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Rio de Janeiro - May 11, 2017 - FIRST QUARTER OF 2017 RESULTS - Derived from consolidated interim financial information reviewed by independent auditors, prepared in accordance with International Financial Reporting Standards - IFRS.

Net income
R$ 4,449 billion

Production
2.182 Mbbl/d

Adjusted EBITDA
R$ 25.254 million

Main highlights

Main financial highlights

  • Net income of R$ 4,449 million in 1Q17, compared to a loss of R$ 1,246 million in 1Q-2016, as a result of:
    • lower oil and natural gas imports costs, due to the higher share of national oil in the processed feedstock and to the higher domestic natural gas production;
    • higher level of exports, that reached 782 thousand barrels per day (bpd), 72% above 1Q-2016, with higher average prices;
    • sales, general and administrative expenses, 27% lower than 1Q-2016;
    • decrease of 11% in net finance expenses; and
    • lower expenses associated with asset write-offs and with drilling rigs idleness.
  • Adjusted EBITDA* of R$ 25,254 million in 1Q-2017, 19% higher than 1Q-2016, reflecting lower operational expenses and import costs. Adjusted EBITDA Margin* was 37% in 1Q-2017.
  • In 1Q-2017, Free Cash Flow* was positive for the eighth quarter in a row, reaching R$ 13,368 million, 5.6x 1Q-2016. This result reflects the combination of improvement in the operational generation and reduction in investments.
  •  Gross debt decreased 5%, from R$ 385,784 million as of December 31, 2016 to R$ 364,758 million as of March 31, 2017 and Net debt* decreased 4%, from R$ 314,120 million as of December 31, 2016 to R$ 300,975 million as of March 31, 2017.
  •  In dollars, the decrease was of 1% (US$ 1,388 million) in net debt, from US$ 96,381 million as of December 31, 2016 to US$ 94,993 million as of March 31, 2017. In addition, the liquidity management led to a weighted average maturity of outstanding debt to increase from of 7.46 years as of December 31, 2016 to 7.61 years as of March 31, 2017.
  •  Reduction of the ratio between Net debt* and LTM Adjusted EBITDA*, from 3.54 as of December 31, 2016 to 3.24 as of March 31, 2017. During the same period, leverage decreased from 55% to 54%.
  •  Petrobras employees as of March, 31st,2017 were 65,220, a decrease of 17% compared to March 31st, 2016, due to the voluntary separation incentive plan.


Main operating highlights

  •  Average crude oil production in Brazil reached, in 1Q-2017, 2,182 thousand bpd, 10% above the average crude oil production in 1Q-2016. Total crude oil production reached 2,248 thousand bpd in 1Q-2017, an increase of 9% compared to 1Q-2016.
  •  In 1Q-2017, output of domestic oil products decreased by 8% when compared to 1Q-2016, to 1,811 thousand bpd. Domestic oil product sales decreased 5% to 1,951 thousand bpd.
  •  The Company sustained its position of net exporter, due to the increase in exports of 72% and reduction in imports of 40%, when compared to 1Q-2016.

 

* See definitions of Free Cash Flow, Adjusted EBITDA, LTM Adjusted EBITDA, Adjusted EBITDA Margin and Net debt 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 1Q17