UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of the

Securities Exchange Act of 1934

 

For the month of May, 2022

 

Commission File Number 1-15106

 

 

PETRÓLEO BRASILEIRO S.A. – PETROBRAS

(Exact name of registrant as specified in its charter)

 

Brazilian Petroleum Corporation – PETROBRAS

(Translation of Registrant's name into English)

 

Av. Henrique Valadares, 28 – 19th floor
20231-030 – Rio de Janeiro, RJ
Federative Republic of Brazil

(Address of principal executive office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. 

Form 20-F ___X___ Form 40-F _______

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes _______ No___X____

 

 

 
 

 
 

Petrobras financial performance in 1Q22

Rio de Janeiro, May 05, 2022 - Once again we delivered solid quarterly results. “These financial results are due to the fact that today we have a healthy Petrobras, which has reduced its debt burden, invests responsibly and operates efficiently. Therefore, it is possible to generate this compelling return to our shareholders, especially the Brazilian society, represented by the State. This generates economic development throughout the production chain, generating jobs, income and tax revenues for the country. In this quarter, we have paid out to the federal government, states and municipalities the equivalent of 1.5 times our net income. Petrobras is distributing the fruits of its value generation to the Brazilian population”, underlines Petrobras’ CEO, José Mauro Coelho.

According to the CFO, Rodrigo Araujo Alves, "First quarter results show that we stand firm in our trajectory of transforming Petrobras into a much more solid company that invests responsibly and is able to create and distribute wealth to our shareholders and to society. In this regard, we approved shareholder remuneration of R$ 3.72 per common and preferred share. Additionally, in the first quarter alone, we collected a total of R$ 69.9 billion in taxes and government take, an increase of 95% compared to the first quarter of last year”.

Main achievements:

§ Recurring EBITDA of US$ 15.1 billion (+35% vs 4Q21) and free cash flow of US$ 7.9 billion (+6% vs 4Q21).
§ Net debt of US$ 40.1 billion (-16% vs 4Q21), resulting in a Net Debt/EBITDA ratio of 0.8x.
§ Recurring net income of US$ 8.4 billion (+96% vs 4Q21).
§ Strong cash generation, solid liquidity and the outlook for sustainable results allowed the Company to approve shareholder remuneration in the amount of R$ 3.72 per outstanding common and preferred share.

 

 

 

 

 

This report may contain forward-looking statements. Such forward-looking statements only reflect expectations of the Company's managers regarding future economic conditions, as well as the Company's performance, financial performance and results, among others. The terms "anticipates", "believes", "expects", "predicts", "intends", "plans", "projects", "objective", "should", and similar terms, which evidently involve risks and uncertainties that may or may not be anticipated by the Company and therefore are not guarantees of future results of the Company's operations that may differ from current expectations. The readers should not rely exclusively on any forward-looking statement contained herein. The Company does not undertake any responsibility to update the presentations and forecasts in the light of new information or its future developments, and the figures reported for 1Q22 onwards are estimates or targets. These indicators do not have standardized meanings and may not be comparable to indicators with a similar description used by others. We provide these indicators because we use them as measures of company performance; they should not be considered in isolation or as a substitute for other financial metrics that have been disclosed in accordance with BR GAAP or IFRS. See definitions of Free Cash Flow, Adjusted EBITDA and Net Indebtedness in the Glossary and their reconciliations in the Liquidity and Capital Resources sections, Reconciliation of Adjusted EBITDA and Net Indebtedness. Consolidated accounting information audited by independent auditors in accordance with international accounting standards (IFRS).

 

2  
 

Main items *

Table 1 – Main items

        Variation (%)
 US$ million 1Q22 4Q21 1Q21

1Q22 /

4Q21

1Q22 /

1Q21

Sales revenues 27,189 24,031 15,698 13.1 73.2
Gross profit 14,410 10,579 8,007 36.2 80.0
Operating expenses (2,142) (257) (2,032) 733.5 5.4
Consolidated net income (loss) attributable to the shareholders of Petrobras 8,605 5,636 180 52.7 4,680.6
Recurring consolidated net income (loss) attributable to the shareholders of Petrobras * 8,373 4,266 224 96.3 3,637.9
Net cash provided by operating activities 10,308 9,196 7,244 12.1 42.3
Free cash flow 7,932 7,511 5,594 5.6 41.8
Adjusted EBITDA 14,961 11,276 8,906 32.7 68.0
Recurring adjusted EBITDA * 15,061 11,190 8,683 34.6 73.5
Gross debt (US$ million) 58,554 58,743 70,966 (0.3) (17.5)
Net debt (US$ million) 40,072 47,626 58,424 (15.9) (31.4)
Net debt/LTM Adjusted EBITDA ratio 0.81 1.09 2.03 (25.7) (60.1)
Average commercial selling rate for U.S. dollar 5.23 5.58 5.47 (6.3) (4.4)
Brent crude (US$/bbl) 101.40 79.73 60.90 27.2 66.5
Domestic basic oil by-products price (US$/bbl) 104.62 87.00 63.82 20.3 63.9
TRI (total recordable injuries per million men-hour frequency rate) 0.51 0.54 0.62 (5.6) (17.7)
ROCE (Return on Capital Employed) 9.9% 7.8% 2.8% 2,1 p.p. 7,1 p.p.

* See reconciliation of Recurring net income and Adjusted EBITDA in the Special Items section.

3  
 

Consolidated results

 

Net revenues

Table 2 – Net revenues by products

        Variation (%)
US$ million 1Q22 4Q21 1Q21

1Q22 /

4Q21

1Q22 /

1Q21

Diesel 7,483 6,756 4,578 10.8 63.5
Gasoline 3,725 3,762 2,022 (1.0) 84.2
Liquefied petroleum gas (LPG) 1,186 1,164 916 1.9 29.5
Jet fuel 991 815 426 21.6 132.6
Naphtha 611 480 331 27.3 84.6
Fuel oil (including bunker fuel) 366 507 335 (27.8) 9.3
Other oil products 1,274 1,181 878 7.9 45.1
Subtotal Oil Products 15,636 14,665 9,486 6.6 64.8
Natural gas 1,723 1,798 1,037 (4.2) 66.2
Crude oil 1,761 591 53 198.0 3222.6
Renewables and nitrogen products 66 6 13 1000.0 407.7
Revenues from non-exercised rights 104 43 67 141.9 55.2
Electricity 293 730 543 (59.9) (46.0)
Services, agency and others 238 240 161 (0.8) 47.8
Total domestic market 19,821 18,073 11,360 9.7 74.5
Exports 6,735 5,388 4,137 25.0 62.8
   Crude oil 4,812 3,300 2,801 45.8 71.8
   Fuel oil (including bunker fuel) 1,885 1,856 1,201 1.6 57.0
   Other oil products and other products 38 232 135 (83.6) (71.9)
Sales abroad (*) 633 570 201 11.1 214.9
Total foreign market 7,368 5,958 4,338 23.7 69.8
Total 27,189 24,031 15,698 13.1 73.2

In 1Q22, net revenue grew 13% compared to 4Q21, mainly due to the 27% increase in Brent prices, higher volumes of oil sales in the domestic market due to the sale of the Mataripe refinery (RLAM), which was concluded on November 30, 2021, and the higher volume of oil exports due to the growth in oil production and the realization of ongoing exports from 4Q21. These effects were partially offset by the lower volume of oil product sales in the domestic market mainly due to seasonal aspects and the divestment of RLAM, impacting sales of diesel, gasoline and LPG in 1Q22.

There was also a drop in electricity revenues, given the lower thermoelectric generation due to the improvement in hydrological conditions in 1Q22.

In terms of the breakdown of revenues in the domestic market, diesel and gasoline continued to be the main products, together accounting for 72% of oil products domestic sales in 1Q22.

4  
 

 

Graph 1 – Oil products sales revenues 1Q22 – domestic market

In 1Q22, we kept on diversifying our global customer base for our oil exports. Búzios remained the main stream in our export basket. Recently added streams, Atapu and Sepia, have increased their relevance in exports. In 4Q21, we traded the first export of the Sépia stream and in 1Q22 new cargoes of this stream were traded and new clients were added to our portfolio.

In 1Q22, we had the following distribution of export destinations:

Table 3 – Volumes of oil exports

Country 1Q22 4Q21 1Q21
China 56% 38% 38%
Europe 14% 14% 28%
Latam 9% 23% 17%
Usa 3% 9% 11%
Caribbean 4% 2% 2%
Asia (Ex China) 14% 16% 4%

 

Table 4 – Volume of oil products exports

Country 1Q22 4Q21 1Q21
Singapore 59% 84% 75%
USA 28% 10% 15%
Virgin Islands 5% 4% 0%
Others 9% 2% 10%

 

Cost of goods sold

Table 5 – Cost of goods sold

        Variation (%)
US$ million 1Q22 4Q21 1Q21

1Q22 /

4Q21

1Q22 /

1Q21

Acquisitions (4,628) (5,562) (2,337) (16.8) 98.0
Crude oil imports (1,684) (1,594) (951) 5.6 77.1
Oil products imports (1,355) (1,862) (663) (27.2) 104.4
Natural gas imports (1,589) (2,106) (723) (24.5) 119.8
Production (7,485) (6,311) (4,976) 18.6 50.4
Crude oil (6,161) (5,287) (3,936) 16.5 56.5
Production taxes (3,173) (2,811) (1,624) 12.9 95.4
Other costs (2,988) (2,476) (2,312) 20.7 29.2
Oil products (624) (544) (596) 14.7 4.7
Natural gas   (700) (480) (444) 45.8 57.7
        Production taxes (232) (177) (121) 31.1 91.7
        Other costs (468) (303) (323) 54.5 44.9
Services, electricity, operations abroad and others (666) (1,579) (378) (57.8) 76.2
Total (12,779) (13,452) (7,691) (5.0) 66.2
           

In 1Q22, cost of goods sold decreased 5% when compared to 4Q21, mainly reflecting lower natural gas and oil products imports. It is worth noting the decline of LNG in the breakdown of natural gas purchases, given the reduction of 14 MMm³/day in regasification volumes, which reached 10 MM m3/day in 1Q22, mainly due to lower demand for gas for thermoelectric plants because of the improvement in hydrological conditions.

5  
 

Production costs increased 19% in 1Q22, mainly due to production growth and higher government take, which followed Brent prices.

Power generation costs fell in 1Q22 compared with 4Q21, due to the reduction in dispatch from the Company's own thermal plants.

Operating expenses

Table 6 – Operating expenses

        Variation (%)
US$ million 1Q22 4Q21 1Q21

1Q22 /

4Q21

1Q22 /

1Q21

Selling, General and Administrative Expenses (1,477) (1,398) (1,221) 5.7 21.0
Selling expenses (1,178) (1,092) (948) 7.9 24.3
Materials, third-party services, freight, rent and other related costs (948) (909) (784) 4.3 20.9
Depreciation, depletion and amortization (200) (162) (149) 23.5 34.2
Allowance for expected credit losses (8) (1) 5 700.0
Employee compensation (22) (20) (20) 10.0 10.0
General and administrative expenses (299) (306) (273) (2.3) 9.5
Employee compensation (198) (197) (185) 0.5 7.0
Materials, third-party services, freight, rent and other related costs (78) (88) (64) (11.4) 21.9
Depreciation, depletion and amortization (23) (21) (24) 9.5 (4.2)
Exploration costs (79) (149) (214) (47.0) (63.1)
Research and Development (206) (148) (117) 39.2 76.1
Other taxes (59) (37) (106) 59.5 (44.3)
Impairment of assets 1 272 (90) (99.6)
Other income and expenses, net (322) 1,203 (284) 13.4
Total (2,142) (257) (2,032) 733.5 5.4

 

In 1Q22, operating expenses were US$ 2.1 billion in comparison with US$ 257 million in 4Q21. This variation was mainly because of the gains of US$ 1.5 billion, in 4Q21, with the sale of the Mataripe Refinery (RLAM) and with the contingent portion of the sale of the Carcará asset (currently the Bacalhau field), partially offset by the gain of US$ 0.3 billion with the sale of the Alagoas Cluster in 1Q22.

Selling and general and administrative expenses remained at a similar level to 4Q21.

In 1Q22, there was a reduction in exploration costs, mainly due to lower expenses with geology and geophysics and with projects without economic viability.

The increase in R&D costs was mainly due to the increase in Brent prices, given that the provision for R&D projects considers a percentage of gross production revenues in certain fields.

In 4Q21, there was an impairment reversal of US$ 0.3 billion, mainly due to the inclusion of the 2nd unit of RNEST in the 2022-26 Strategic Plan, which also contributed to the increase in operating expenses in 1Q22.

 

Adjusted EBITDA

In 1Q22, Adjusted EBITDA rose 33% to US$ 15 billion mainly due to the increase in Brent prices in the period, higher oil exports, higher diesel margins and lower LNG imports, partially offset by lower sales volumes of oil products.

6  
 

Financial results

Table 7 – Financial results

        Variation (%)
US$ million 1Q22 4Q21 1Q21

1Q22 /

4Q21

1Q22 /

1Q21

Finance income 262 266 122 (1.5) 114.8
Income from investments and marketable securities (Government Bonds) 163 141 29 15.6 462.1
Other income, net 99 125 93 (20.8) 6.5
Finance expenses (757) (880) (1,208) (14.0) (37.3)
Interest on finance debt (530) (545) (752) (2.8) (29.5)
Unwinding of discount on lease liabilities (290) (325) (295) (10.8) (1.7)
Discount and premium on repurchase of debt securities (26) (4) (183) 550.0 (85.8)
Capitalized borrowing costs 238 229 212 3.9 12.3
Unwinding of discount on the provision for decommissioning costs (130) (182) (189) (28.6) (31.2)
Other finance expenses and income, net (19) (53) (1) (64.2) 1800.0
Foreign exchange gains (losses) and indexation charges 1,091 (1,870) (4,553)
Foreign exchange gains (losses) 2,421 (781) (3,442)
Reclassification of hedge accounting to the Statement of Income (1,380) (1,246) (1,113) 10.8 24.0
Recoverable taxes inflation indexation income 21 29 13 (27.6) 61.5
Other foreign exchange gains (losses) and indexation charges, net 29 128 (11) (77.3)
Total 596 (2,484) (5,639)

 

The financial result was positive by US$ 596 million in 1Q22, compared to a negative result of US$ 2.5 billion in 4Q21, mainly reflecting the appreciation of the BRL against the USD (appreciation of 15% in 1Q22 against a depreciation of 3% in 4Q21).

We ended 1Q22 with a currency exposure of US$ 17 billion compared to US$ 17.6 billion in 4Q21. It is worth noting that in 1Q21, the currency exposure was US$ 34.8 billion, causing higher volatility in financial results.

Net profit (loss) attributable to Petrobras shareholders

Net income in 1Q22 was US$ 8.6 billion, compared to US$ 5.6 billion in 4Q21. This increase was mainly due to higher Brent prices in the period, coupled with higher margins on diesel, higher oil exports, lower costs with LNG imports, foreign exchange gains due to the appreciation of the BRL against the USD, and gains from equity-accounted investments. On the other hand, in 1Q22 there were lower gains from the disposal of assets (-US$ 1.2 billion) and from the reversal of impairment (-US$ 0.3 billion) compared to 4Q21. With higher pre-tax income, there was a higher income tax and social contribution expense (+ US$ 2.3 billion) in 1Q22 compared with 4Q21.

Recurring net income attributable to Petrobras shareholders and recurring Adjusted EBITDA

In 1Q22, net income was benefited by non-recurring items in the total amount of US$ 0.4 billion. Net income in 1Q22 would have been US$ 8.4 billion without the non-recurring items. Adjusted EBITDA was basically unaffected by non-recurring items.

7  
 

Special items

Table 8 – Special items

        Variation (%)
 US$ million 1Q22 4Q21 1Q21

1Q22 /

4Q21

1Q22 /

1Q21

Net income   8,648 5,676 200 52.4 4224.0
Nonrecurring items 356 2,077 (32) (82.9)
Nonrecurring items that do not affect Adjusted EBITDA 456 1,991 (255) (77.1)
Impairment of assets and investments (8) 272 (124) (93.5)
Reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments (34)
Gains and losses on disposal / write-offs of assets 476 1,718 49 (72.3) 871.4
Results from co-participation agreements in auctioned areas (36)
Agreements signed for the electricity sector 29
Pis and Cofins inflation indexation charges - exclusion of ICMS (VAT tax) from the basis of calculation 1
Discount and premium on repurchase of debt securities (12) 5 (183) (93.4)
Financial updating on state amnesty programs 2 37
Other nonrecurring items (100) 86 223
Voluntary Separation Plan (4) 3 3
Amounts recovered from Lava Jato investigation 12 13 141 (7.7) (91.5)
Gains / (losses) on decommissioning of returned/abandoned areas (24) 109 (6) 300.0
State amnesty programs 1 117
Gains / (losses) related to legal proceedings (112) (64) 75.0
Equalization of expenses - Production Individualization Agreements 28 (41) (43)
Gains/(losses) with the transfer of rights on concession agreements 65 11
Net effect of nonrecurring items on IR / CSLL (123) (707) (12) (82.6) 925.0
Recurring net income 8,415 4,306 244 95.4 3348.8
Shareholders of Petrobras 8,373 4,266 224 96.3 3637.9
Non-controlling interests 42 40 20 5.0 110.0
Adjusted EBITDA 14,961 11,276 8,906 32.7 68.0
Nonrecurring items (100) 86 223
Recurring Adjusted EBITDA 15,061 11,190 8,683 34.6 73.5

 

In management's opinion, the special items presented above, although related to the Company's business, were highlighted as complementary information for a better understanding and evaluation of the result. Such items do not necessarily occur in all periods and are disclosed when relevant.

8  
 

Capex

Investment (Capex) encompasses acquisition of property, plant and equipment, including costs with leasing, intangible assets, investments in subsidiaries and affiliates, costs with geology and geophysics and pre-operating costs.

Table 9 – Capex

        Variation %
US$ million 1Q22 4Q21 1Q21

1Q22 /

4Q21

1Q22 /

1Q21

Exploration and Production 1,374 2,100 1,626 (34.6) (15.5)
Refining, Transportation and Marketing 252 258 193 (2.4) 30.9
Gas and Power 94 161 63 (41.5) 49.4
Others 48 112 32 (57.7) 50.7
Total 1,768 2,631 1,913 (32.8) (7.6)

 

In 1Q22, capex totaled US$ 1.8 billion, out of which more than 53% capex was related to growth.

Growth capex are those with the primary objective of increasing the capacity of existing assets, deploying new production, offloading, and storage assets, increasing asset efficiency or profitability, and deploying essential infrastructure to enable other growth projects. It includes acquisitions of assets/companies and remaining investments in systems that started up as of 2020 and exploratory investments.

Sustaining capex, on the other hand, has the main objective of maintaining the operation of existing assets. It does not aim at increasing the capacity of the facilities. It includes investments in safety and reliability of facilities, replacement well projects, complementary development, remaining investments in systems that started up before 2020, scheduled stoppages and revitalizations (without new systems), 4D seismic, health, environment, and safety (HSE) projects, subsea line exchanges, operational infrastructure and information technology (IT).

In 1Q22, capex in the Exploration & Production segment totaled US$ 1.4 billion, with approximately 61% related to growth. Investments were mainly concentrated on: (i) the development of ultra-deepwater production in the Santos Basin pre-salt (US$ 0.5 billion); (ii) development of new deepwater projects (US$ 0.2 billion); and (iii) exploratory investments in the pre-salt and post-salt (US$ 0.1 billion).

In the Refining, Transportation and Marketing segment, capex totaled US$ 0.3 billion in 1Q22, of which approximately 16% was related to growth. In Gas & Power, capex totaled US$ 0.1 billion in 1Q22, with approximately 64% related to growth.

9  
 

The following table presents the main information about the new oil and gas production systems, already contracted.

Table 10 – Main projects

Unit Start-up FPSO capacity (bbl/day)

CAPEX Petrobras Actual

US$ bn

CAPEX Petrobras Total

US$ bn1

Petrobras Stake Status

Búzios 5

FPSO Alm. Barroso (Chartered unit)

2023 150,000 0.87 2.0 92,66%2 Project in phase of execution with production system under construction. 10 wells drilled and 7 completed.

Marlim 1

FPSO Anita Garibaldi

(Chartered unit)

2023 80,000 0.11 1.7 100% Project in phase of execution with production system under construction. 2 wells drilled and 1 completed4

Marlim 2

FPSO Anna Nery (Chartered unit)

2023 70,000 0.06 1.3 100% Project in phase of execution with production system under construction4

Mero 2

FPSO Sepetiba (Chartered unit)

2023 180,000 0.14 0.8 38,6%3 Project in phase of execution with production system under construction. 9 wells drilled and 2 completed

Itapu

P-71 (Owned unit)

2023 150,000 1.88 3.4 100% Project in phase of execution with production system under construction. 3 wells drilled and 1 completed

Mero 3

FPSO Marechal Duque de Caxias (Chartered unit)

2024 180,000 0.04 0.8 38,6%3 Project in phase of execution with production system under construction. 3 wells drilled and 1 completed

Integrado Parque das Baleias (IPB)

FPSO Maria Quitéria

(Chartered unit)

2024 100,000 0.22 1.7 100% Project in phase of execution with production system under construction. 3 wells drilled and 1 completed4

Búzios 7

FPSO Almirante Tamandaré (Chartered unit)

2024 225,000 0.03 2.1 92,66%2

Project in phase of execution with production system under construction.

2 wells drilled

Búzios 6

P-78 (Owned unit)

2025 180,000 0.21 4.1 92,66%2 Project in phase of execution with production system under construction

Búzios 8

P-79 (Owned unit)

2025 180,000 0.17 4.2 92,66%2 Project in phase of execution with production system under construction. 3 wells drilled and 1 completed

Mero 4

FPSO Alexandre de Gusmão

(Chartered unit)

2025 180,000 0.02 0.8 38,6%3

Project in phase of execution with production system under construction

4 wells drilled and 2 completed

1 Total CAPEX with the Strategic Plan 2022-26 assumptions and Petrobras work interest (WI). Chartered units leases are not included.

2 In March 2022, Petrobras has signed the contract with the partner CNOOC Petroleum Brasil Ltda. (CPBL) for the assignment of 5% of its interest in the Production Sharing Contract of the Transfer of Rights Surplus for the Buzios field. Petrobras stake will be ajusted after the transaction's approval by the regulatory agencies.

3 Petrobras stake updated after the approval of the Production Individualization Agreement (AIP) of the Mero accumulation. As the compensation relative to the non-contracted area expenses will be paid in oil to the consortium, the work interest (WI) of the CAPEX reported will not change.

4 Production Unit for revitalization project. Refers only to new wells. The scope of the project also includes the relocation of some wells of the units being decommissioned.

10  
 

Portfolio management

In 1Q22, cash inflows from divestments totaled US$ 1.8 billion, including US$950 million deferred payment from the sale of the Bacalhau field (formerly Carcará area) in February 2022. From January 1, 2022, to May 05, 2022, we concluded the sale of the Alagoas Cluster and exploratory blocks in Parana Basin. Additionally, we signed the contracts for the sale of the Potiguar Cluster, the Norte Capixaba Cluster, the Albacora East field and Deten Química. Finnaly, it is worth mentioning that in April 2022, we received a deferred payment for the sale of 90% of NTS, in the amount of US$ 1 billion.

Table 11 – Main transactions by May 05th, 2022 and respective transaction amounts (excluding deferred payments)

Assets

Amount received

(US$ million)

Transaction amount1

(US$ million)

Block PAR-T-198_ Paraná Basin 0.031 0.0316
Block PAR-T-218_ Paraná Basin 0.032 0.0326
East Albacora field 293 2,201
Papa-Terra field 6 105.66
Deten Química 6 118²
Gaspetro - 3946
Alagoas cluster 300 3006
Carmópolis cluster 275 1,1006
Fazenda Belém cluster - 355
Norte Capixaba cluster 35.85 544
Peroá cluster 5 556
Pescada cluster - 25
Potiguar cluster 110 1,380
Recôncavo cluster - 2505
REMAN 28.4 189.56
SIX 3 336
Total 1.062 6.707

¹ Amounts agreed in the signing date, subject to adjustments upon closing

² Original amounts in BRL, converted to US$ at the PTAX rate on the day of the SPA signing or of the cash inflow

3Transaction signed in 2018 4Transaction signed in 2019 5Transaction signed in 2020 6Transaction signed in 2021

11  
 

Liquidity and capital resources[1]

Table 12 – Liquidity and capital resources

US$ million 1Q22 4Q21 1Q21
Adjusted cash and cash equivalents at the beginning of period 11,130 11,462 12,384
Government bonds and time deposits with maturities of more than 3 months at the beginning of period * (650) (537) (659)
Cash and cash equivalents at the beginning of period 10,480 10,925 11,725
Net cash provided by operating activities 10,308 9,196 7,244
Net cash provided by (used in) investing activities (988) 557 (1,359)
Acquisition of PP&E and intangibles assets (2,376) (1,685) (1,650)
Investments in investees (9) (9) (2)
Proceeds from disposal of assets - Divestment 1,753 1,877 201
    Financial compensation for the Búzios Co-participation Agreement 61
Dividends received 52 487 67
Divestment (Investment) in marketable securities (469) (113) 25
(=) Net cash provided by operating and investing activities 9,320 9,753 5,885
Net cash used in financing activities (3,150) (9,890) (5,574)
Net financings (1,908) (1,151) (4,088)
     Proceeds from  financing 150 131 54
     Repayments (2,058) (1,282) (4,142)
Repayment of lease liability (1,321) (1,446) (1,467)
Dividends paid to shareholders of Petrobras (7,250)
Dividends paid to non-controlling interest (5) (30)
Investments by non-controlling interest 84 (13) (19)
Effect of exchange rate changes on cash and cash equivalents 582 (308) (72)
Cash and cash equivalents at the end of period 17,232 10,480 11,964
Government bonds and time deposits with maturities of more than 3 months at the end of period * 1,259 650 579
Adjusted cash and cash equivalents at the end of period 18,491 11,130 12,543
Reconciliation of Free Cash Flow      
Net cash provided by operating activities 10,308 9,196 7,244
Acquisition of PP&E and intangibles assets (2,376) (1,685) (1,650)
Free cash flow** 7,932 7,511 5,594

 

As of March 31, 2022, cash and cash equivalents totaled US$ 17.2 billion and adjusted cash and cash equivalents totaled US$ 18.5 billion.

In 1Q22, cash generated from operating activities reached US$ 10.3 billion. The company's operating cash generation was impacted by the partial prepayment of a pension liability - the Pre-70 Term of Financial Commitment (TFC Pre-70) and Pension Difference Term of Financial Commitment (TCF Pension Difference), celebrated with the Fundação Petrobras de Seguridade Social (Petros), in the amount of US$ 1.3 billion.

Positive free cash flow totaled US$ 7.9 billion. This level of cash generation, together with the inflow from divestments of US$ 1.8 billion, were used to: (a) prepay debt and amortize principal and interest due in the period (US$ 2.1 billion), (b) amortize lease liabilities (US$ 1.3 billion), and (c) fund capex of US$ 2.4 billion (including the payment of the signature bonus of Sépia and Atapu, in the amount of US$ 0.8 billion).

In 1Q22, liability management was carried out aiming at improving the debt profile and matching maturities of long-term investments. The company settled several loans and financial debt, in the amount of US$ 2.1 billion, notably the repurchase and redemption of US$ 0.7 billion of securities in the international capital market.

The maintenance of gross debt at the level established in our 2022-26 Strategic Plan, the high level of cash generation, and solid liquidity allowed the company to approve shareholder remuneration in the amount of R$ 3.72 per outstanding common and preferred share.


* Includes short-term government bonds and time deposits and cash and cash equivalents of companies classified as held for sale.

** Free cash flow (FCF) is in accordance with the Shareholder Remuneration Policy, which is the result of the equation: FCF = net cash provided by operating activities less acquisitions of PP&E and intangible assets.

12  
 

Debt

As of March 31, 2022, gross debt reached US$ 58.6 billion, in line with the 4Q21 position, of US$58.7, and 17.5% lower than March 31, 2021, mainly due to debt prepayments and amortizations.

Average maturity shifted from 13.4 years on December 31, 2021, to 13.2 years on March 31, 2022.

The gross debt/EBITDA ratio decreased from 1.35x on December 31, 2021, to 1.18x on March 31, 2022.

Net debt decreased by 15.9% to US$ 40.1 billion. The net debt/Adjusted EBITDA ratio decreased significantly from 1.09x on December 31, 2021, to 0.81x on March 31, 2022.

Table 13 – Debt indicators

US$ million 03.31.2022 12.31.2021 Δ % 03.31.2021
Financial Debt 35,421 35,700 (0.8) 50,317
Capital Markets 21,683 22,031 (1.6) 28,393
Banking Market 9,970 9,762 2.1 17,359
Development banks 878 769 14.2 1,149
Export Credit Agencies 2,708 2,951 (8.2) 3,210
Others 182 187 (2.7) 206
Finance leases 23,133 23,043 0.4 20,649
Gross debt 58,554 58,743 (0.3) 70,966
Adjusted cash and cash equivalents 18,482 11,117 66.2 12,542
Net debt 40,072 47,626 (15.9) 58,424
Net Debt/(Net Debt + Market Cap) - Leverage 30% 41% (26.8) 51%
Average interest rate (% p.a.) 6.2 6.2 6.0
Weighted average maturity of outstanding debt (years) 13.22 13.39 (1.3) 11.84
Net debt/LTM Adjusted EBITDA ratio 0.81 1.09 (25.7) 2.03
Gross debt/LTM Adjusted EBITDA ratio 1.18 1.35 (12.5) 2.47

 

13  
 

Results by segment

Exploration and Production

Table 14 – E&P results

        Variation (%) (*)
US$ million 1Q22 4Q21 1Q21

1Q22 /

4Q21

1Q22 /

1Q21

Sales revenues 19,684 15,781 11,666 24.7 68.7
Gross profit 12,008 9,250 6,432 29.8 86.7
Operating expenses (33) 555 (521) (93.7)
Operating income (loss) 11,975 9,805 5,911 22.1 102.6
Net income (loss) attributable to the shareholders of Petrobras 7,955 6,506 3,925 22.3 102.7
Adjusted EBITDA of the segment 14,024 10,986 8,053 27.7 74.1
EBITDA margin of the segment (%) 71 70 69 1.6 2.2
ROCE (Return on Capital Employed) (%) 14.2 11.2 4.0 3.0 10.2
Average Brent crude (US$/bbl) 101.40 79.73 60.90 27.2 66.5
Internal Transfer Price to RTM - Crude oil (US$/bbl) 93.71 77.56 57.32 20.8 63.5
 Lifting cost - Brazil (US$/boe)          
     excluding production taxes and leases 5.22 5.15 4.91 1.4 6.4
     excluding production taxes 6.97 6.93 6.66 0.6 4.7
        Onshore and shallow waters          
           with leases 16.44 14.78 12.37 11.3 32.9
           excluding leases 16.44 14.78 12.37 11.3 32.9
       Deep and ultra-deep post-salt          
           with leases 11.28 10.50 11.11 7.4 1.5
           excluding leases 9.57 9.10 9.39 5.3 2.0
        Pre-salt          
           with leases 5.13 5.26 4.63 (2.6) 10.7
           excluding leases 3.25 3.24 2.70 0.4 20.5
     including production taxes and excluding leases 24.36 20.19 16.11 20.7 51.2
     including production taxes and leases 26.11 21.96 17.87 18.9 46.1
Production taxes - Brazil 4,068 3,178 2,359 28.0 72.5
     Royalties 2,142 1,669 1,190 28.3 80.0
     Special participation 1,914 1,498 1,160 27.8 65.0
     Retention of areas 12 11 9 0.9 31.5
(*) EBITDA margin and ROCE variations in percentage points          

 

In 1Q22, E&P gross profit was US$ 12.0 billion, an increase of 30% when compared to 4Q21. This increase was due to higher Brent prices and higher production, partially offset by higher government participation. Operating profit was 22% higher than in 4Q21, as a consequence of the higher gross profit.

Lifting cost for 1Q22, without government take and leasing, was US$ 5.22/boe, an increase of 6% when compared to US$ 4.91/boe in 1Q21. The increase is explained by the appreciation of the BRL and higher expenses with integrity, mainly with platforms maintenance (activities that were held off during the COVID-19 pandemic and which could be carried out once the scenario improved. These actions aim to ensure systems reliability). These effects were partially offset by the active management of the portfolio with the divestments in onshore fields and the ramp-up of FPSO Carioca.

In 1Q22, Petrobras recorded a 1% increase in lifting cost, without government take and leasing, when compared to 4Q21, remaining practically stable versus the previous quarter.

In the pre-salt, the lifting cost remained stable compared to 4Q21.

In the post-salt, the increase of 5% in the lifting cost, when compared to 4Q21, was mainly due to the effect of the appreciation of the BRL.

In onshore and shallow water assets, there was an increase in the lifting cost in 1Q22, mainly due to higher expenses with wells intervention, also associated with the effect of the BRL appreciation and some production decline. These effects were partially offset by the divestments in Bahia and Sergipe.

The higher expenses with government take in dollars are explained by higher Brent prices.

14  
 

 

Refining, Transportation and Marketing

 

Table 15 – RTM results **

        Variation (%) (*)
US$ million 1Q22 4Q21 1Q21

1Q22 /

4Q21

1Q22 /

1Q21

Sales revenues 24,685 21,044 13,973 17.3 76.7
Gross profit (loss) 3,138 2,272 2,136 38.1 46.9
Operating expenses (537) 330 (399) 34.6
Operating Income (Loss) 2,601 2,602 1,737 (0.0) 49.7
Net income (loss) attributable to the shareholders of Petrobras 1,987 1,774 1,255 12.0 58.3
Adjusted EBITDA of the segment 3,119 2,238 2,265 39.4 37.7
EBITDA margin of the segment (%) 13 11 16 2.0 (3.6)
ROCE (Return on Capital Employed) (%) 7.4 6.2 0.9 1.2 6.5
Refining cost (US$ / barrel) - Brazil 1.77 1.70 1.61 4.1 9.9
Domestic basic oil by-products price (US$/bbl) 104.62 87.00 63.82 20.3 63.9
(*) EBITDA margin and ROCE variations in percentage points          

 

In 1Q22, gross profit for the Refining, Transportation and Marketing (RTM) segment, was US$ 3.1 billion, US$ 866 million above 4Q21, mainly due to the higher positive effect of inventory turnover between quarters (US$ 2 billion in 1Q22 vs. US$ 1.3 billion in 4Q21). Excluding this effect, gross profit would have been US$ 1.1 billion in 1Q22 and US$ 966 million in 4Q21.

In 1Q22, there was a higher margin of oil products in the domestic market, mainly diesel, due to the increase of international margins. There were lower sales volumes in the domestic market for gasoline, diesel and LPG due to the typical seasonality of these oil products and the conclusion of the sale of the Mataripe Refinery (RLAM), on November 30 , 2021, whose capacity represented approximately 13% of the total capacity of Petrobras Refining facilities.

In 1Q22, the operating result remained stable when compared with 4Q21. The increase in gross profit was offset by the equity gain from the sale of the Mataripe Refinery (RLAM) and by the reversal of impairment related to the 2nd train of RNEST, events that took place in 4Q21.

In 1Q22, the refining cost per barrel in USD was slightly higher than in 4Q21, mainly due to the effect of the appreciation of the BRL in the period, which offset the reduction in costs in reais. There was also an effect of lower throughput in 1Q22, due to the lower number of days in this quarter. With the sale of RLAM, this was the first quarter without the full contribution of this refinery in our refining facilities.

15  
 

Gas and Power

Table 16 – G&P results

        Variation (%) (*)
US$ million 1Q22 4Q21 1Q21

1Q22 /

4Q21

1Q22 /

1Q21

Sales revenues 3,365 3,745 2,208 (10.1) 52.4
Gross profit 480 (91) 876 (45.2)
Operating expenses (889) (688) (746) 29.2 19.2
Operating income (loss) (409) (779) 130 (47.5)
Net income (loss) attributable to the shareholders of Petrobras (267) (539) 104 (50.5)
Adjusted EBITDA of the segment (301) (647) 323 (53.5)
EBITDA margin of the segment (%) (9) (17) 15 8 (23.6)
ROCE (Return on Capital Employed) (%) (5.3) (2.4) 3.4 (2.9) (8.7)
Natural gas sales price - Brazil (US$/bbl) 55.85 53.53 34.04 4.3 64.1
Fixed revenues from power auctions 96 102 101 (6.2) (5.5)
Average price for power generation(US$/MWh) 55.85 83.46 70.89 (33.1) (21.2)
(*) EBITDA margin and ROCE variations in percentage points          

 

 

In 1Q22, in the Gas and Power segment, there was an increase in gross profit (+US$ 572 million) when compared to 4Q21, due to the higher average natural gas sales prices, due to the increase in Brent prices and new sales contracts for the non-thermoelectric segment. Additionally, with the recovery of hydroelectric reservoir levels, there was a reduction in demand for natural gas for thermoelectric generation, which led to a lower volume of regasified LNG and, consequently, to a reduction in the average cost of purchased gas.

Despite the efforts made to rebalance the portfolios and the increase of 47.5% in operational result in 1Q22, we recorded an operating loss of US$ 409 million. The increase in selling expenses, mainly driven by the yearly adjustment of natural gas transport prices, also contributed to this result.

16  
 

Reconciliation of Adjusted EBITDA

EBITDA is an indicator calculated as the net income for the period plus taxes on profit, net financial result, depreciation and amortization. Petrobras announces EBITDA, as authorized by CVM Instruction 527 of October 2012.

In order to reflect the management view regarding the formation of the company's current business results, EBITDA is also presented adjusted (Adjusted EBITDA) as a result of: results in equity-accounted investments; impairment, reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments, results with co-participation agreement in production fields and gains/losses on disposal/write-offs of assets.

Adjusted EBITDA, reflecting the sum of the last twelve months (Last Twelve Months), also represents an alternative to the company's operating cash generation. This measure is used to calculate the Gross Debt and Net Debt to Adjusted EBITDA metric, helping to evaluate the company's leverage and liquidity.

EBITDA and adjusted EBITDA are not provided for in International Financial Reporting Standards (IFRS) and should not serve as a basis for comparison with those disclosed by other companies and should not be considered as a substitute for any other measure calculated in accordance with IFRS. These measures should be considered in conjunction with other measures and indicators for a better understanding of the company's performance and financial condition.

Table 17 - Reconciliation of Adjusted EBITDA

        Variation (%) (*)
US$ million 1Q22 4Q21 1Q21

1Q22 /

4Q21

1Q22 /

1Q21

Net income (loss) 8,648 5,676 200 52.4 4224.0
Net finance income (expense) (596) 2,484 5,639
Income taxes 4,566 2,269 319 101.2 1331.3
Depreciation, depletion and amortization 3,170 2,909 2,856 9.0 11.0
EBITDA 15,788 13,338 9,014 18.4 75.1
Results in equity-accounted investments (350) (107) (183) 227.1 91.3
Impairment (1) (272) 90 (99.6)
Reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments 34
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control (476) (1,719) (49) (72.3) 871.4
Results from co-participation agreements in bid areas 36
Adjusted EBITDA 14,961 11,276 8,906 32.7 68.0
Adjusted EBITDA margin (%) 55 47 57 8.0 (2.0)
(*) EBITDA Margin variations in percentage points          

 

17  
 

Financial statements

Table 18 - Income statement - Consolidated

US$ million 1Q22 4Q21 1Q21
Sales revenues 27,189 24,031 15,698
Cost of sales (12,779) (13,452) (7,691)
Gross profit 14,410 10,579 8,007
Selling expenses (1,178) (1,092) (948)
General and administrative expenses (299) (306) (273)
Exploration costs (79) (149) (214)
Research and development expenses (206) (148) (117)
Other taxes (59) (37) (106)
Impairment of assets 1 272 (90)
Other income and expenses (322) 1,203 (284)
  (2,142) (257) (2,032)
Operating income 12,268 10,322 5,975
Finance income 262 266 122
Finance expenses (757) (880) (1,208)
Foreign exchange gains (losses) and inflation indexation charges 1,091 (1,870) (4,553)
Net finance income (expense) 596 (2,484) (5,639)
Results in equity-accounted investments 350 107 183
Income before income taxes 13,214 7,945 519
Income taxes (4,566) (2,269) (319)
Net Income 8,648 5,676 200
Net income attributable to:      
     Shareholders of Petrobras 8,605 5,636 180
     Non-controlling interests 43 40 20
       
18  
 

Table 19 - Statement of financial position – Consolidated

ASSETS - US$ million 03.31.2022 12.31.2021
Current assets 42,111 30,149
Cash and cash equivalents 17,223 10,467
Marketable securities 1,259 650
Trade and other receivables, net 5,667 6,368
Inventories 10,205 7,255
Recoverable taxes 1,303 1,346
Assets classified as held for sale 4,413 2,490
Other current assets 2,041 1,573
     
Non-current assets 168,675 144,199
Long-term receivables 18,053 14,334
Trade and other receivables, net 1,961 1,900
Marketable securities 54 44
Judicial deposits 10,047 8,038
Deferred taxes 625 604
Other tax assets 3,915 3,261
Other non-current assets 1,451 487
Investments 2,026 1,510
Property, plant and equipment 145,015 125,330
Intangible assets 3,581 3,025
Total assets 210,786 174,348
     
     
LIABILITIES - US$ million 03.31.2022 12.31.2021
Current liabilities 27,486 24,176
Trade payables 5,916 5,483
Finance debt 3,790 3,641
Lease liability 5,353 5,432
Taxes payable 5,819 4,734
Short-term employee benefits 2,413 2,144
Liabilities related to assets classified as held for sale 1,555 867
Other current liabilities 2,640 1,875
Non-current liabilities 91,048 80,360
Finance debt 31,631 32,059
Lease liability 17,780 17,611
Income taxes payable 347 300
Deferred taxes 9,115 1,229
Employee benefits 9,696 9,374
Provision for legal and administrative proceedings 2,555 2,018
Provision for decommissioning costs 17,674 15,619
Other non-current liabilities 2,250 2,150
Shareholders' equity 92,252 69,812
Share capital  (net of share issuance costs)  107,101 107,101
Profit reserves and others (15,455) (37,694)
Non-controlling interests 606 405
Total liabilities and shareholders´ equity 210,786 174,348
19  
 

Table 20 - Statement of cash flows – Consolidated

US$ million 1Q22 4Q21 1Q21
Cash flows from Operating activities      
Net income for the period 8,648 5,676 200
Adjustments for:      
Pension and medical benefits (actuarial expense) 307 292 315
Results of equity-accounted investments (350) (107) (183)
Depreciation, depletion and amortization 3,170 2,909 2,856
Impairment of assets (reversal) (1) (272) 90
Inventory write-down (write-back) to net realizable value (7) 2 (1)
Allowance (reversals) for credit loss on trade and other receivables 21 (16) (15)
Exploratory expenditure write-offs 23 34 131
Disposal/write-offs of assets, remeasurement of investment retained with loss of control and reclassification of CTA (476) (1,718) (15)
Foreign exchange, indexation and finance charges   (489) 2,563 5,544
Deferred income taxes, net 1,961 60 200
Revision and unwinding of discount on the provision for decommissioning costs 154 74 194
Results from co-participation agreements in bid areas 36
Assumption of interest in concessions (66)
Early termination and cash outflows revision of lease agreements (225) (197) (70)
Decrease (Increase) in assets      
Trade and other receivables, net 641 (588) (128)
Inventories (1,917) (170) (1,973)
Judicial deposits (375) (264) (151)
Other assets (27) (167) 51
Increase (Decrease) in liabilities      
Trade payables (138) 223 616
Other taxes payable 2,835 2,565 1,105
    Income taxes paid (1,575) (1,192) (128)
Pension and medical benefits (1,477) (184) (976)
Provisions for legal proceedings 184 (135) (205)
Short-term benefits (150) (173) (91)
Provision for decommissioning costs (132) (204) (163)
Other liabilities (297) 215 41
Net cash provided by operating activities 10,308 9,196 7,244
Cash flows from Investing activities      
Acquisition of PP&E and intangible assets (2,376) (1,685) (1,650)
Investments in investees (9) (9) (2)
Proceeds from disposal of assets - Divestment 1,753 1,877 201
Financial compensation for the Búzios Co-participation Agreement 61
Divestment (Investment) in marketable securities (469) (113) 25
Dividends received 52 487 67
Net cash provided (used) by investing activities (988) 557 (1,359)
Cash flows from Financing activities      
Changes in non-controlling interest 84 (13) (19)
Financing and loans, net:      
Proceeds from financing 150 131 54
Repayment of principal - finance debt (1,491) (923) (3,063)
Repayment of interest - finance debt (567) (359) (1,079)
Repayment of lease liability (1,321) (1,446) (1,467)
Dividends paid to Shareholders of Petrobras (7,250)
Dividends paid to non-controlling interests (5) (30)
Net cash provided (used) by financing activities (3,150) (9,890) (5,574)
Effect of exchange rate changes on cash and cash equivalents 582 (308) (72)
Net increase (decrease) in cash and cash equivalents 6,752 (445) 239
Cash and cash equivalents at the beginning of the period 10,480 10,925 11,725
Cash and cash equivalents at the end of the period 17,232 10,480 11,964
20  
 

Financial information by business areas

Table 21 - Consolidated income by segment – 1Q22

US$ million E&P RTM GAS & POWER CORP. AND OTHERS ELIMIN. TOTAL
Sales revenues 19,684 24,685 3,365 126 (20,671) 27,189
Intersegments 19,374 433 861 3 (20,671)
Third parties 310 24,252 2,504 123 27,189
Cost of sales (7,676) (21,547) (2,885) (125) 19,454 (12,779)
Gross profit 12,008 3,138 480 1 (1,217) 14,410
Expenses (33) (537) (889) (679) (4) (2,142)
Selling expenses (2) (408) (761) (3) (4) (1,178)
General and administrative expenses (12) (37) (16) (234) (299)
Exploration costs (79) (79)
Research and development expenses (173) (3) (3) (27) (206)
Other taxes (15) (7) (10) (27) (59)
Impairment of assets 1 1 (1) 1
Other income and expenses 247 (82) (100) (387) (322)
Operating income (loss) 11,975 2,601 (409) (678) (1,221) 12,268
Net finance income (expense) 596 596
Results in equity-accounted investments 51 271 29 (1) 350
Income (loss) before income taxes 12,026 2,872 (380) (83) (1,221) 13,214
Income taxes (4,072) (885) 139 (164) 416 (4,566)
Net Income (Loss) 7,954 1,987 (241) (247) (805) 8,648
Net income (loss) attributable to:            
   Shareholders of Petrobras 7,955 1,987 (267) (265) (805) 8,605
   Non-controlling interests (1) 26 18 43

 

Table 22 - Consolidated income by segment – 1Q21

US$ million E&P RTM GAS & POWER CORP. AND OTHERS ELIMIN. TOTAL
Sales revenues 11,666 13,973 2,208 155 (12,304) 15,698
Intersegments 11,453 235 552 64 (12,304)
Third parties 213 13,738 1,656 91 15,698
Cost of sales (5,234) (11,837) (1,332) (150) 10,862 (7,691)
Gross profit 6,432 2,136 876 5 (1,442) 8,007
Expenses (521) (399) (746) (360) (6) (2,032)
Selling expenses (335) (603) (4) (6) (948)
General and administrative expenses (32) (32) (17) (192) (273)
Exploration costs (214) (214)
Research and development expenses (85) (3) (5) (24) (117)
Other taxes (17) (40) (23) (26) (106)
Impairment of assets (95) 5 (90)
Other income and expenses (78) 11 (98) (119) (284)
Operating income (loss) 5,911 1,737 130 (355) (1,448) 5,975
Net finance income (expense) (5,639) (5,639)
Results in equity-accounted investments 23 108 40 12 183
Income (loss) before income taxes 5,934 1,845 170 (5,982) (1,448) 519
Income taxes (2,010) (590) (45) 1,833 493 (319)
Net Income (Loss) 3,924 1,255 125 (4,149) (955) 200
Net income (loss) attributable to:            
    Shareholders of Petrobras 3,925 1,255 104 (4,149) (955) 180
    Non-controlling interests (1) 21 20

 

21  
 

 

Table 23 - Quarterly consolidated income by segment – 4Q21

US$ million E&P RTM GAS & POWER CORP. AND OTHERS ELIMIN. TOTAL
Sales revenues 15,781 21,044 3,745 144 (16,683) 24,031
Intersegments 15,466 405 732 80 (16,683)
Third parties 315 20,639 3,013 64 24,031
Cost of sales (6,531) (18,772) (3,836) (148) 15,835 (13,452)
Gross profit 9,250 2,272 (91) (4) (848) 10,579
Expenses 555 330 (688) (450) (4) (257)
Selling expenses (389) (698) (1) (4) (1,092)
General and administrative expenses (41) (40) (21) (204) (306)
Exploration costs (149) (149)
Research and development expenses (111) (3) (6) (28) (148)
Other taxes (74) (22) 61 (2) (37)
Impairment of assets 8 302 (39) 1 272
Other income and expenses 922 482 15 (216) 1,203
Operating income (loss) 9,805 2,602 (779) (454) (852) 10,322
Net finance income (expense) (2,484) (2,484)
Results in equity-accounted investments 34 56 13 4 107
Income (loss) before income taxes 9,839 2,658 (766) (2,934) (852) 7,945
Income taxes (3,333) (885) 265 1,393 291 (2,269)
Net income (loss) 6,506 1,773 (501) (1,541) (561) 5,676
Net income (loss) attributable to:            
   Shareholders of Petrobras 6,506 1,774 (539) (1,544) (561) 5,636
   Non-controlling interests (1) 38 3 40

 

22  
 

Table 24 - Other income and expenses by segment – 1Q22

US$ million E&P RTM GAS & POWER CORP. AND OTHERS ELIMIN. TOTAL
Unscheduled stoppages and pre-operating expenses (358) (4) (7) (7) (376)
Losses with legal, administrative and arbitration proceedings (62) (68) (55) (74) (259)
Pension and medical benefits - retirees (238) (238)
Performance award program (48) (24) (6) (40) (118)
Losses with Commodities Derivatives (53) (53)
Profit sharing (12) (8) (2) (9) (31)
Losses on decommissioning of returned/abandoned areas (24) (24)
Reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments
Amounts recovered from Lava Jato investigation (*) 12 12
Recovery of taxes (**) 1 16 17
Equalization of expenses - Production Individualization Agreements 28 28
Expenses/Reimbursements from E&P partnership operations 27 27
Fines imposed on suppliers 47 9 9 3 68
Early termination and changes to cash flow estimates of leases 202 20 3 225
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control 420 54 (1) 3 476
Others 27 (62) (41) (76)
  247 (82) (100) (387) (322)
(*) The total amount recovered from Lava Jato Investigation through December 31, 2021 was US$ 1,522, recognized through collaboration and leniency agreements entered into with individuals and legal entities.
(**) It Includes the effects of the exclusion of ICMS (VAT tax) from the basis of calculation of sales taxes PIS and COFINS, except for the effects of inflation indexation.

Table 25 - Other income and expenses by segment – 1Q21

US$ million E&P RTM GAS & POWER CORP. AND OTHERS ELIMIN. TOTAL
Unscheduled stoppages and pre-operating expenses (291) (2) (6) (1) (300)
Gains/ (losses) with legal, administrative and arbitration proceedings (43) 40 54 51
Pension and medical benefits - retirees (218) (218)
Performance award program (37) (22) (3) (32) (94)
Losses with Commodities Derivatives (23) (23)
Profit sharing (11) (7) (1) (9) (28)
Losses on decommissioning of returned/abandoned areas (6) (6)
Reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments (33) (33)
Amounts recovered from Lava Jato investigation (*) 141 141
Recovery of taxes (**) 3 19 22
Equalization of expenses - Production Individualization Agreements (43) (43)
Expenses/Reimbursements from E&P partnership operations 100 100
Fines imposed on suppliers 24 2 2 1 29
Early termination and changes to cash flow estimates of leases 72 (4) 2 (1) 69
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control 123 11 (86) 48
Others 34 (10) (6) (17) 1
  (78) 11 (98) (119) (284)
(*) The total amount recovered from Lava Jato Investigation through December 31, 2021 was US$ 1,522, recognized through collaboration and leniency agreements entered into with individuals and legal entities.
(**) It Includes the effects of the exclusion of ICMS (VAT tax) from the basis of calculation of sales taxes PIS and COFINS, except for the effects of inflation indexation.

 

23  
 

Table 26 - Other income and expenses by segment – 4Q21

US$ million E&P RTM GAS & POWER CORP. AND OTHERS ELIMIN. TOTAL
Unscheduled stoppages and pre-operating expenses (342) (8) (7) (12) (369)
Gains (losses) with legal, administrative and arbitration proceedings (145) (66) (2) 18 (195)
Pension and medical benefits - retirees (212) (212)
Performance award program (50) (27) (6) (39) (122)
Losses with Commodities Derivatives (23) (23)
Profit sharing (14) (9) (1) (8) (32)
Gains on decommissioning of returned/abandoned areas 109 109
Reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments
Amounts recovered from Lava Jato investigation (*) 9 4 13
Recovery of taxes (**) 1 17 18
Equalization of expenses - Production Individualization Agreements (41) (41)
Expenses/Reimbursements from E&P partnership operations 60 60
Fines imposed on suppliers 31 6 2 39
Early termination and changes to cash flow estimates of leases 167 21 1 9 198
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control 1,162 589 11 (43) 1,719
Others (24) (25) 17 73 41
  922 482 15 (216) 1,203
(*) The total amount recovered from Lava Jato Investigation through December 31, 2021 was US$ 1,522, recognized through collaboration and leniency agreements entered into with individuals and legal entities.
(**) It Includes the effects of the exclusion of ICMS (VAT tax) from the basis of calculation of sales taxes PIS and COFINS, except for the effects of inflation indexation.

 

24  
 

Table 27 - Consolidated assets by segment – 03.31.2022

US$ million E&P RTM GAS & POWER CORP. AND OTHERS ELIMIN. TOTAL
Total assets 132,378 43,348 12,273 30,774 (7,987) 210,786
             
Current assets 7,514 17,431 3,910 21,243 (7,987) 42,111
Non-current assets 124,864 25,917 8,363 9,531 168,675
Long-term receivables 7,025 2,942 673 7,413 18,053
Investments 403 1,455 140 28 2,026
Property, plant and equipment 114,316 21,406 7,468 1,825 145,015
Operating assets 100,865 18,421 5,322 1,501 126,109
Assets under construction 13,451 2,985 2,146 324 18,906
Intangible assets 3,120 114 82 265 3,581

 

Table 28 - Consolidated assets by segment – 12.31.2021

US$ million E&P RTM GAS & POWER CORP. AND OTHERS ELIMIN. TOTAL
Total assets 113,146 34,388 10,589 21,898 (5,673) 174,348
             
Current assets 6,034 12,691 3,838 13,259 (5,673) 30,149
Non-current assets 107,112 21,697 6,751 8,639 144,199
Long-term receivables 5,042 2,212 322 6,758 14,334
Investments 393 970 119 28 1,510
Property, plant and equipment 99,033 18,419 6,241 1,637 125,330
Operating assets 87,210 16,086 3,739 1,373 108,408
Assets under construction 11,823 2,333 2,502 264 16,922
Intangible assets 2,644 96 69 216 3,025
25  
 

Table 29 - Reconciliation of Adjusted EBITDA by segment – 1T22

US$ million E&P RTM GAS & POWER CORP. AND OTHERS ELIMIN. TOTAL
Net income (loss) 7,954 1,987 (241) (247) (805) 8,648
Net finance income (expense) (596) (596)
Income taxes 4,072 885 (139) 164 (416) 4,566
Depreciation, depletion and amortization 2,470 572 108 20 3,170
EBITDA 14,496 3,444 (272) (659) (1,221) 15,788
Results in equity-accounted investments (51) (271) (29) 1 (350)
Impairment (1) (1) 1 (1)
Reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control (420) (54) 1 (3) (476)
Results from co-participation agreements in bid areas
Adjusted EBITDA 14,024 3,119 (301) (660) (1,221) 14,961

 

Table 30 - Reconciliation of Adjusted EBITDA by segment – 1T21

US$ million E&P RTM GAS & POWER CORP. AND OTHERS ELIMIN. TOTAL
Net income (loss) 3,924 1,255 125 (4,149) (955) 200
Net finance income (expense) 5,639 5,639
Income taxes 2,010 590 45 (1,833) (493) 319
Depreciation, depletion and amortization 2,170 540 106 40 2,856
EBITDA 8,104 2,385 276 (303) (1,448) 9,014
Results in equity-accounted investments (23) (108) (40) (12) (183)
Impairment 95 (5) 90
Reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments 34 34
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control (123) (12) 87 (1) (49)
Results from co-participation agreements in bid areas
Adjusted EBITDA 8,053 2,265 323 (287) (1,448) 8,906

 

Table 31 - Reconciliation of Adjusted EBITDA by segment – 4Q21

US$ million E&P RTM GAS & POWER CORP. AND OTHERS ELIMIN. TOTAL
Net income (loss) 6,506 1,773 (501) (1,541) (561) 5,676
Net finance income (expense) 2,484 2,484
Income taxes 3,333 885 (265) (1,393) (291) 2,269
Depreciation, depletion and amortization 2,315 527 104 (37) 2,909
EBITDA 12,154 3,185 (662) (487) (852) 13,338
Results in equity-accounted investments (34) (56) (13) (4) (107)
Impairment (8) (302) 39 (1) (272)
Reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control (1,162) (589) (11) 43 (1,719)
Results from co-participation agreements in bid areas 36 36
Adjusted EBITDA 10,986 2,238 (647) (449) (852) 11,276

 

26  
 

 

Glossary

ACL - Ambiente de Contratação Livre (Free contracting market) in the electricity system.

ACR - Ambiente de Contratação Regulada (Regulated contracting market) in the electricity system.

Adjusted cash and cash equivalents - Sum of cash and cash equivalents, government bonds and time deposits from highly rated financial institutions abroad with maturities of more than 3 months from the date of acquisition, considering the expected realization of those financial investments in the short-term. This measure is not defined under the International Financial Reporting Standards – IFRS and should not be considered in isolation or as a substitute for cash and cash equivalents computed in accordance with IFRS. It may not be comparable to adjusted cash and cash equivalents of other companies, however management believes that it is an appropriate supplemental measure to assess our liquidity and supports leverage management.

Adjusted EBITDA – EBITDA plus results in equity-accounted investments; impairment, reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments, results with co-participation agreement in production fields and gains/losses on disposal/write-offs of assets. Adjusted EBITDA is not a measure defined by IFRS and it is possible that it may not be comparable to similar measures reported by other companies, however management believes that it is an appropriate supplemental measure to assess our profitability. Adjusted EBITDA shall be considered in conjunction with other metrics for a better understanding on our performance.

Adjusted EBITDA margin - Adjusted EBITDA divided by sales revenues.

Basic and diluted earnings (losses) per share - Calculated based on the weighted average number of shares.

Consolidated Structured Entities – Entities that have been designated so that voting rights or the like are not the determining factor in deciding who controls the entity. Petrobras has no equity interest in certain structured entities that are consolidated in the Company's financial statements, but control is determined by the power it has over its relevant operating activities. As there is no equity interest, the income from certain consolidated structured entities is attributable to non-controlling shareholders in the income statement, and disregarding the profit or loss attributable to Petrobras shareholders.

CTA – Cumulative translation adjustment – The cumulative amount of exchange variation arising on translation of foreign operations that is recognized in Shareholders’ Equity and will be transferred to profit or loss on the disposal of the investment.

Effect of average cost in the Cost of Sales – In view of the average inventory term of 60 days, the crude oil and oil products international prices movement, as well as foreign exchange effect over imports, production taxes and other factors that impact costs, do not entirely influence the cost of sales in the current period, having their total effects only in the following period.

Free cash flow - Net cash provided by operating activities less acquisition of PP&E and intangibles assets (except for signature bonus) and investments in investees. Free cash flow is not defined under the IFRS and should not be considered in isolation or as a substitute for cash and cash equivalents calculated in accordance with IFRS. It may not be comparable to free cash flow of other companies, however management believes that it is an appropriate supplemental measure to assess our liquidity and supports leverage management.

Investments – Capital expenditures based on the cost assumptions and financial methodology adopted in our Business and Management Plan, which include acquisition of PP&E, including expenses with leasing, intangibles assets, investment in investees and other items that do not necessarily qualify as cash flows used in investing activities, primarily geological and geophysical expenses, pre-operating charges, purchase

 

 

of property, plant and equipment on credit and borrowing costs directly attributable to works in progress.

Leverage – Ratio between the Net Debt and the sum of Net Debt and Shareholders’ Equity. Leverage is not a measure defined in the IFRS and it is possible that it may not be comparable to similar measures reported by other companies, however management believes that it is an appropriate supplemental measure to assess our liquidity.

Lifting Cost - Crude oil and natural gas lifting cost indicator, which considers expenditures occurred in the period.

LTM Adjusted EBITDA - Sum of the last 12 months (Last Twelve Months) of Adjusted EBITDA. This metric is not foreseen in the international accounting standards - IFRS and it is possible that it is not comparable with similar indexes reported by other companies, however Management believes that it is supplementary information to assess liquidity and helps manage leverage. Adjusted EBITDA should be considered in conjunction with other metrics to better understand the Company's liquidity.

OCF - Net Cash provided by (used in) operating activities (operating cash flow)

Net Debt – Gross debt less adjusted cash and cash equivalents. Net debt is not a measure defined in the IFRS and should not be considered in isolation or as a substitute for total long-term debt calculated in accordance with IFRS. Our calculation of net debt may not be comparable to the calculation of net debt by other companies, however our management believes that net debt is an appropriate supplemental measure that helps investors assess our liquidity and supports leverage management.

Net Income by Business Segment - The information by the company's business segment is prepared based on available financial information that is directly attributable to the segment or that can be allocated on a reasonable basis, being presented by business activities used by the Executive Board to make resource allocation decisions. and performance evaluation. When calculating segmented results, transactions with third parties, including jointly controlled and associated companies, and transfers between business segments are considered. Transactions between business segments are valued at internal transfer prices calculated based on methodologies that take into account market parameters, and these transactions are eliminated, outside the business segments, for the purpose of reconciling the segmented information with the consolidated financial statements of the company. company.

PLD (differences settlement price) - Electricity price in the spot market. Weekly weighed prices per output level (light, medium and heavy), number of hours and related market capacity.

Refining - includes crude oil refining, logistics, transportation, acquisition and export activities, as well as the purchase and sale of petroleum and ethanol products in Brazil and abroad. Additionally, this segment includes the petrochemical area, which includes investments in companies in the petrochemical sector, shale exploration and processing.

ROCE - operating profit after taxes / average capital employed, both measured in US$ on a LTM basis

Operating profit after taxes: Adjusted EBITDA, minus DD&A of assets booked at historical exchange rates and 34% income tax rate.

Average capital employed: quarterly average considering inventories, intangibles and fixed assets at historical exchange rates.

Sales Price of Petroleum in Brazil - Average internal transfer prices from the E&P segment to the Refining segment.

Total net liabilities - Total liability less adjusted cash and cash equivalents.

 

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: May 5, 2022

 

PETRÓLEO BRASILEIRO S.A–PETROBRAS

By: /s/ Rodrigo Araujo Alves

______________________________

Rodrigo Araujo Alves

Chief Financial Officer and Investor Relations Officer

 

 

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