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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