early May

* Slow recovery in Iberian market

* Demand in Portugal still down

LISBON, April 29 (Reuters) - Portugal's Galp Energia posted a steeper-than-expected 38 percent fall in first-quarter adjusted net profit, mainly due to a drop in its refining margins and refinery maintenance, even though oil output rose.

Galp netted 47 million euros ($65.1 million), while core earnings or EBITDA rose about 5 percent to 265 million euros. The results are adjusted to reflect changes in the company's stocks of crude.

Analysts polled by Reuters had on average forecast an adjusted net profit of 57 million euros and EBITDA of 270 million.

The company's refining margin fell 39 percent from a year ago to $1.1 per barrel in the first quarter following international trends, Galp said, expecting some improvements in benchmark margins in the second quarter.

Galp's natural gas output, which comes mostly from Brazil and Angola, jumped over 19 percent in the quarter from a year earlier, while its oil refining volume fell 23 percent due to scheduled maintenance at its Sines refinery.

The volume of crude oil processed will continue to be impacted by the Sines outage until the beginning of May, Galp said. It expected sales to clients to increase thanks to a projected slight recovery in the Iberian market.

Galp said its working interest oil output should drop to around 26,000 bpd in the second quarter from 28,100 in the first three months of the year, but that would exceed the 23,500 bpd it produced a year ago.

Galp also said that although the market for oil products in Portugal and Spain expanded by about 1 percent from a year earlier in the quarter, it was thanks to higher demand for jet and bunker fuel in Spain, while "demand for road fuels continued to be impacted by the adverse economic environment".

Portugal's economy began to recover last year and is expected to post its first full year of growth in 2014, yet Galp said the Portuguese market for fuels still contracted by 3 percent in the first quarter. ($1 = 0.7223 euros) (Reporting By Andrei Khalip; Editing by David Holmes)

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