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Rio de Janeiro - November 6, 2018 - FINANCIAL REPORT THIRD QUARTER OF 2018 RESULTS - Consolidated financial information revised by independent auditors, prepared in accordance with International Financial Reporting Standards - IFRS.

Net income
R$ 6,644 million

Production
2,514 kboed

Adjusted EBITDA
R$ 29,856 million

Main highlights

Results

Petrobras reported net income of R$ 23,677 million in 9M-2018, the best result since 2011 and a growth of 371% compared to the 9M-2017, determined by:

  • Higher margins in the sales of oil products in Brazil and in exports, both driven by the increase in Brent and the depreciation of the Brazilian Real;
  • Increase in diesel sales with expansion of market share;
  • Lower general and administrative expenses, keeping the cost control discipline; and
  • Reduction of interest expenses due to the decrease in indebtedness.

 

In September, agreements with DOJ and SEC were signed to close the investigation of the US authorities, totaling R$ 3.5 billion and reducing the risk for the company. Excluding these agreements, as well as the Class Action Agreement effects, the net profit would be R$ 10,269 million in the quarter and R$ 28,012 million in the accumulated of the year.

Adjusted EBITDA* was R$ 85,691 million, 35% higher than in 9M-2017, due to the increase in the sales margins of oil products in Brazil and exports. Adjusted EBITDA margin was 33%.

Free Cash Flow * remained positive for the fourteenth consecutive quarter, reaching R$ 37,481 million in 9M-2018, same level as in the previous year, due to the increase in operating cash generation, despite the payments related to the Class Action agreement, and higher investments.

Considering the accumulated profit, the reduction of uncertainties with the Class Action agreements and with the DOJ / SEC and the financial leverage target, a higher anticipation of Interest on Shareholder’s Equity was approved, totaling R$ 0.10 per share, to preferred and common shares, adding to R$ 1,304.4 million. As a result, the anticipation totaled R $ 2,608.8 million.

Top Metrics

TRI: After a significant reduction since 2015, the TRI (total recordable injuries per million man-hours) remained at 1.06, same level as in the previous quarter. The company works for the continuous improvement of culture and safety conditions and adopts the alert limit of 1.0.

Financial Leverage: Gross debt reached US$ 88,115 million, while Net debt reached US$ 72,888 million, a reduction of 19% and 14%, respectively, compared to December 2017. The liability management led to the increase in the weighted average maturity to 9 years, with average interest rate of 6.2%. The Net Debt/LTM Adjusted EBITDA* ratio decreased to 2.96 in September 2018, compared to 3.67 in 2017. Leverage* decreased to 50% in this period. Excluding the  Class Action agreement, the company would present the ratio of 2.66, on a converging path to the target of 2.5.

Other highlights

  • Started production through the FPSOs Cidade Campos dos Goytacazes in the field of Tartaruga Verde, P-74 in the field of Búzios and P-69 in the field of Lula (October)
  • Acquisition of the Block of Sudoeste de Tartaruga Verde, in the 5th bidding round of Production Sharing Agreement promoted by the ANP
  • Celebration of partnerships with Equinor for business in the offshore wind energy segment in Brazil, with Total in the renewable energy segment, with CNPC in the Comperj project and Marlim cluster and with Murphy in the Gulf of Mexico
  • The company maintained its position as a net exporter, with a balance of 272 thousand bpd in 9M-2018
  • Received a total of R$ 1.6 billion related to the second phase of the diesel subsidy program
  • Adopted the complementary hedge mechanism for gasoline, allowing for less frequent price readjustments
  • The company received R$ 1.7 billion recovered by the ”Car Wash" operation
  • Signed an Integrity Pact to improve transparency and corruption prevention measures
  • Adopted the new Employee Carrer and Compensation Plan, to improve mobility and meritocracy
  • Resumed the operation of the Paulínia refinery (Replan) with 50% of its capacity, following an accident without victims.

 

* See definitions of Free Cash Flow, Adjusted EBITDA, LTM Adjusted EBITDA, Adjusted EBITDA Margin, Net Debt and Leverage in glossary and the respective reconciliations of such items in Liquidity and Capital Resources, Reconciliation of Adjusted EBITDA, LTM Adjusted EBITDA and Net Debt.

 

Audio of the Earnings Announcement 3Q18

Rio de Janeiro – August 03, 2018 - FINANCIAL REPORT SECOND QUARTER OF 2018 RESULTS - Derived from consolidated interim financial information revised by independent auditors, prepared in accordance with International Financial Reporting Standards - IFRS

 

Net income
R$ 10,072 million

Production
2,563 mil boed

Adjusted EBITDA
R$ 30,067 million

Main highlights
  • Results 

Petrobras reported net income of R$ 17,033 million in 1H-2018, a growth of 257%, being the best semester result since 2011, determined by:

Increase in the Brent prices, which resulted in higher margins in oil exports and in oil product sales in Brazil, together with the depreciation of Brazilian real;

Reduction of interest expenses due to the decrease in indebtedness; 

Lower general and administrative expenses and equipment idleness; and

On the other hand, the higher Brent prices led to an increase in production taxes.

The operational generation and the cash-in from divestments of US$ 4,914 million led to amortization and prepayment of debt, resulting in a significant 16% decrease in gross debt, which reached US$ 91,712 million and 13% in net debt of US$ 73,662 million.

Free Cash Flow * remained positive for the thirteenth quarter in a row, reaching R$ 29,366 million in 1H-2018, a 29% increase compared to the first half of the previous year, mainly due to the higher operating generation, combined with the lower investments.

Pursuant to the Shareholders' Remuneration Policy and taking into account the net income obtained in the quarter and the financial deleveraging target, the anticipation of interest on own capital, in the amount of R$ 0.05 per share, both for preferred and common shares, adopting the same amounts already distributed in 1Q-2018 of R$ 652.2 million. In view of that, the anticipation of interest on own capital totaled R$ 1,304.4 million in the semester.

  • Metric - Net Debt / Adjusted EBITDA

Adjusted EBITDA* increased 26% compared to 1H-2017, to R$ 55,835 million, due to higher oil products  domestic sales and oil export sales, both as a result of the increase in Brent prices and of the depreciation of Brazilian real. Adjusted EBITDA margin was 35%.

The net debt to LTM Adjusted EBITDA* ratio decreased to 3.23 in June 2018, compared to 3.67 in December 2017. Leverage* reduced from 51% to 50% in this period.

Excluding the provision for the Class Action agreement, the company would have presented the net debt / LTM Adjusted EBITDA ratio of 2.86, on a convergent path to the target of 2.5 until the end of 2018.

  • Operating highlights

Petrobras' total production of oil and natural gas in 1H-2018 was 2,669 thousand barrels of oil equivalent per day (boed), of which 2,572 thousand boed in Brazil, 4% less than 1H-2017, mainly reflecting divestments in Lapa and Roncador fields.

In this quarter, there was start-up of the first production system in the Transfer of Rights area, in Buzios field, with FPSOs P-74, and a new production system in the Campos Basin, in Tartaruga Verde field. It is also worth to highlight the increase of the exploratory portfolio, through the acquisition of areas with high potential, in the ANP Bid Rounds.

Compared to 1H-2017, domestic oil products production fell by 3%, while domestic oil products sales fell by 6% to 1,759 thousand barrels per day (bpd) and 1,823 thousand bpd, respectively, due to the reduction in sales of naphtha to Braskem and the loss of market share from gasoline to ethanol. Compared to 1Q-2018, there was an increase in the market share of diesel and gasoline, resulting in an increase in sales volume, especially diesel, which grew 15%.

The company maintained its position as a net exporter, with a balance of 372 thousand bpd in 1H-2018 (vs. 401 thousand bpd in 1H-2017).

 

 

* See definitions of Free Cash Flow, Adjusted EBITDA, LTM Adjusted EBITDA, Adjusted EBITDA Margin, Net Debt and Leverage in glossary and the respective reconciliations of such items in Liquidity and Capital Resources, Reconciliation of Adjusted EBITDA, LTM Adjusted EBITDA and Net Debt.

Audio of the Earnings Announcement 2Q18

Rio de Janeiro – May 08, 2018 - FINANCIAL REPORT FIRST QUARTER OF 2018 RESULTS - Derived from consolidated interim financial information revised by independent auditors, prepared in accordance with International Financial Reporting Standards - IFRS

Net income
R$ 6,961 million

Production
2,680 mil boed

EBITDA
R$ 25,669 million

Main highlights
  • Results

Petrobras reported net income of R$ 6,961 million in the 1Q-2018, 56% higher than the 1Q-2017, determined by the following factors:

•    Increase in Brent prices, which resulted in higher margins of oil exports;

•    Higher profit with sales of oil products, as a result of the implemented pricing policy;

•    Rise in margins and volumes in the natural gas sales;

•    Gain of R$ 3,223 million on sale of the assets of Lapa, Iara and Carcará;

•    Lower expenses with drillship idleness; and

•    Reduction on general and administrative expenses.

In view of the net income presented in the quarter, the new Shareholders Remuneration Policy and also considering the leverage metric of the company, it was approved the anticipation of interest on own capital, in the amount of R$ 0.05 per share, both to ordinary and preferred shares.

Free Cash Flow * remained positive for the twelfth consecutive quarter, reaching R$ 12,993 million in 1Q-2018, down 3% from the previous year. This result was impacted by the payment of the first installment of Class Action and the hedge of part of the oil production.

Metric - Net Debt / Adjusted EBITDA

Gross debt decreased from R$ 361,483 million in December 2017 to R$ 340,979 million and net debt decreased from R$ 280,752 million to R$ 270,712 million. In U.S. dollars, the drop in net debt was from US$ 84,871 million to US$ 81,447 million, representing a reduction of 4%. In addition, liability management made it possible to increase the average maturity of the debt from 8.62 years to 9.26 years, with increase in the average interest rate from 6.1% to 6.2%.

Adjusted EBITDA* increased 2% in relation to 1Q-2017, to R$ 25,669 million due to increased sales margins.Adjusted EBITDA margin was 34%.

The net debt to LTM Adjusted EBITDA* ratio reached 3.52 in March 2018, after having reached 3.67 as of December 2017. Leverage* decreased from 51% to 49% in the same period.

Excluding the Class Action effect, the net debt/LTM Adjusted EBITDA index would have reached 3.07.

Operating highlights

Petrobras' total crude and natural gas production in 1Q-2018 was 2,680 thousand barrels of oil equivalent per day (boed), of which 2,582 thousand boed in Brazil, 4% lower than in 1Q-2017, mainly reflecting the maintenance stoppages and divestment of Lapa.

Production of oil products in Brazil fell 7%, while the sale of oil products dropped 9% in relation to 1Q-2017, totaling 1,679 thousand barrels per day (bpd) and 1,768 thousand bpd, respectively. In relation to 4Q-2017, gasoline and diesel sales decreased due to lower demand, although there was a recovery of market share in diesel, because of the pricing policy implemented at the end of 2017. For the natural gas, there was an increase of 7% in sales volumes, compared to 1Q-2017.

The Company sustained the position of net exporter, with 507 thousand bpd of balance in 1Q-2018 (vs. 489 thousand bpd in 1Q-2017), due to the 38% decrease in imports.

 

 

 

* See definitions of Free Cash Flow, Adjusted EBITDA, LTM Adjusted EBITDA, Adjusted EBITDA Margin, Net Debt and Leverage in glossary and the respective reconciliations of such items in Liquidity and Capital Resources, Reconciliation of Adjusted EBITDA, LTM Adjusted EBITDA and Net Debt.

Audio of the Earnings Announcement 1Q18