Galp Energia SGPS SA

Good morning, ladies and gentlemen. Welcome to GALP's second quarter 2026 results presentation. I will now pass the floor to Joao Goncalves Pereira, Head of Investor Relations.

Good morning, everyone, and welcome to GALP's second quarter 2026 Q&A session. I'm joined today by our co-CEOs, Maria Joao Carioca and João Marques da Silva, as well as the full executive team. But before passing the mic for some quick opening remarks, let me start with our usual disclaimer. During today's session, we will be making forward-looking statements that are based on our current estimates. Actual results could differ due to factors outlined in our cautionary statements within the published materials. With this, Maria Joao, would you like to say a few words?

Thank you, Joao, and good morning, everyone. During the second quarter, GAL continued to operate in what we know was a very highly volatile market environment. It is therefore rather reassuring to have a high quality asset base that allows us to capture market tailwinds, sustain our financial performance, and maintain net debt rather stable despite relevant cash outflows during the quarter. Acknowledging this continued market uncertainty, but also the strong operating performance in the first half of the year, we are updating our full yield The Board will propose a 10% increase to the 2026 dividend per share. This brings it to 70 cents. with the first advancement on this payment to take place in August. This reflects not only the strong results delivered so far in 2026, but also the board's confidence in the resilience and quality of Gallup's portfolio across the cycle. Testimony to this quality, our upstream portfolio continued to demonstrate outstanding performance. Legacy assets maintained very strong uptime levels, while the three producer wells at Bacalao are successfully delivering on the expected ramp-up path and delivering also excellent productivity results. Looking at Namibia, our strategic partnership with Total Energies should be soon completed. More importantly, we remain on track to drill a new well in the Mopan complex during the fourth quarter. Overall, we're making steady progress across all key milestones and further strengthening the visibility of GALP's rather unique upstream growth profile for the next decades. João, would you like to compliment?

Thank you, Maria Joao. Indeed, this quarter demonstrates that GALP is executing with consistency across multiple fronts. While continuing to deliver strong financial performance, we are also making disciplined strategic decisions that are strengthening the quality of our portfolio and positioning the company for long-term value creation. Earlier today, we announced the acquisition of a new wind portfolio. This is a final step in reshaping our renewables business into a stronger and higher quality platform. The 361 megawatt fully operational portfolio in Spain builds on the acquisition we announced back in April. This takes our total renewable capacity to 2.7 GW, with wind now at about 30% of the mix, and lifts our pro forma renewables EBITDA to roughly 110 million for 2026. With this acquisition, our renewable portfolio gains greater scale, a better balance across technologies, and increased resilience. It also gives us more flexibility and optionality as we evaluate Future Partnership Opportunities and Alternative Ownership Structures. In parallel, we are also making progress in downstream. Discussions with the shareholders of Moeve continue to move forward in a constructive way. All parties remain aligned on the strategic rationale and potential benefits of the transactions. By bringing our downstream activities together, we believe the combined business will be better positioned to unlock value, increase scale, strengthen its competitiveness, and reinforce their strategic position. Our focus remains unchanged, ensuring that any transaction is the right one for Gallup and its shareholders, delivering sustainable long-term value. To conclude, Gallup delivered both strong financial results and strong Thank you.

As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To ensure everyone has the opportunity to ask a question today, please limit yourself to just two questions. Thank you. We will now go to the first question. One moment, please. And your first question today comes from the line of Biraj Bakatoria from RBC. Please go ahead.

Hi, thanks for taking my questions. First one's just on the renewable portfolio. You've obviously made a move to hybridize that. So just a broad question of whether you see yourselves as owners of that portfolio longer term, because it feels like this is the sort of final step to looking to sell down as you make it more robust. And then second question is on distributions. raise the dividend but no change in the buyback today. Even if I look at your macro assumptions which look conservative, it looks like the buyback should be much higher. So I'm just wondering how you're thinking about the cadence of updating that guidance or whether you're just going to look to 2027 to top it up or that would be a 3Q event. Thank you.

Thank you. Thank you, Biraj. On your first one, I will leave the second one to Maria Joao. You know it quite well. So we've been managing actively our portfolio across upstream, downstream and now renewables. So allow me to underline the strategic rationale on doing transactions and the quality also of the acquired portfolios. For us, maintaining and diversifying the power generation is aligned with the strategy of maximizing the value of the volumes under management across the energy value chain. The recent wind acquisition just reinforces GALP portfolio, building a much more diversified and resilient portfolio with multi-technology rebalancing the risk return profile. Let me also emphasize on the energy management commercial angle. It will provide us access to a more stable generation source. It will unlock additional value in ancillary services and reduces the unitary imbalance cost for the entire portfolio. With the second wind acquisition, we have reached sufficient scale, as you say, the final step, and diversification with no further acquisition target at this point. So we are now focused, as you also say, on the best options to optimize capital structure of such position in our power portfolio. Increasing scale and diversification will enhance us to be ready to pursue the partnership structure and increase the resilience of its cash flow generation. So in summary, the recent wind transactions strengthen GALP integrated power strategic positioning and increases flexibility to evaluate the strategic partnership opportunities towards ownership, financial structures, alternatives while retaining optionality in its exposure to the long-term growth of the Iberian power market. Maria Joao?

Let me then follow up and pick up on your question on share buyback, Biraj. As Ron just signaled, we have a number of pieces moving in our portfolio. So touching upon the share buyback would actually go to a discussion on the distribution policy that we see is something that we would like to engage as we get more visibility on some of those moving parts. And of course, in particular, more visibility on what will be the final terms on WebEx. So we acknowledge that there may be potential adjustments to the policy, but for now what we wanted to do was to make sure that we could signal the merits of what we see in our portfolio right now. So continued growth ahead of us. Bacalhau is ramping up nicely. Upstream continues to perform rather well. So what we see in the dividend components, and that's why we opted for the 10% increase. So let me remind you that normally we would be increasing at 4%. This is, well, as putting forward the 10% increase, that actually raises the floor of our dividend. And with that, we believe that we're signaling trust and belief that we will be able to sustain growth throughout the cycle as we're raising this floor for our overall distributions. So overall, this is a signal on trust. It's always acknowledgement that the first half of the year was a really positive one. It does not take us to the distribution policy discussion. We believe that one is to be had once we have more visibility in particular of the Moeva deal. Thank you.

Thank you. Our next question today, comes from the line of Alejandro Vigil from Santander. Please go ahead.

Yes, hello, thank you for taking my questions. The first one is about the new guidance of 4 billion EBITDA and 3 billion operating cash flow. If you can go through these different levels to reach such a high level of operating cash flow in comparison with the EBITDA, so the high conversion of this EBITDA into cash. And the second question is about Brazil. and the Oil Export Taxes, if you can provide an update on the situation in the country and the impact in your company. Thank you.

Thank you, Alejandro. So we're updating the guidance fundamentally on the back of what is our continued good performance. So you see there that we revise our upstream guidance also in tandem. and this is bringing us fundamentally to the upper part of the interval we had guided to before. And remaining businesses, we're also seeing good indications. So we know that the context has been one of considerable volatility, but still as that volatility flows through the balance sheet and our accounts, we see continued strong operational performance, hence the revision of the overall EBITDA to 4 billion, OCF now at 3 billion. We do see that refining margin incorporated in these guidance is one that it has been probably the variable with the most volatility in recent weeks and times. So we're seeing spot prices well above what we included in our guidance. So we are guiding numbers that are, you may say, relatively conservative. So $13 per barrel of refining margin, 80 on the Brent. So all in all, what we believe we can speak to here is maybe a little bit in terms of cash taxes. There's an element that can be further incorporated into the guidance as we normally see cash taxes on upstream and we have them treated differently from taxes on downstream so the high cash result is to a large extent reflecting the fact that cash taxes on downstream will be coming into our accounts in 2027 whilst the upstream are already flowing through so that informs a lot of the relationship you see between the cash result and the EBITDA but overall Very strong operational performance. Over 25% of our revised uptick on guidance is coming from operational performance. Of course, in this context and with all the volatility, the remaining 75% of the uptick in guidance is coming indeed from the macro. On Brazil, I think that was the second part of your question. So what we're seeing in Brazil is A continued concern about how to capture with Cisco policy the current context. So we do see a continuation of the export tax. We have been seeking to optimize and make sure that our operational management of the circumstances delivers the best possible results. We have guided you for a total possible income that even though the timeline for the tax has now been revised by the Brazilian government, we still expect overall impact to be around that order of magnitude. We had initially guided for 70 million so far, for 100 million, I'm sorry. So far we are at, in our accounts, you will find a little under 20 million in cash. So you see that the impacts are actually being actively managed and overall we expect our initial estimates to remain. We do see this as something to watch attentively. We do hope that the Brazilian government will continue to understand that these are taxes that weigh down on our ability to continue future investments. We will be assessing all our options to protect value and we will of course continue to do so in close association with other operators in the country. We continue to engage with the Brazilian Oil and Gas Association as we see this as an industry topic not an account specific topic. So overall something to watch out closely. Impacts remain contained and we continue to manage this very actively. Thank you.

Thank you. Your next question today comes from the line of Joshua Stone from UBS. Please go ahead.

Yeah thanks everyone and good morning. Two questions please. Firstly I wanted a clarification on the distributions. Is it your intention that you will still return at least a third of your CFFO to shareholders? So regardless of the merger We should expect distributions more than a billion euros this year if you hit your targets. Just a clarification on that one. And then second, on the renewables side of the business, are there any synergies connected with these wind assets and integration into your retail portfolio, commercial portfolio? And if so, could you walk us through, is there any impact with the Moeve merger on that part of the transaction? Thanks.

Thanks, Josh. Let me start with the distribution questions. So as you know, our current policy is for one-third. We have the dividend components growing at a pre-announced rate. So that rate, we revised it this year from 4 to 10. So we do expect that value to be well-known already and in advance. The remainder of our distribution is only communicated upon the publication of the results. That is a number that we will be guiding on or that we'll be presenting only upon closing the result. All in all, we haven't touched on our distribution policy thus far, precisely because, as I mentioned before, we do see that with the relative size of the Moeva transaction and with everything that's moving in our portfolio, we may need to discuss our distribution policy. But for now, we find that that is and we are remaining within that overall distribution policy. Thank you.

Josh, on your second one, I'll go back to my previous comments on the energy management and commercial angles. As this portfolio will give us additional access to a stable generation source, we will be converging in terms of prices, unlocking additional value. And you know, well, in the power market, apart from the significant growth that we can see in Iberia with further potential coming for sure from AI technology, but also from increasing ancillary services sophistication. And let me state that ourselves, We are now a top-tier company in intraday trading in 2025 in Iberia. We are the number one in solar and the number two in wind. And finally, let me also emphasize the connection between gas and power, what we represent in Iberia today, and how this can make all the sense within the decisions that we've just taken. Thank you.

Thank you. Your next question comes from the line of Kate O'Sullivan from Citi. Please go ahead.

Hi. Thanks for taking my question. So just again, coming back on this morning's wind acquisition and implied valuation around 1.2 million euro per megawatt, so a bit above what you paid back in April for a slightly younger portfolio. So can you help us to understand the expected equity IRR there? I know you just talked a bit about value of creation. and follow up on that you know the average age of the assets around 20 years so how much of the value creation cases is linked to repowering rather than the cash flows from the existing assets and if you could discuss any repowering opportunity within these portfolios any level of ethics that would be associated thank you uh hi Kate um so uh

To your question, on both portfolios, we are, on both cases, below 1.2 times per megawatt. We will have, on the second portfolio, we will have no CapEx, no relevant CapEx in the short term. So this will be our short term. Our short term focus will be on the cash portfolio. Of course, we will not leave aside any repowering opportunity, but that will come further ahead on the cycle. On the high single-digit returns, that's where we are today. Thank you.

Thank you. Thank you. Your next question today comes from the line of Nasekant Chilukuru from Jefferies, please go ahead.

Hi, thanks for taking my questions. I had two, please. The first was regarding the agreement and the discussions with MoAVE. The macro conditions, especially in refining, have changed materially since your announcement back in January. I was wondering if this has changed your discussions regarding valuations or the indicative shares that you have kind of highlighted previously in any form. The second question was related to the dividends to minority shareholders to Sinopec. First half dividends are 39 million euros, very low compared to the 240 million paid last year. And this comes as cash flows from the upstream are increased or are increasing materially. Just wanted to understand why these dividends to minorities are low and how should we think about these dividends as we look into the second half and also into 2027.

Thank you, Sassi. I will take the first one. Well, the Galp Moeda transaction is a long-term value creation transaction. It will not be affected on the short term by the refining margins. All the discussions we are having are progressing well. Of course, the due diligence process is a complex one, but to your point, no interference, no discussions regarding the recent short-term refining margins. They were supportive. on both sides, but not really impacting the decision. My customer is wrong.

Hi, Sassi. Thank you for your questions. On the dividends to minority shareholders in Brazil, of course, if you look at our numbers last year, you'll see that that same line has had a higher volume to an extent we looked at Thank you. Your next question today.

from the line of Guilherme Lezai from Morgan Stanley. Please go ahead.

Hi, good morning. Thank you for taking my questions. Firstly, just going back to the shareholder remuneration discussion, could I pick your brain about ways to remunerate the shareholder from here? How do you feel about a special GIF at this point to complete the one-third of CFFO policy vis-à-vis pure buybacks on top of the normal dividends? And then secondly, could you provide us an update on gas monetization and gas trading? Perhaps an update on venture global volumes, how much of it is hedged at this point? But also in Brazil, could you talk a bit about how much of your production is currently being sold to Petrobras? How much is being sold to third parties? That would be great. Thank you.

Hello Guilherme, I'll start with the distributions and then I think Joan will pick up on the gas trading. So what I've been mentioning today on the distributions is a lot, to a large extent, the way we've been thinking about this. So we look at our distributions policy very much through the cycle and thus far the one-third distribution rule has been a steady base on which we've been able to reflect our profile. So we are clearly a growth stock, not necessarily one that goes for the dividend yield alone. So thus far, this combination of having a one-third commitment on OCF, and I'll remind you that we have a distribution index to OCF, not free cash flow, so that also helps having visibility on how it is that we're connecting our distributions to our operational performance. But on this basis, so what we see right now is we do have a number of changes coming up in terms of how our profile and our results and EBITDA generation will evolve over the coming months. Visibility on those specific terms will be critical for us to then have A sound discussion on how we see this distribution policy moving forward. But the priorities remain the same, right? So we continue to aim to have a distribution policy that is first and foremost very reflective of our performance and our equity story. We, of course, keep track of how the industry is adjusting and we aim to become and continue to be competitive in terms of overall distributions. We also expect those distributions to be sustainable in the sense that we want to have a dividend floor that is stable, that is clear to all our shareholders through the cycle, and then we use share buybacks as the adjustment factor if you'd like, whenever there is indeed a tailwind that allows us to have an additional distribution going on. So overall, we do expect our distribution policy to retain these aspects. We do see the portfolio as having continued performance to sustain a very competitive distribution policy. We will be looking into as to whether the current design of that distribution policy is the best to continue to deliver on these objectives as we see fundamental movements in the portfolio. So no fundamental changes in the goals. Willingness to adjust if moving portfolio requires a moving distribution policy, but not now, only once we have sufficient visibility. Thank you.

Thank you. Guilherme, on your second one related with the gas. So first, just to highlight, we have no changes in our edging strategy. Thank you. Your next question comes from the line of

Ignacio Domenech from JB Capital, please go ahead.

Hi, thank you for taking my questions. My first question is on the gas sourcing, if I'm not mistaken, significant volumes from Nigeria expire next year, so I was wondering what is your strategy and your ongoing conversations in terms of gas sourcing for the next year and and how we should think on this going forward. Would you rather have more exposure to spot prices, to long-term secured contracts? And my second question is regarding your strategy, given the significant changes and optimization of the portfolio. I was wondering when would you be able to update the market on your longer-term strategy? If we could expect a capital market today in 2027, I would assume this is contingent to some of the ongoing partnerships. If you could give us a timeline, that would be helpful. Thank you.

Ignacio, on your first one. So we enjoy our gas portfolio as a diversified portfolio and highly competitive. So on your point, of course, we are interested on the on the North African contracts that we have. It's true that some of them will expire soon. We are having conversations on that, but no further updates to give you. So only to reemphasize, we really enjoy our position in gas, in LNG trading, and diversification and competitiveness are key for us, and we will try to keep those as a key factor to our position in the world market. Thank you.

So let me pick up on the second part of your question. If I understood correctly, you're wondering as to whether we'll have an updated strategy and a possible capital markets day anytime soon. Matthew, we're very focused on execution, to be clear and to be honest. So we have the Mwebe transaction ongoing, we have a number of movements to our portfolio, and that is clearly taking up our attention Spencer to say and we feel that upon closure of those transactions we will in any case have a lot more visibility and a lot more grounds to have a clear communication now having said that your challenge is a fair one so we do acknowledge that an update and a consolidated holistic could enhance market understanding we are trying to make sure that we Step in and give as much transparency and as much clarity on our strategic rationale as we move through our portfolio changes. And we believe that once we gain further visibility and we are further along this execution challenge, this set of execution challenges actually that we have, then we'll be in better conditions to communicate on the overall consolidated position and what this means in terms of full visibility for our strategic rationale and portfolio changes. Thank you.

Thank you.

Thank you. Your next question today comes from the line of Michele Della Vigna from Goldman Sachs. Please go ahead.

Thank you very much. Two questions on downstream. With refining, I was wondering, could you tell us what is your current state of margins and whether you have any major turnaround in the second half? Also, the HVO plant should start up relatively soon. I was wondering if you could update on the startup timing there. And then secondly, on the Moeve joint venture, could you perhaps lay out what the remaining hurdles are to define that partnership and whether there is any early views of how much financial leverage those two entities, the marketing and the industrial one, could take on when the joint venture is fully established. Thank you.

Hi, Michel. So a couple of ones on the first one. So the spot margins clearly above $30. Just reminding that, as Maria Joao alluded, we are assuming $13 per barrel on our estimations. We have, let's call it a small, short downtime expected in September, but it's very, very, very minor. So we are keeping... Our throughputs are really high on between the 80 and 85 and that's where we stay at this point. On the HVO, H2 startups, we have construction ending by year end and COD should be met next year, early next year. On the second one, so on the holders in Nueve, well, that's the market standard. So on the retail side, we see a net debt to EBITDA between three and four times. And on industrial, the ratio goes up one time. That's where we are. At this point, complexities on the due diligence and nothing else. Thank you. Thank you.

Thank you. As a reminder, if you would like to ask a question, please press star 1 1 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. Thank you. We will now take the next question. and the next question today comes from the line of Paul Redman from BNP Paribas. Please go ahead.

Hi guys and thank you very much for your time. My first question was just on CapEx. You guided to net CapEx 25 to 26, I think it was of 0.8 billion a year. If my numbers are right, 2025 was 100 million, 1H has been 800 million and then you've got the deal to complete which would be another 400 million. When I add all those up, I've not got much breathing room for the next couple of quarters on organic capex. Can you just talk me through that and whether we should be expecting any divestment proceeds to come in? And then my second question is, just to be really clear on the distribution program, There won't be any change to the 250 million euro buybacks you're doing in 2026, the actual cash you're spending. The change will be for 2026 cash when you guide to a one third of operating cash flow buyback for 2026 cash flow.

Hey, Paul. So let me start with the last one because I think it's the easier one. No, we're not going to be touching upon the $250 million in 2026. Fundamentally, that is the number that plugs into our distribution policy once we did the respective dividend distribution given the results in 25. Okay, so no changes to that. The result for 25 is known. We published the share buyback. Once we have the figure for 25 results, it's been ongoing. It's been executed at a relatively accelerated pace, but that's performed at arm's length by a financial institution that takes it away and executes it in the best way possible. So no changes to the total amount in 2026. As for CAPEX reading room for the next quarters, We do expect to land relatively close to what we had expected. We may come in a bit slightly above, but we don't expect any major deviations. We do have macro and a number of other elements pushing us forward, so we'll see how it actually lands, but I would not be signaling now on a major deviation from those numbers. If anything, slightly above. Thank you.

Thank you.

Thank you. Your next question today comes from the line of Matt Lofting from JP Morgan. Please go ahead.

Thanks for taking the questions. I just wanted to ask you for your thoughts. I mean, Gallup has a strong history in pursuing and forming strategic partnerships in businesses and specific assets. When you look now at the ongoing processes that you've talked about with MoVe in the upstream, but also referring a bit more to the merits of partnerships in renewables now as well, can you just sort of summarize the fundamental differences perhaps that you see in what you're trying to optimize or unlock between those two businesses? And then secondly, as the processes, if we assume, advance, What are the key principles are for how GALP can best ensure an appropriate financial and governance framework for stakeholders in the future?

Thank you. I'm Matt, and thank you for the question. So if in the GALP-MUEVE deal, it's clearly a scale deal, a deal that has a lot of complementary assets on both sides Portugal and Spain clearly a deal that will build an European platform on the industrial side a deal that will clearly build on the network and on the retail side a winning platform also to face the electric mobility CAPEX if we go to the renewable side we are clearly looking at a much different kind of partnerships We need to look at the financial side of it, the structures and the potential that we have to leverage these assets. So every time I mention what the returns that we are expecting, I remind you we are speaking about unlevered assets. And so building a bigger scale platform also on renewables and benefiting from the integration that we have on the energy management through the cycle, it's really, really important. So clearly two different animals, but on the renewable side, we clearly benefit to have a much more balanced portfolio after these two acquisitions to face that second step. Thank you.

So Matt, if I understood the second part of your question correctly, you're fundamentally asking about how are we standing in terms of Capital allocation priorities and how to communicate strategy moving forward. So on that again, we continue to have moving parts in the portfolio that we believe play to an overall strategy of making sure that our capital allocation is consistent with our core businesses and our ability to deliver an equity story that is very much a growth story Hinging on the performance of our upstream assets and their relative quality. So everything that we've been doing to clear up the portfolio speaks to this concern about making sure that we have the right capital allocation to each of the businesses reflecting their performance and their growth profile. We expect to continue to do that. A lot of what we've been doing has been precisely about are de-risking those assets, and a lot of what you saw us doing in upstream has been about that, so making sure that Namibia became a sufficiently de-risked asset with a partner that clearly will be an asset in developing the basin as we move forward. When we look to downstream, again, the principle has been one of making sure that the assets have a situation and a context within our portfolio that speaks to partners that can take forward the transition story that needs to happen in those assets that we can do so in a way that ring fences capital expenditures and gives full visibility into what is expected in terms of future performance and fundamentally future capex requirements while also giving us the ability to better explore the financing structure of those businesses. So giving us the ability to explore the opportunity to have further leverage on these businesses. So this is the story of what we've been doing and I expect that to be the guideline moving forward as we continue to go through the portfolio. So same story, very mindful of capital allocation, but very aware of the different and of the different drivers in our different businesses within the portfolio. Thank you.

Thanks both.

Thank you. Our next question comes from the line of Nash Tsui from Barclays. Please go ahead.

Good morning. Thanks for taking my questions to place. The first one is on production. You upgraded 2026 production guidance to around 130,000 barrels a day. Could you please talk about the drivers behind this upgrade and could we see upside beyond this level? And then the second question is on refining margin. You mentioned earlier that spot margin is more than $30 per barrel. and your assumption in the second half of the year is $10 per barrel, which seems conservative. I wonder if you could share your view on the margin outlook, please. Thank you.

Let me start with upstream production. I think there are two fundamental drivers behind what we're seeing in terms of our updated guidance for production. One is the fact that our legacy assets have been performing rather well We've actually seen both a lot of commitment from Petrobras, our core partner in Brazil, in making sure that the maintenance and the ability to deliver from those assets, for instance in Tupi, we're now engaging in a program that has over 40 initiatives to make sure that we drive the productivity of those wells far into their active lives. So good performances in our legacy assets. We've had maintenance with very few unplanned events and that is also one of the core aspects that we look into when we look at how we guide for the remainder of the year. So quite a bit of the expected maintenance for this year is well behind us. So we do I think that that is one of the factors bringing us to the top end of our guidance profile having said that this is planned maintenance we've been having extremely good performance on that respect but we always guide thinking into consideration that unplanned events may happen and we guide for a central scenario we don't guide for the best possible scenario so we always have a little bit of a buffer or a cushion there if you'd like for such for such eventual Now the real driver behind the change in numbers for our production is of course Bacalao. Bacalao has been ramping up. I think we're extremely aligned with Equinor in terms of the fact that this is a profile that we see as taking us to full ramp up towards the end of the year as we always mention. Now, having said that, this is a ramp-up, so it will have glitches, fluctuations. You've seen higher numbers early in the year. We are now in three producers, hoping to connect the fourth producer and have it fully online soon enough. So a very good path, very much in line with what we were expecting so far, but still, again, being cautious and acknowledging that this is a ramp-up So guiding for a central scenario and not for our best possible scenario. We're now seeing producers with extremely high flow rates that would give us very good performances. We're guiding for a central scenario, not for the top performances observed to date. Thank you.

Ness, going back to your question on refining margins, well, we are We are living a very particular world within the volatility that we have. And if you go back to the end of June, we clearly see a different scenario. And of course, escalation on the Middle East conflict, additional attacks on Russian refineries. Of course, they buzz and they have clearly a very, very sizable impact on the refining margins that we are having on the spot markets. But our present approach assumptions to the second half, we see them as the more consistent ones. Considering the fundamentals of the market, of course, you have all the sensibilities available. You can input those to your model and consider them. But we can see margins squeezed by rising input costs. We can see also some decrease on the oil product prices, mainly in diesel and jet. Should there be a stable hormones resolution? And we also need to consider some demand destruction at this point. So there are a number of factors that can also take some pressure out from the spot market, and we think it's the best way to approach our second half. But again, you can consider, you have the sensibilities with which we shared, and you can consider them in your model. Thank you.

Very helpful. Thank you both.

Thank you. Your next question today comes from the line of Christopher Coupland from Bank of America. Please go ahead.

Thank you very much for taking my questions. The first one goes back to your renewable acquisitions. You've spent just shy of 800 million euros and I'm just looking at your EBITDA guidance pro forma 110 Comparing that to what you gave us earlier for the EBITDA contribution from renewables as more than 30. So are we doing the right maths to sort of say, okay, you have acquired assets at a roughly 10 times plus EBITDA multiple? First question. And second question, can you help us a little bit quantifying that underlist impact in upstream on EBITDA? Thank you very much.

How we were registering in our accounts the numbers that were valid at the time that our partners were actually lifting those cargoes versus what is now that we've actually come through on the sales, the actual market prices for that. So this does bring quite a few swings into our numbers. I will remind you that first quarter was actually positive so we had a plus 50 there and that's all in all if you take the plus 50 on the quarter plus the number for the second quarter it's a significant swing quarter on quarter 110 million but overall the mechanics is that that I've just described it's bringing into our accounts at the moment of sale the difference vis-a-vis the prices registered at the time that our partners lift from the wells where we are in partnership. I hope this clears your question. Thank you.

Yep, thank you.

And Chris, on your first one, so you're absolutely right. So just to sum up, our underlying assumption on the wind power prices are around 50 euros per megawatt. And indeed, we are looking at 10% returns, again, and levered assets. Thank you.

Thank you. Our next question today comes from the line of Ahmed Ben Salim from OdoBHF. Please go ahead.

Hi, thank you for taking my question. You raised in 2006 EBITDA guidance to around €4 billion, largely reflecting strong Brent and refining margins. How much of the upgrade comes from the macro assumptions versus underlying operational improvement? Thank you.

Thank you Ahmed. So from the total upgrade, I think I mentioned it briefly before, but overall there's approximately 25% of this upgrade coming from operational drivers and the remainder is indeed the reflection of the macro tailwind. So these operational upgrades are distributed across the portfolio. but all in all fundamentally accounts for those operational changes that we see in terms of volumes and in terms of actual operational performance. Thank you.

Thank you.

Thank you. Our next question today comes from the line of Fernando Abril-Morterel from Atlanta. Please go ahead.

Yes, hello, good morning. Thank you for taking my question, only one. Based on the comments you've made on the leverage target for the retail core and the industrial core, and also based on the targeted stakes you want to have in each of the subsidiaries, is it possible that the deal could generate an extra dividend upstream to the whole core level to you guys, to GALP? and if so, what would you do with those proceeds? An extra DPS for shareholders or bringing leverage down further? I don't know. Any comments on this would be helpful. Thank you very much.

Hi, Fernando. I really understand your question, but it's too early to have an answer. Of course, your options make sense, but we cannot comment on that. It's too early. We are still triggering all the valuations. We are still triggering all the agreements. And it's not the time to speak about that, as Maria Joao already alluded to. Thank you.

Okay. Thank you.

Thank you. We will now take our final question for today. And the final question comes from the line of Sadnan Ali from HSBC. Please go ahead.

Hi there, thanks for taking my questions. Two, please. The first one on refining, can you just talk to us about your operational performance at Sheena's over the past few months? I think with the 1Q results, you said you made changes to your hydrocracker to increase the jet yield, and I was just wondering if you've made any other operational changes over the past few months. And with that, can you just remind us how much flexibility and agility you have in your system to, say, alter the crude slate or the product yield slate on a short-term basis? and then secondly, just in the commercial division, the discount mechanisms in place for Spain and Portugal. Can you quantify the impact it's had so far this year and your expectations going forward? Thank you.

On the first one, Sadman, so it's, well, we are having a pretty high throughput through the quarter and we are expecting a higher throughput versus what we were assuming. So we were assuming around 80 million barrels. We are on the 80-85 range. I've mentioned already, so we are expecting light maintenance activities on the hydrocracker in September. And let me also give you some numbers on Sines, Outskirts, which are roughly 45% middle distillates, on which JET accounts for around 10%. We are trying and we have the flexibility to to rise it to 13%. That's where we are looking at. At this point, we are on the 14%. The normal is a 10% ratio, and that's what we are expecting. So we are expecting to operate with full availability during July and August and having these minor maintenance activities in September. Thank you.

Thank you. This concludes the Q&A and today's conference call. Thank you for participating. You may now disconnect.