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Rio de Janeiro – March 21, 2017 - FINANCIAL REPORT FOURTH QUARTER OF 2016 RESULTS - Derived from consolidated interim financial information audited by independent auditors, prepared in accordance with International Financial Reporting Standards - IFRS.

Net income
R$ 2,510 billion

Production
2,144 Mbbl/d

Adjusted EBITDA
R$ 24,788 million

Main highlights

Main financial highlights

  • Net income of R$ 2,510 million in 4Q16, compared to a loss of R$ 16,458 million in 3Q-2016, as a result of:
  • operating income of R$ 11,811  million, compared to an operating loss of R$ 10,032 million in the 3Q-2016, mainly due to lower impairment charges;
  • decrease of 25% in net finance expenses;
  • increase of 12% in exports, which reinforces the Company’s position as net exporter;
  • sales, general and administrative expenses reduced by 6%; and
  • gross gains on the sale of interests in Block BM-S-8 (Carcará), totaling R$ 2,947 million.
  • Adjusted EBITDA* of R$ 24,788 million in 4Q-2016, 11% higher than 3Q-2016 and of R$ R$ 88,693 million in 2016, 16% above 2015, reflecting higher diesel and gasoline margins and lower costs with imports and government take. Adjusted EBITDA margin was of 35% in the 4Q-2016.
  • In 2016, free cash flow* was of R$ 41,572 million, 2.6x above 2015, reflecting the investments reduction in 32% and the improved capital discipline. It was the seventh quarter in a row of positive free cash flow*, reaching R$ 11,953 million in 4Q-2016, 27% lower than 3Q-2016.
  • Gross debt decreased 22%, from R$ 493,023 million as of December 31, 2015 to R$ 385,784 million as of December 31, 2016 (a reduction of R$ 107,239 million), due to:
  • debt pre-payment and amortization, using resources from divestments and operations; and
  • appreciation of the Brazilian real in 16.5%.
  • Net debt* decreased by 20%, from R$ 392,136 million as of December 31, 2015 to US$ 314,120 million as of December 31, 2016.
  • In dollars, the decrease was of 4% (US$ 4,044 million), from US$ 100,425 million as of December 31, 2015 to US$ 96,381 million as of December 31, 2016. In addition, the liquidity management led to an average maturity of outstanding debt to increase from of 7.14 years as of December 31, 2015 to 7.46 years as of December 31, 2016.
  • There was a significant reduction of the ratio between net debt and Adjusted EBITDA*, from 5.11 as of December 31, 2015 to 3.54 as of December 31, 2016. During the same period, leverage decreased from 60% to 55%.
  • Petrobras employees as of December, 31st,2016 were 68,829, a decrease of 12% compared to 2015, due to the Voluntary Separation Incentive Plan. The workforce reduced 20%.

Main operating highlights

  • Average crude oil production in Brazil reached, in 2016, a yearly historic record of 2,144 thousand barrels per day (bpd), 0.75% above the previous year and aligned with the goal of 2,145 thousand bpd for the period. The Company reinforced its commitment to its planned projections for the second consecutive year.
  • Total crude oil production in Brazil was 2,243 thousand bpd in 4Q-2016, an increase of 1% compared to 3Q-2016. In December, several production records were achieved:
  • crude oil and natural gas production in Brazil and abroad reached 2,937 thousand barrels of oil equivalent per day (boed);
  • crude oil and natural gas production in Brazil reached 2,811 thousand boed; and
  • crude oil and natural gas production operated by Petrobras in the pre-salt layer reached 1,580 thousand boed;
  • In 4Q-2016, output of domestic oil products decreased by 3% to 1,810 thousand bpd. Domestic oil product sales decreased 4% to 2,001 thousand bpd, while crude oil and oil products exports increased by 13%, reaching 634 thousand bpd.

In 2016, the Company achieved the position of net exporter, due to the increase in exports of 6% and reduction in imports of 30%.

 

* See definitions of Free cash flow, Adjusted EBITDa and Net Debt in glossary and the respective reconciliations of such items in Liquidity and Capital Resources, Reconciliation of Adjusted EBITDA and Debt.

 

Audio of the Earnings Announcement 4Q16

Rio de Janeiro – November 10, 2016 - THIRD QUARTER OF 2016 RESULTS - Derived from consolidated interim financial information reviewed by independent auditors, prepared in accordance with International Financial Reporting Standards - IFRS.

Loss
R$ 16.5 billion

Production
2,869 Mbbl/d

Adjusted EBITDA
R$ 21,603 million

Main highlights

Main financial highlights 3Q-2016 x 2Q-2016

• Net loss of R$ 16,458 million, compared to net income of R$ 370 million in the 2Q-2016, as a result of:
 - Impairment of assets and investment in associates of R$ 15,709 million, due to the review of assumptions, such as Brent prices and long term exchange rates, and the portfolio of investments in the context of the 2017-2021 Business and Management Plan, finalized and approved in 3Q-2016 , as well as the appreciation of the real and the increase in discount rates;
 - Reclassification of foreign exchange losses, due to the sale of Petrobras Argentina (PESA);
 - Higher expenses with the new Voluntary Separation Incentive Plan;
 - Provision for expenses with settlements of individual securities actions against Petrobras in New York;
 - Provision for assumption of debts and losses related to advance for suppliers for the construction of FPSO hulls; and
 - These facts were partially offset by the positive effect of the revision of decommissioning costs in oil and gas production areas, lower expenses with drilling rigs idleness and capital gains with the sale of PESA.

• Positive free cash flow* for six quarters in a row, amounting to R$ 16,448, 52% above 2Q-2016, due to the increase in operating cash generation in 22% and the reduction in investments in 8%, and 3.6x higher, on an accumulated basis, than the Jan-Sep/2015 period.

• Adjusted EBITDA* of R$ 21,603 million in the 3Q-2016, 6 % above the 2Q-2016, due to the increase in production and exports of oil and lower expenditures with imports, amounting R$ 63.011 million on Jan-Sep/2016,  11% superior compared to Jan-Sep/2015.

• Gross debt decreased 19%, from R$ 493,023 million in December 31, 2015 to R$ 398,165 million in September 30, 2016 (a R$ 94,858 million decrease), mainly due to the appreciation of the real. Net debt* decreased from R$ 392,136 million in December 31, 2015 to US$ 325,563 million in September 30, 2016, a 17% drop.

• Net debt / LTM adjusted EBITDA* decreased from 5.31 as of December 31, 2015 to 4.07 as of September 30, 2016 and leverage decreased from 60% to 55%.

• Sales, general and administrative expenses decreased 2%, despite the provision for higher labor costs due to wage increases related to the 2016 Collective Bargaining Agreement.

Main operating highlights 3Q-2016 x 2Q-2016

• Total crude oil and natural gas production was 2,869 thousand barrels of oil equivalent per day (boed), an increase of 2% compared to the 2Q-2016.

• In September, we broke several production records, among which oil and gas production in Brazil (2,753 kboed) and operated oil and gas production in the pre-salt (1,464 kboed).

•    Domestic oil products output decreased 3% to 1,862 thousand barrels per day (bpd), while domestic sales decreased 1% to 2,088 thousand bpd.

•    Crude oil and oil products exports increased 9%, to 562 thousand bpd.

* See definitions of Free cash flow, Adjusted EBITDA, LTM Adjusted EBITDA and Net Debt in glossary and the respective reconciliations in Liquidity and Capital Resources, Reconciliation of Adjusted EBITDA, Debt and LTM Adjusted EBITDA.

Audio of the Earnings Announcement 3Q16

Rio de Janeiro – August 11, 2016 - SECOND QUARTER OF 2016 RESULTS - Derived from consolidated interim financial information reviewed by independent auditors, prepared in accordance with International Financial Reporting Standards - IFRS.

Net income
R$ 0.4 billion

Production
2,804 Mbbl/d

Adjusted EBITDA
R$ 20,317 million

Main highlights

Main financial highlights 2Q-2016 x 1Q-2016

  • Net income attributable to the shareholders of Petrobras of R$ 370 million, compared to net loss of R$ 1.246 million in the 1Q-2016, as a result of:

- A decrease of 30% in net finance expenses;
- An increase of 7% in crude oil and natural gas total production;
- Higher revenues with an increase of 14% in crude oil and oil products exports and lower costs related to natural gas imports;
- Expenses related to the new Voluntary Separation Incentive Plan (PIDV); and
- Impairment losses related to Comperj assets.

  • The higher cash provided by operating activities and the decrease of capital expenditures and investments resulted in a positive free cash flow* for the fifth consecutive quarter of R$ 10,790 million in the 2Q-2016, 3.5 times higher when compared to R$ 2,381 million in the 1Q-2016.
  • Adjusted EBITDA* of R$ 20,317 million in the 2Q-2016, 4% lower compared to the 1Q-2016.
  • Gross indebtedness decreased 19%, from R$ 493,023 million in December 31, 2015 to R$ 397,760 million, a reduction of R$ 95,263 million. Net debt* decreased 15%, from R$ 392,136 million to R$ 332,390 million.
  • The ratio between net debt and the Last Twelve Months (LTM) Adjusted EBITDA* decreased from 5.31 as of December 31, 2015 to 4.49 as of June 30, 2016 and the leverage decreased from 60% to 55%.
  • The issuing of global notes totaling US$ 6.75 billion and the tender offer of US$ 6.3 billion generated the increase of average maturity of outstanding debt from 7.14 years as of December 31, 2015 to 7.30 years as of June 30, 2016.

 

Main operating highlights 2Q-2016 x 1Q-2016

  • Total crude oil and natural gas production was 2,804 thousand barrels of oil equivalent per day (boed), an increase of 7% compared to the 1Q-2016.
  • Domestic oil products output decreased 2% to 1,919 thousand barrels per day (bpd) and the domestic sales increased 3% to 2,109 thousand bpd.
  • Crude oil and oil products exports increased 14% to 515 thousand bpd and average Brent price increased 34% to US$/bbl 45.57.
  • Reduction of 55% in LNG imports due to higher domestic gas supply and lower thermoelectric demand.

 

* See definitions of Free cash flow, Adjusted EBITDA, LTM Adjusted EBITDA and Net Debt in glossary and the respective reconciliations in Liquidity and Capital Resources, Reconciliation of Adjusted EBITDA, Debt and LTM Adjusted EBITDA.

Audio of the Earnings Announcement 2Q16

Rio de Janeiro – May 12, 2016 - FIRST QUARTER OF 2016 RESULTS - Derived from interim financial information reviewed by independent auditors, stated in millions of Brazilian Reais, prepared in accordance with International Financial Reporting Standards - IFRS issued by the International Accounting Standards Board - IASB.

Loss
R$ 1.2 billion

Production
2,616 Mbbl/d

Adjusted EBITDA
R$ 21,091 million

Main highlights

Main financial highlights (1Q-2016 x 1Q-2015):

• Net loss attributable to the shareholders of Petrobras of R$ 1,246 million, as a result of:

  - Higher interest expenses, inflation indexation charges and foreign exchange losses, totaling R$ 9,579 million in the 1Q-2016;
  - A 7% decrease in crude oil and natural gas production (in Brazil and abroad);
  - A 8% decrease in domestic oil product sales;
  - Higher depreciation expenses; and
  - Higher idleness expenses with equipments, mainly related to drilling rigs.

• Adjusted EBITDA of R$ 21,091 million in the 1Q-2016, compared to R$ 21,518 million in the 1Q-2015. The Adjusted EBITDA Margin reached 30% in the 1Q-2016.

• Positive free cash flow of R$ 2,381 million in the 1Q-2016 (compare to the negative free cash flow of R$ 1,253 million in the 1Q-2015), due to higher diesel and gasoline domestic margins, decreased production taxes, import costs and lower capital expenditures and investments.

• The gross indebtedness in Reais was R$ 450,015 million in March 31, 2016, a 9% decrease (R$ 42,834 million) compared to December 31, 2015 (R$ 492,849 million).

• Net debt was US$ 103,821 million as of March 31, 2016, a 3% increase when compared to December 31, 2015.
• The ratio between net debt and the Last Twelve Months (LTM) Adjusted EBITDA decreased from 5.31 as of December 31, 2015 to 5.03 as of March 31, 2016 and the leverage decreased from 60% to 58%.

 

Main operating highlights (1Q-2016 x 1Q-2015):

• Total crude oil and natural gas production decreased 7%, reaching 2,616 thousand barrels of oil equivalent per day (boed).

• Oil product output in Brazil remained relatively flat, totaling 1,958 thousand barrels per day (bpd) and domestic sales volumes reached 2,056 thousand bpd.

• A 14% increase in crude oil and oil product exports (56 thousand bpd) and a 37% decrease of average Brent price (to US$ 33.89/bbl).

• A 21% decrease in lifting costs excluding production taxes in Brazil (to US$ 10.49/bbl).

 

Audio of the Earnings Announcement 1Q16