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 November, 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)

 

Avenida 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 3Q22

Rio de Janeiro, November 03, 2022

Message from the CFO

Dear shareholders and investors,

Once again, I am pleased to share with you the excellent results achieved by Petrobras in the third quarter of 2022. The numbers make clear the value that a company can generate for society and shareholders by making the right choices.

Guided by this commitment, we advanced significantly in the procurement of critical facilities to enable the sustained and profitable growth in oil and gas production, focused on the pre-salt. We signed contracts for three new FPSOs (P-80, P-82 and P-83) for the Búzios field, the largest in our portfolio and which will account for about 1/3 of our production in 2026. As a result, only one of the fifteen platforms included in our 2022-2026 Strategic Plan remains to be contracted.

The relevance of these contracts is demonstrated by the fact that, in the absence of this additional capacity, we would not be able to exploit our reserves efficiently and profitably, forsaking the economic benefits. Therefore, we are increasing the levels of confidence in achieving the goals of our plan, which is even more important in a scenario of rising costs and challenges in global supply chains.

From the financial point of view, we brought our cash position to a level more compatible with the financial needs of the company, considering that besides cash balances of US$ 6.8 billion, we have access to revolving credit facilities, resulting in additional liquidity to the company should stress scenarios eventually materialize. We managed to keep the company's capital structure at extremely healthy levels. It is worth highlighting the issuance of R$ 3 billion in commercial notes in September, and the signing of a credit line with sustainability commitments in July, in the amount of US$ 1.25 billion. The relevance of ESG in our business decisions is also reflected in the approval of the first thirteen projects amounting to US$ 76 million to be incorporated in the decarbonization fund. We estimate that these projects can mitigate 1.05 million tCO2e per year. The decarbonization fund was created in the 2022-26 Strategic Plan, with US$ 248 million allocated to develop solutions, studies and implementation of projects to mitigate our carbon emissions.

Our operational cash generation alongside low debt level and solid liquidity perspectives allowed us to return to society and shareholders dividends of R$ 3.35 per common and preferred share in the third quarter of 2022, totaling R$ 13.80 per common and preferred share in 2022. It is important to highlight that Brazilian society receives about 37% of this total, the largest single portion, in addition to benefiting from tax payments, amounting to R$ 73 billion in the third quarter and reaching the record for the first nine months of the year of R$ 222 billion, an amount already surpassing the total collected in 2021 (R$ 203 billion). It is worth noting that our shares went up 1,436%[1] relative to its lowest level in the previous decade, Additionally, R$ 20.91 in shareholder remuneration was declared or paid out in this time span, including the amount approved in 3Q22. In this period, The Federal Government2 received R$ 113.8 billion in cumulative dividends. The fact that on October 21, 2022 Petrobras reached a record market value in reais of R$ 521 billion - reflecting the Company's strategic choices and management - should also not be underestimated since it results in higher wealth for society. We cannot fail to emphasize that our operating cash flow is directly related to management efficiency, our strategic decisions and our exposure and alignment to Brent prices. In a business characterized by long-term projects, that require relevant capital expenditures and investments in state-of-the-art technologies, and that depend on highly trained and motivated professionals, it is impossible to be successful if we deviate from the rationality of market prices. Moreover, it is worth remembering that not only our production taxes are referenced to international prices: our expenditures and investments also correlate to them to the extent that our industry’s inflation reflects pricing contexts and our exploratory risk – a key element in deepwater and ultra-deepwater exploration - is also quantified premised on market prices.

 


[1] PETR4 on 01/26/16 (R$ 2.12, closing price) up to 10/28/22 (R$ 32.57, closing price)

2 Control group includes the Federal Government, BNDES, BNDESPar, Caixa Econômica Federal, and Fundo de Participação Social (FPS).

 

2  
 

 

Additional to these considerations is the fact that, obviously, we must respect the existing legal framework, represented by laws such as the corporate act, the state-owned company act and the oil law, besides the Company's governance - recently strengthened on the matter of pricing policy, through the formalization of pricing guidelines by our BoD, which establishes a set of criteria and procedures for the approval of capital expenditures, with personal liabilities to the executives involved in the decisions.

Furthermore, Petrobras is not alone in the fuel market: nowadays we have in Brazil a dynamic that encompasses private refining capacity and importers that are necessary to meet oil products demand, which exceeds Brazilian production capacity. Without market prices, there is a risk of shortage of products, with obvious negative consequences for society as a whole.

Finally, it is also worth considering another aspect of our strategy that generates social benefits. Petrobras continuously manages its portfolio of assets, holding only to the most accretive to the Company. The ones eventually divested foster a positive economic dynamic not only by diversifying market agents but also because the buyers increase investments, jobs generation and income for society.

I conclude by reiterating our deep conviction that we are building a Petrobras which is more solid, more resilient and healthier and is able to invest, generate jobs, pay taxes, and return value to society and its shareholders.

Rodrigo Araujo Alves

Main achievements:

  • Recurring EBITDA of US$ 17.6 billion and free cash flow of US$ 10.1 billion.
  • Recurring net income of US$ 8.8 billion.
  • Value creation and distribution to society and shareholders:
  • R$ 73 billion in tax collections and government take in 3Q22.
  • By the end of 3Q22, R$ 10.45/share in remuneration to shareholders relative to 2022.
  • Optimization of our cash position, which reached US$ 6.8 billion.
  • Growth in ROCE, reaching 15% in 3Q22.
  • Gross debt under control at US$ 54.3 billion.
  • Largest issuance of Commercial Notes ever carried out in Brazil, successfully opening a new alternative for domestic funding for Petrobras, in the total amount of R$ 3.0 billion.

 

 

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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 3Q22 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).

 

Main items *

Table 1 – Main items

            Variation (%)
 US$ million 3Q22 2Q22 3Q21 9M22 9M21

3Q22 /

2Q22

3Q22 /

3Q21

9M22 /

9M21

Sales revenues 32,411 34,703 23,255 94,303 59,935 (6.6) 39.4 57.3
Gross profit 16,536 19,463 11,392 50,409 30,223 (15.0) 45.2 66.8
Operating expenses (2,366) 94 1,000 (4,414) (2,961) 49.1
Consolidated net income (loss) attributable to the shareholders of Petrobras 8,763 11,010 5,938 28,378 14,239 (20.4) 47.6 99.3
Recurring consolidated net income (loss) attributable to the shareholders of Petrobras * 8,803 9,101 3,332 26,277 11,273 (3.3) 164.2 133.1
Net cash provided by operating activities 12,064 14,496 10,528 36,869 28,595 (16.8) 14.6 28.9
Free cash flow 10,117 12,799 9,023 30,849 23,955 (21.0) 12.1 28.8
Adjusted EBITDA 17,410 19,943 11,623 52,314 32,279 (12.7) 49.8 62.1
Recurring adjusted EBITDA * 17,570 20,159 12,212 52,790 32,288 (12.8) 43.9 63.5
Gross debt (US$ million) 54,268 53,577 59,588 54,268 59,588 1.3 (8.9) (8.9)
Net debt (US$ million) 47,483 34,435 48,132 47,483 48,132 37.9 (1.3) (1.3)
Net debt/LTM Adjusted EBITDA ratio 0.75 0.60 1.17 0.75 1.17 25.0 (35.9) (35.9)
Average commercial selling rate for U.S. dollar 5.25 4.92 5.23 5.13 5.33 6.7 0.4 (3.8)
Brent crude (US$/bbl) 100.85 113.78 73.47 105.35 67.73 (11.4) 37.3 55.5
Domestic basic oil by-products price (US$/bbl) 131.99 135.20 80.70 124.23 74.05 (2.4) 63.6 67.8
TRI (total recordable injuries per million men-hour frequency rate) - - - 0.58 0.56 - - 3.6
ROCE (Return on Capital Employed) 15.0% 12.8% 7.0% 15.0% 7.0% 2.2 p.p. 8 p.p. 8 p.p.

 


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

 

4  
 

 

Consolidated results

 

Net revenues

Table 2 – Net revenues by products

            Variation (%)
US$ million 3Q22 2Q22 3Q21 9M22 9M21

3Q22 /

2Q22

3Q22 /

3Q21

9M22 /

9M21

Diesel 11,685 10,681 6,833 29,849 17,480 9.4 71.0 70.8
Gasoline 4,109 4,309 3,383 12,143 8,148 (4.6) 21.5 49.0
Liquefied petroleum gas (LPG) 1,355 1,437 1,291 3,978 3,327 (5.7) 5.0 19.6
Jet fuel 1,534 1,400 629 3,925 1,456 9.6 143.9 169.6
Naphtha 629 724 526 1,964 1,219 (13.1) 19.6 61.1
Fuel oil (including bunker fuel) 381 352 545 1,099 1,268 8.2 (30.1) (13.3)
Other oil products 1,484 1,615 1,197 4,373 3,080 (8.1) 24.0 42.0
Subtotal oil products 21,177 20,518 14,404 57,331 35,978 3.2 47.0 59.4
Natural gas 2,007 1,961 1,716 5,691 4,086 2.3 17.0 39.3
Crude oil 1,975 2,682 26 6,418 80 (26.4) 7496.2 7922.5
Renewables and nitrogen products 69 95 12 230 34 (27.4) 475.0 576.5
Revenues from non-exercised rights 188 170 39 462 200 10.6 382.1 131.0
Electricity 141 109 1,038 543 2,172 29.4 (86.4) (75.0)
Services, agency and others 254 307 238 799 568 (17.3) 6.7 40.7
Total domestic market 25,811 25,842 17,473 71,474 43,118 (0.1) 47.7 65.8
Exports 5,696 8,189 5,607 20,620 16,103 (30.4) 1.6 28.1
   Crude oil 3,638 5,593 4,130 14,042 11,642 (35.0) (11.9) 20.6
   Fuel oil (including bunker fuel) 1,743 2,276 1,169 5,904 3,624 (23.4) 49.1 62.9
   Other oil products and other products 315 320 308 674 837 (1.6) 2.3 (19.5)
Sales abroad (*) 904 672 175 2,209 714 34.5 416.6 209.4
Total foreign market 6,600 8,861 5,782 22,829 16,817 (25.5) 14.1 35.7
Total 32,411 34,703 23,255 94,303 59,935 (6.6) 39.4 57.3
(*) Sales revenues from operations outside of Brazil, including trading and excluding exports.

In 3Q22, net revenues dropped 7% from 2Q22, mainly driven by the 11% depreciation in Brent prices. Revenues from oil products in the domestic market remained in line with 2Q22 - despite higher sales volumes of all products - due to the drop in international prices in 3Q22. Crude oil revenues in the domestic market fell 26% due to lower sales to Acelen and the drop in Brent prices.

Exports fell 30% in 3Q22 compared to 2Q22. In addition to the global depreciation of Brent and oil products prices, there were lower volumes of oil and fuel oil exports, mostly explained by exports that remained in progress for 4Q22.

In terms of revenue composition in the domestic market, diesel and gasoline remained the main products, accounting for 74% of the oil products revenue in 3Q22.

 

 

 

 

5  
 

 

Graph 1 – Oil products sales revenues 3Q22 – domestic market

 

 

 

As the conflict in Ukraine persists, we maintained the strategy of diversifying oil flows carried out in 1H22. Russian exports, which previously supplied Europe, were diverted to Asian markets, mainly India and China. Throughout the years Petrobras has been implementing a constant search for global opportunities and the development of new clients, which was decisive for the company to change the flow of its exports as well, taking advantage of new arbitrages and maximizing value generation in its sales. In 3Q22, we continued to work on market development for pre-salt oils, focusing on Atapu and Sépia, which were the last streams added to Petrobras' export basket. In this quarter, four new clients were added, spread among Asia, Europe and South America.

In 3Q22, we had the following distribution of export destinations by volume:

Table 3 – Destination of oil exports

Country 3Q22 2Q22 3Q21
China 29% 15% 39%
Europe 29% 39% 29%
Latam 21% 24% 10%
USA 10% 8% 9%
Asia (Ex China) 9% 12% 11%
Caribbean 2% 2% 2%

Table 4 – Destination of exports of oil products

Country 3Q22 2Q22 3Q21
Singapore 57% 55% 63%
USA 17% 26% 22%
Europe 9% 7% 0%
Caribbean 13% 9% 8%
Others 3% 3% 6%

Cost of goods sold

Table 5 – Cost of goods sold

            Variation (%)
US$ million 3Q22 2Q22 3Q21 9M22 9M21

3Q22 /

2Q22

3Q22 /

3Q21

9M22 /

9M21

Acquisitions (6,848) (5,405) (4,607) (16,882) (10,541) 26.7 48.6 60.2
Crude oil imports (3,190) (2,618) (1,486) (7,493) (4,057) 21.8 114.7 84.7
Oil products imports (2,818) (1,810) (1,800) (5,983) (3,767) 55.7 56.6 58.8
Natural gas imports (840) (977) (1,321) (3,406) (2,717) (14.0) (36.4) 25.4
Production (7,857) (8,956) (6,448) (24,298) (17,569) (12.3) 21.9 38.3
Crude oil (6,493) (7,537) (5,363) (20,191) (14,240) (13.9) 21.1 41.8
Production taxes (3,388) (4,134) (2,530) (10,695) (6,653) (18.0) 33.9 60.8
Other costs (3,105) (3,403) (2,833) (9,496) (7,587) (8.8) 9.6 25.2
Oil products (657) (641) (650) (1,922) (1,952) 2.5 1.1 (1.5)
Natural gas   (707) (778) (435) (2,185) (1,377) (9.1) 62.5 58.7
        Production taxes (219) (261) (141) (712) (415) (16.1) 55.3 71.6
        Other costs (488) (517) (294) (1,473) (962) (5.6) 66.0 53.1
Services, electricity, operations abroad and others (1,170) (879) (808) (2,714) (1,602) 33.1 44.8 69.4
Total (15,875) (15,240) (11,863) (43,894) (29,712) 4.2 33.8 47.7

 

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In 3Q22, cost of goods sold grew 4% compared to 2Q22, mainly reflecting higher purchases and imports of crude and oil products. The depreciation of Brent prices contributed to the drop in government participation.

It is worth noting the continued decline of LNG in the composition of natural gas purchases, with a reduction of 2 MMm³/day in regasification volumes, reaching 5 MM m3/day in 3Q22, essentially explained by the low demand for gas for thermoelectric plants due to the positive hydrological scenario.

Operating expenses

Table 6 – Operating expenses

            Variation (%)
US$ million 3Q22 2Q22 3Q21 9M22 9M21

3Q22 /

2Q22

3Q22 /

3Q21

9M22 /

9M21

Selling, General and Administrative Expenses (1,547) (1,570) (1,440) (4,594) (4,007) (1.5) 7.4 14.6
Selling expenses (1,213) (1,247) (1,103) (3,638) (3,137) (2.7) 10.0 16.0
Materials, third-party services, freight, rent and other related costs (973) (1,000) (924) (2,921) (2,633) (2.7) 5.3 10.9
Depreciation, depletion and amortization (194) (217) (159) (611) (448) (10.6) 22.0 36.4
Allowance for expected credit losses (20) (6) 7 (34) 13 233.3
Employee compensation (26) (24) (27) (72) (69) 8.3 (3.7) 4.3
General and administrative expenses (334) (323) (337) (956) (870) 3.4 (0.9) 9.9
Employee compensation (223) (216) (261) (637) (637) 3.2 (14.6)
Materials, third-party services, rent and other related costs (85) (83) (56) (246) (168) 2.4 51.8 46.4
Depreciation, depletion and amortization (26) (24) (20) (73) (65) 8.3 30.0 12.3
Exploration costs (107) (44) (133) (230) (538) 143.2 (19.5) (57.2)
Research and Development (187) (220) (151) (613) (415) (15.0) 23.8 47.7
Other taxes (93) (93) (217) (245) (369) (57.1) (33.6)
Impairment of assets (255) (168) 3,098 (422) 2,918 51.8
Other income and expenses, net (177) 2,189 (157) 1,690 (550) 12.7
Total (2,366) 94 1,000 (4,414) (2,961) 49.1

In 3Q22, selling expenses fell by 2.7% compared to 2Q22, with no major highlights.

General and Administrative expenses rose 3% compared to 2Q22, mainly reflecting wage adjustments under the Collective Bargaining Agreement.

The increase in exploration expenses is explained mostly by the reversal of expenses in 2Q22, due to the approval of the execution of a Conduct Adjustment Agreement (TAC) with the National Petroleum Agency to offset local content fines. The TAC provides for the conversion of fines into investment commitments in Exploration and Production with local content, and, under the terms of the agreement, Petrobras commits to invest in local content until 2026. In addition, there were higher expenses with geology and geophysics. The signature of the TAC does not alter the investments foreseen in the Strategic Plan 2022-26, disclosed by Petrobras on November 24, 2021, and is in line with the strategy of generating value by managing the Company's liabilities and improving its capital allocation.

In 3Q22, other expenses totaled US$ 177 million against revenues of US$ 2.2 billion in 2Q22. This variation is mainly explained by capital gain of US$ 2.9 billion in 2Q22 related to the co-participation agreements in the Sepia and Atapu fields.

 

 

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Adjusted EBITDA

In 3Q22, Adjusted EBITDA reached US$ 17.4 billion, a 13% decrease compared to 2Q22, mainly due to the depreciation of Brent prices in the period and lower sales in the foreign market due to the increase in ongoing exports.

Financial results

Table 7 – Financial results

            Variation (%)
US$ million 3Q22 2Q22 3Q21 9M22 9M21

3Q22 /

2Q22

3Q22 /

3Q21

9M22 /

9M21

Finance income 515 619 227 1,396 555 (16.8) 126.9 151.5
Income from investments and marketable securities (Government Bonds) 340 369 100 872 174 (7.9) 240.0 401.1
Other income, net 175 250 127 524 381 (30.0) 37.8 37.5
Finance expenses (790) (959) (1,191) (2,506) (4,270) (17.6) (33.7) (41.3)
Interest on finance debt (563) (693) (669) (1,786) (2,325) (18.8) (15.8) (23.2)
Unwinding of discount on lease liabilities (337) (334) (303) (961) (895) 0.9 11.2 7.4
Discount and premium on repurchase of debt securities (10) (84) (249) (120) (1,098) (88.1) (96.0) (89.1)
Capitalized borrowing costs 260 297 269 795 747 (12.5) (3.3) 6.4
Unwinding of discount on the provision for decommissioning costs (127) (137) (195) (394) (579) (7.3) (34.9) (32.0)
Other finance expenses , net (13) (8) (44) (40) (120) 62.5 (70.5) (66.7)
Foreign exchange gains (losses) and indexation charges (1,249) (2,858) (3,898) (3,016) (4,767) (56.3) (68.0) (36.7)
Foreign exchange gains (losses) (782) (1,640) (2,957) (1) (1,956) (52.3) (73.6) (99.9)
Reclassification of hedge accounting to the Statement of Income (1,109) (1,108) (1,032) (3,597) (3,339) 0.1 7.5 7.7
Monetary restatement of anticipated dividends and dividends payable (*) 398 (280) 20 118 7 1890.0 1582.2
Recoverable taxes inflation indexation income (**) 29 24 15 74 489 20.8 93.3 (84.9)
Other foreign exchange gains (losses) and indexation charges, net 215 146 56 390 32 47.3 283.9 1119.5
Total (1,524) (3,198) (4,862) (4,126) (8,482) (52.3) (68.7) (51.4)
(*) In 2022, it refers to the income on the monetary restatement of paid anticipated dividends, in the amount of US$ 417 (US$ 20 in 2021), and to the expense on the indexation charges on dividends payable, in the amount of US$ 299 (US$ 13 in 2021).
(**) In 2021, includes PIS and Cofins inflation indexation income - exclusion of ICMS (VAT tax) from the basis of calculation.

The financial result in 3Q22 was negative by US$ 1.5 billion, a 52% improvement over 2Q22 (US$ 3.2 billion), mainly reflecting the weaker depreciation of the BRL against USD (3% in 3Q22 against 11% in 2Q22). In addition, there was an improvement in monetary variations mainly due to the monetary restatement of anticipated dividends for the fiscal year 2022. In 3Q22, we also observed lower transaction costs in the repurchase of securities and a lower goodwill compared to 2Q22, when we carried out a tender offer of US$ 2.0 billion in April 2022.

Net profit (loss) attributable to Petrobras shareholders

Net income in 3Q22 was US$ 8.8 billion, compared to US$ 11 billion in 2Q22. This result is mainly explained by the depreciation of Brent prices, as well as capital gain of US$ 2.9 billion related to the co-participation agreements in Sepia and Atapu in 2Q22. These factors were partially offset by the improved financial result (US$ 1.7 billion) reflecting the lower depreciation of the BRL versus the USD in 3Q22 compared to 2Q22. With the lower pre-tax income, there was a lower income tax and social contribution expense of US$ 1.4 billion.

Recurring net income attributable to Petrobras shareholders and recurring Adjusted EBITDA

In 3Q22, no non-recurring items with a material impact on net income were observed. Adjusted EBITDA was negatively impacted by US$ 0.2 billion and would have summed up to US$ 17.6 billion without the non-recurring items.

 

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Special items

Table 8 – Special items

            Variation (%)
 US$ million 3Q22 2Q22 3Q21 9M22 9M21

3Q22 /

2Q22

3Q22 /

3Q21

9M22 /

9M21

Net income   8,790 11,041 5,954 28,479 14,310 (20.4) 47.6 99.0
Non-recurring items (63) 2,892 3,936 3,185 4,518 (29.5)
Non-recurring items that do not affect Adjusted EBITDA 97 3,108 4,525 3,661 4,527 (96.9) (97.9) (19.1)
Impairment of assets and investments (253) (170) 3,090 (431) 3,301 48.8
Reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments (7) (41)
Gains and losses on disposal / write-offs of assets 291 371 118 1,138 222 (21.6) 146.6 412.6
Results from co-participation agreements in bid areas (10) 2,872 667 2,862 667 329.1
Agreements signed for the electricity sector 78
Pis and Cofins inflation indexation charges -  exclusion of ICMS (VAT tax) from the basis of calculation 455
Discount and premium on repurchase of debt securities 69 35 (246) 92 (1,095) 97.1
Non-incidence of income taxes on indexation charges (SELIC interest rate) over undue paid taxes 903 903
Financial updating on state amnesty programs 37
Other non-recurring items (160) (216) (589) (476) (9) (25.9) (72.8) 5188.9
Voluntary Separation Plan (3) 1 (7) 8
Amounts recovered from Lava Jato investigation 22 26 34 222 (15.4) (84.7)
Gains / (losses) on decommissioning of returned/abandoned areas (1) (4) (4) (29) (10) (75.0) (75.0) 190.0
State amnesty programs 26 143
Gains / (losses) related to legal proceedings (181) (172) (104) (465) (248) 5.2 74.0 87.5
Equalization of expenses - Production Individualization Agreements (37) 19 (9) (33) (72.7)
PIS and COFINS over inflation indexation charges -  exclusion of ICMS (VAT tax) from the basis of calculation (21)
PIS and COFINS recovered - exclusion of ICMS (VAT tax) from the basis of calculation 11 484
Gains/(losses) arising from actuarial review of health care plan (852) (852)
Gains/(losses) with the transfer of rights on concession agreements 288 298
Net effect of non-recurring items on IR / CSLL 24 (984) (1,328) (1,083) (1,552) (30.2)
Recurring net income 8,829 9,133 3,347 26,377 11,344 (3.3) 163.8 132.5
Shareholders of Petrobras 8,803 9,101 3,332 26,277 11,273 (3.3) 164.2 133.1
Non-controlling interests 26 32 15 100 71 (18.8) 73.3 40.8
Adjusted EBITDA 17,410 19,943 11,623 52,314 32,279 (12.7) 49.8 62.1
Non-recurring items (160) (216) (589) (476) (9) (25.9) (72.8) 5188.9
Recurring Adjusted EBITDA 17,570 20,159 12,212 52,790 32,288 (12.8) 43.9 63.5

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.

 

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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 3Q22 2Q22 3Q21 9M22 9M21

3Q22 /

2Q22

3Q22 /

3Q21

9M22 /

9M21

Exploration and Production 1,685 1,674 1,456 4,734 5,030 0.7 15.8 (5.9)
Refining, Transportation and Marketing 295 274 226 821 673 7.6 30.2 21.9
Gas and Power 65 92 94 251 252 (29.3) (31.2) (0.3)
Others 86 141 86 274 186 (39.1) (0.4) 47.7
Subtotal 2,131 2,181 1,863 6,080 6,140 (2.3) 14.4 (1.0)
Signature bonus 892 892
Total 2,131 3,073 1,863 6,972 6,140 (30.6) 14.4 13.5

In 3Q22, capex totaled US$ 2.1 billion, 31% below 2Q22, mainly due to the impact of the signature bonus of the Sépia and Atapu fields that occurred in 2Q22. In the first nine months of the year, capex totaled US$ 7.0 billion, an increase of 14% compared to 9M21, reaching 59% of the US$ 11.9 billion initially estimated for 2022, in the Strategic Plan 2022-26, including the $0.9 billion signing bonus.

Considering: (i) adjustments to the schedule of activities, (ii) optimization of exploratory expenses, and (iii) non-replacement of pipelines affected by SCC-CO2 in Búzios and Tupi, which when inspected indicated a longer useful life, we project investments between US$ 9 and US$ 10 billion for the year, with no impact on the 2022 production target.

Investments in growth correspond to 48% of total capex in 3Q22.

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 3Q22, capex in the Exploration & Production segment totaled US$ 1.7 billion, in line with 2Q22. Investments in growth corresponded to 57% and were mainly concentrated on: (i) the development of ultra-deepwater production in the Santos Basin pre-salt (US$ 0.6 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 3Q22, of which approximately 18% was related to growth. In Gas & Power, capex totaled US$ 0.1 billion in 3Q22, with approximately 10% related to growth.

 

10  
 

 

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 0.93 2.0 92,66%2 Project in phase of execution with  production system under commisioning. 10 wells drilled and 7 completed.

Marlim 1

FPSO Anita Garibaldi

(Chartered unit)

2023 80,000 0.15 1.7 100% Project in phase of execution. Production system is sailing to Brazil.

Marlim 2

FPSO Anna Nery (Chartered unit)

2023 70,000 0.15 1.3 100% Project in phase of execution with  production system under commisioning.  2 wells drilled and completed.4

Mero 2

FPSO Sepetiba (Chartered unit)

2023 180,000 0.22 0.8 38,6%3 Project in phase of execution with production system under construction. 11 wells drilled and 4 completed

Itapu

P-71 (Owned unit)

20235 150,000 2.11 3.4 100% Project in phase of execution. Production system arrived in Itapu field. 4 wells drilled and 2 completed

Mero 3

FPSO Marechal Duque de Caxias (Chartered unit)

2024 180,000 0.07 0.8 38,6%3 Project in phase of execution with production system under construction. 4 wells drilled and 1 completed

Integrado Parque das Baleias (IPB)

FPSO Maria Quitéria

(Chartered unit)

2024 100,000 0.30 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 0.11 2.1 92,66%2

Project in phase of execution with production system under construction.

3 wells drilled and 1 completed

Búzios 6

P-78 (Owned unit)

2025 180,000 0.37 4.1 92,66%2 Project in phase of execution with production system under construction.

Búzios 8

P-79 (Owned unit)

2025 180,000 0.29 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 0.05 0.8 38,6%3

Project in phase of execution with production system under construction.

6 wells drilled and 2 completed

Búzios 9

P-80 (Owned unit)

2026 225,000 0.04 4.8 92,66%2

Project in phase of execution. Production system construction contract signed on August 2022.

2 wells drilled and completed

Búzios 10

P-82 (Owned unit)

2026 225,000 0.03 5.1 92,66%2 Project in phase of execution. Production system construction contract signed on October 2022.1 well drilled

Búzios 11

P-83 (Owned unit)

2027 225,000 0.02 4.8 92,66%2 Project in phase of execution. Production system construction contract signed on September 2022. 2 wells drilled

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 adjusted 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.

5 Anticipation to 2022 expected

 

11  
 

 

Portfolio management

In 3Q22, cash inflows from divestments totaled US$ 537 million, including the payment for the sale of Gaspetro, in the amount of US$ 392 million. In the first nine months of the year, we received US$3.9 billion from asset sales, including deferred payments from the sales of NTS (US$1.0 billion) in 2Q22 and Bacalhau (US$950 million) in 1Q22.

From January 1, 2022, to November 02, 2022, we concluded the sale of the Alagoas and Recôncavo Clusters, exploratory blocks in Parana and Potiguar Basins and our equity interests in Deten Química and Gaspetro. Additionally, we signed the contracts for the sale of the Potiguar, Norte Capixaba, Golfinho and Camarupim Clusters, the Albacora East field and LUBNOR Refinery.

Table 11 – Main transactions by November 02nd, 2022 and respective transaction amounts (excluding deferred payments)

Assets

Amount received

(US$ million)

Transaction amount1

(US$ million)

Bloco PAR-T-198_Paraná Basin 0.031 0.0316
Bloco PAR-T-218_Paraná Basin 0.032 0.0326
Bloco POT-T-794_Potiguar Basin 0.525 0.5256
East Albacora field 293 2,201
Papa-Terra field 6 105.66
Deten Química 101.2² 117²
Gaspetro 392.32 3946
Alagoas cluster 300 3006
Carmópolis cluster 275 1,1006
Fazenda Belém cluster 13.4 355
Golfinho e Camarupim clusters 3 75
Norte cluster 35.85 544
Peroá cluster 13.07 556
Pescada cluster - 25
Potiguar cluster 110 1,380
Recôncavo cluster 256 2505
LUBNOR refinery 3.4 34
REMAN refinery 28.4 189.56
SIX 3 336
Total amount 1,834 6,816

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

 

12  
 

 

Liquidity and capital resources[2]

Table 12 – Liquidity and capital resources

US$ million 3Q22 2Q22 3Q21 9M22 9M21
Adjusted cash and cash equivalents at the beginning of period 19,142 18,482 10,423 11,117 12,370
Government bonds and time deposits with maturities of more than 3 months at the beginning of period * (2,855) (1,259) (602) (650) (659)
Cash and cash equivalents in companies classified as held for sale at the beginning of the period 7 9 1 13 14
Cash and cash equivalents at the beginning of period 16,294 17,232 9,822 10,480 11,725
Net cash provided by operating activities 12,064 14,496 10,528 36,869 28,595
Net cash provided by (used in) investing activities (720) 3,621 3,953 1,913 1,600
Acquisition of PP&E and intangibles assets (1,947) (1,697) (1,505) (6,020) (4,640)
Investments in investees (1) (10) (4) (20) (15)
Proceeds from disposal of assets - Divestment 537 1,625 2,404 3,915 2,906
Financial compensation from co-participation agreements 121 5,152 2,938 5,334 2,938
Dividends received 77 190 94 319 294
Divestment (Investment) in marketable securities 493 (1,639) 26 (1,615) 117
(=) Net cash provided by operating and investing activities 11,344 18,117 14,481 38,782 30,195
Net cash used in financing activities (23,157) (18,099) (12,984) (44,406) (30,901)
Net financings (641) (4,155) (7,489) (6,704) (20,606)
     Proceeds from  financing 2,200 180 86 2,530 1,754
     Repayments (2,841) (4,335) (7,575) (9,234) (22,360)
Repayment of lease liability (1,324) (1,361) (1,482) (4,006) (4,381)
Dividends paid to shareholders of Petrobras (21,242) (12,429) (3,980) (33,671) (5,828)
Dividends paid to non-controlling interest (10) (53) (36) (68) (75)
Investments by non-controlling interest 60 (101) 3 43 (11)
Effect of exchange rate changes on cash and cash equivalents (107) (956) (394) (482) (94)
Cash and cash equivalents at the end of period 4,374 16,294 10,925 4,374 10,925
Government bonds and time deposits with maturities of more than 3 months at the end of period * 2,411 2,855 537 2,411 537
Cash and cash equivalents in companies classified as held for sale at the end of the period (7) (6) (6)
Adjusted cash and cash equivalents at the end of period 6,785 19,142 11,456 6,785 11,456
Reconciliation of Free Cash Flow          
Net cash provided by operating activities 12,064 14,496 10,528 36,869 28,595
Acquisition of PP&E and intangibles assets (1,947) (1,697) (1,505) (6,020) (4,640)
Free cash flow** 10,117 12,799 9,023 30,849 23,955

As of September 30, 2022, cash and cash equivalents totaled US$ 4.4 billion and adjusted cash and cash equivalents totaled US$ 6.8 billion, optimizing the company’s cash level.

In 3Q22, cash generated from operating activities reached US$ 12.1 billion and positive free cash flow totaled US$ 10.1 billion. This level of cash generation, along with our cash balances and the inflow of funds from the divestments of US$ 0.5 billion were used to: (a) pay remuneration to shareholders (US$ 21.2 billion) (b) prepay debt and amortize principal and interest due in the period (US$ 2.8 billion), (c) amortize lease liabilities (US$ 1.3 billion) and (d) make investments of US$ 1.9 billion.


[2] * 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.

 

13  
 

 

In 3Q22, the company settled several loans and financial debt, in the amount of US$ 2.8 billion, notably the repurchase and redemption of US$ 1.0 billion of securities in the international capital market. The company raised US$ 2.2 billion, of which (i) US$ 1.25 billion through a credit line with sustainability commitments (Sustainability-Linked Loan) in the international banking market due in 2027, and (ii) US$ 0.6 billion through the issuance of commercial notes in the domestic capital market due in 2030 and 2032.

The current level of gross debt, high cash generation and solid liquidity allowed the company to approve a shareholder remuneration payment in the amount of R$ 3,35 per common and preferred share.

 

14  
 

 

Debt

As of September 30, 2022, gross debt reached US$ 54.3 billion, a variation of 1.3% compared to June 30, 2022.

Average maturity shifted from 13 years on June 30, 2022, to 12 years on September 30, 2022, mainly because of the repurchase of long-term bonds in the international market, taking advantage of falling prices.

The gross debt/EBITDA ratio reached 0.85x on September 30, 2022, compared to 0.93x on June 30, 2022.

On September 30, 2022, net debt reached US$ 47.5 billion, as a result of the cash level optimization during 3Q22. The net debt/adjusted EBITDA ratio increased from 0.60x on June 30, 2022 to 0.75x on September 30, 2022.

Table 13 – Debt indicators

US$ million 09.30.2022 06.30.2022 Δ % 09.30.2021
Financial Debt 30,855 31,051 (0.6) 36,716
Capital Markets 16,800 18,261 (8.0) 22,213
Banking Market 10,713 9,158 17.0 10,524
Development banks 721 770 (6.4) 813
Export Credit Agencies 2,452 2,688 (8.8) 2,972
Others 169 174 (2.9) 194
Finance leases 23,413 22,526 3.9 22,872
Gross debt 54,268 53,577 1.3 59,588
Adjusted cash and cash equivalents 6,785 19,142 (64.6) 11,456
Net debt 47,483 34,435 37.9 48,132
Net Debt/(Net Debt + Market Cap) - Leverage 38% 32% 18.8 42%
Average interest rate (% p.a.) 6.4 6.3 1.6 6.0
Weighted average maturity of outstanding debt (years) 12.04 13.04 (7.7) 13.50
Net debt/LTM Adjusted EBITDA ratio 0.75 0.60 25.0 1.17
Gross debt/LTM Adjusted EBITDA ratio 0.85 0.93 (7.9) 1.45

 

 

 

 

15  
 

 

Results by segment

Exploration and Production

Table 14 – E&P results

            Variation (%) (*)
US$ million 3Q22 2Q22 3Q21 9M22 9M21

3Q22 /

2Q22

3Q22 /

3Q21

9M22 /

9M21

Sales revenues 19,293 21,940 14,628 60,917 39,803 (12.1) 31.9 53.0
Gross profit 11,866 13,764 8,326 37,638 22,661 (13.8) 42.5 66.1
Operating expenses (437) 2,519 3,706 2,049 2,728 (24.9)
Operating income 11,429 16,283 12,032 39,687 25,389 (29.8) (5.0) 56.3
Net income (loss) attributable to the shareholders of Petrobras 7,591 10,803 7,971 26,349 16,847 (29.7) (4.8) 56.4
Adjusted EBITDA of the segment 13,929 15,937 10,432 43,890 28,165 (12.6) 33.5 55.8
EBITDA margin of the segment (%) 72 73 71 72 71 1 1
ROCE (Return on Capital Employed) (%) 19.7 17.4 8.8 19.7 8.8 2.3 10.9 10.9
Average Brent crude (US$/bbl) 100.85 113.78 73.47 105.35 67.73 (11.4) 37.3 55.5
Internal Transfer Price to RTM - Crude oil (US$/bbl) 98.81 106.90 69.54 99.79 64.19 (7.6) 42.1 55.5
 Lifting cost - Brazil (US$/boe)                
     excluding production taxes and leases 5.85 5.98 5.02 5.68 4.95 (2.2) 16.5 14.8
     excluding production taxes 7.53 7.68 6.66 7.39 6.56 (1.9) 13.2 12.6
        Onshore and shallow waters                
           with leases 15.44 17.23 14.27 16.39 13.35 (10.4) 8.2 22.8
           excluding leases 15.44 17.23 14.27 16.39 13.35 (10.4) 8.2 22.8
       Deep and ultra-deep post-salt                
           with leases 13.66 14.47 12.16 13.10 11.48 (5.6) 12.3 14.1
           excluding leases 12.52 13.06 10.72 11.68 10.07 (4.2) 16.8 16.0
        Pre-salt                
           with leases 5.36 5.19 4.35 5.22 4.39 3.2 23.3 18.9
           excluding leases 3.44 3.31 2.53 3.33 2.58 3.8 35.8 29.1
     including production taxes and excluding leases 23.48 25.95 18.50 24.59 17.24 (9.5) 27.0 42.6
     including production taxes and leases 25.16 27.64 20.13 26.30 18.86 (9.0) 25.0 39.5
Production taxes - Brazil 3,604 4,034 2,981 11,704 7,973 (10.7) 20.9 46.8
     Royalties 2,036 2,247 1,534 6,424 4,080 (9.4) 32.7 57.5
     Special participation 1,556 1,774 1,437 5,244 3,864 (12.3) 8.3 35.7
     Retention of areas 12 13 11 37 29 (2.1) 16.0 27.1
(*) EBITDA margin and ROCE variations in percentage points

In 3Q22, E&P gross profit was US$ 11.9 billion, a reduction of 14% when compared to 2Q22, mainly due to the lower Brent prices. Operating income was 30% lower, reflecting the drop in gross profit and the fact that the compensation from the co-participation agreements of Sépia and Atapu fields took place in 2Q22.We recorded a 2% reduction in the lifting cost without leasing and government take when compared to 2Q22 due to the 7% BRL depreciation against the USD, partially offset by higher expenses related to project integrity, mainly subsea inspections in the Tupi field.

In the pre-salt, there was a slight increase of 4% in lifting cost, mainly driven by the higher expenses related to the subsea inspections, partially offset by the BRL depreciation.

In the post-salt, there was a 4% reduction in the same indicator when compared to 2Q22, mainly due to the aforementioned FX effect in the period.

In onshore and shallow water assets, we observed lower lifting costs due to the effect of the BRL depreciation against USD and to the stoppage of production in Sergipe-Alagoas fields, with higher lifting costs, for operational safety procedures.

The reduction in government take per barrel in 3Q22 reflects the lower Brent prices in the period.

 

16  
 

 

Refining, Transportation and Marketing

Table 15 – RTM results **

            Variation (%) (*)
US$ million 3Q22 2Q22 3Q21 9M22 9M21

3Q22 /

2Q22

3Q22 /

3Q21

9M22 /

9M21

Sales revenues 29,348 31,956 20,500 85,989 53,480 (8.2) 43.2 60.8
Gross profit (loss) 2,741 5,169 2,226 11,048 6,632 (47.0) 23.1 66.6
Operating expenses (675) (843) (1,029) (2,055) (1,951) (19.9) (34.4) 5.3
Operating Income 2,066 4,326 1,197 8,993 4,681 (52.2) 72.6 92.1
Net income (loss) attributable to the shareholders of Petrobras 1,340 2,761 1,046 6,088 3,972 (51.5) 28.1 53.3
Adjusted EBITDA of the segment 2,841 4,923 1,807 10,883 6,332 (42.3) 57.2 71.9
EBITDA margin of the segment (%) 10 15 9 13 12 (6) 1 1
ROCE (Return on Capital Employed) (%) 12.3 11.0 4.7 12.3 4.7 1.3 7.6 7.6
Refining cost (US$ / barrel) - Brazil 2.17 1.84 1.69 1.93 1.64 18.1 28.4 17.7
Domestic basic oil by-products price (US$/bbl) 131.99 135.20 80.70 124.23 74.05 (2.4) 63.6 67.8
(*) EBITDA margin and ROCE variations in percentage points

In 3Q22, gross profit from the Refining, Transportation and Marketing (RTM) segment was US$ 2.7 billion, a decrease of 47% when compared to 2Q22, due to the negative effect of inventories turnover, because of the decline in Brent prices, in contrast to the positive effect in 2Q22. Excluding the effect of inventory turnover (-US$ 1.6 billion in 3Q22 and +US$ 1.1 billion in 2Q22) gross profit would have been US$ 4.3 billion in 3Q22 and US$ 4 billion in 2Q22.

There were higher margins for oil products in the domestic market, mainly diesel, due to the high international margins, besides higher sales volumes for diesel, due to the typical seasonality, and gasoline, due to higher attractiveness compared to ethanol.

In 3Q22, the operating income was lower than in 2Q22, due to the lower gross profit, partially offset by lower expenses with lawsuits.

In 3Q22, refining cost per barrel in USD increased by 18% when compared to 2Q22, due to the increase in expenses with inputs and maintenance for the upkeep and revitalization of the refineries, in addition to readjustments in personnel costs. These higher costs were partially offset by the depreciation of BRL against USD in 3Q22.

 

17  
 

 

Gas and Power

Table 16 – G&P results

            Variation (%) (*)
US$ million 3Q22 2Q22 3Q21 9M22 9M21

3Q22 /

2Q22

3Q22 /

3Q21

9M22 /

9M21

Sales revenues 4,148 3,734 3,444 11,247 8,306 11.1 20.4 35.4
Gross profit 1,502 1,368 778 3,350 2,648 9.8 93.1 26.5
Operating expenses (590) (816) (772) (2,295) (2,183) (27.7) (23.6) 5.1
Operating income 912 552 6 1,055 465 65.2 15100.0 126.9
Net income (loss) attributable to the shareholders of Petrobras 595 368 3 696 333 61.7 19733.3 109.0
Adjusted EBITDA of the segment 876 657 194 1,232 905 33.3 351.5 36.1
EBITDA margin of the segment (%) 21 18 6 11 11 4 15
ROCE (Return on Capital Employed) (%) (0.6) (3.9) 2.6 (0.6) 2.6 3.3 (3.2) (3.2)
Natural gas sales price - Brazil (US$/bbl) 75.74 71.16 46.98 67.02 41.43 6.4 61.2 61.8
Fixed revenues from power auctions 101.46 104.51 109.98 301.67 317.62 (2.9) (7.7) (5.0)
Average price for power generation(US$/MWh) 13.77 18.90 96.51 40.98 82.11 (27.1) (85.7) (50.1)
(*) EBITDA margin and ROCE variations in percentage points

 

In 3Q22, gross profit was US$ 1.5 billion, an increase of 9.8% when compared to 2Q22, mainly reflecting the recovery in commercialization margins, resulting from: (a) the improvement in the natural gas sales portfolio, and; (b) the lower need for regasified LNG with the resumption of stoppages in production platforms throughout 2Q22.

In 3Q22, operating income was US$ 912 million, 65% higher than in 2Q22, due to higher gross profit and lower operating expenses due to the capital gain related to the sale of Gaspetro.

 

18  
 

 

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 Resolution 156 of June 2022.

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 3Q22 2Q22 3Q21 9M22 9M21

3Q22 /

2Q22

3Q22 /

3Q21

9M22 /

9M21

Net income 8,790 11,041 5,954 28,479 14,310 (20.4) 47.6 99.0
Net finance (expense) income 1,524 3,198 4,862 4,126 8,482 (52.3) (68.7) (51.4)
Income taxes 3,888 5,309 1,867 13,763 5,970 (26.8) 108.2 130.5
Depreciation, depletion and amortization 3,267 3,460 3,108 9,897 8,786 (5.6) 5.1 12.6
EBITDA 17,469 23,008 15,791 56,265 37,548 (24.1) 10.6 49.8
Results in equity-accounted investments (32) 9 (291) (373) (1,500) (89.0) (75.1)
Impairment 255 168 (3,098) 422 (2,918) 51.8
Reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments 7 41
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control (292) (370) (119) (1,138) (225) (21.1) 145.4 405.8
Results from co-participation agreements in bid areas 10 (2,872) (667) (2,862) (667) 329.1
Adjusted EBITDA 17,410 19,943 11,623 52,314 32,279 (12.7) 49.8 62.1
Adjusted EBITDA margin (%) 54 57 50 55 54 (3.0) 4.0 1.0
(*) EBITDA Margin variations in percentage points

 

 

 

19  
 

 

Financial statements

Table 18 - Income statement - Consolidated

US$ million 3Q22 2Q22 3Q21 9M22 9M21
Sales revenues 32,411 34,703 23,255 94,303 59,935
Cost of sales (15,875) (15,240) (11,863) (43,894) (29,712)
Gross profit 16,536 19,463 11,392 50,409 30,223
Selling expenses (1,213) (1,247) (1,103) (3,638) (3,137)
General and administrative expenses (334) (323) (337) (956) (870)
Exploration costs (107) (44) (133) (230) (538)
Research and development expenses (187) (220) (151) (613) (415)
Other taxes (93) (93) (217) (245) (369)
Impairment of assets (255) (168) 3,098 (422) 2,918
Other income and expenses (177) 2,189 (157) 1,690 (550)
  (2,366) 94 1,000 (4,414) (2,961)
Operating income 14,170 19,557 12,392 45,995 27,262
Finance income 515 619 227 1,396 555
Finance expenses (790) (959) (1,191) (2,506) (4,270)
Foreign exchange gains (losses) and inflation indexation charges (1,249) (2,858) (3,898) (3,016) (4,767)
Net finance income (expense) (1,524) (3,198) (4,862) (4,126) (8,482)
Results in equity-accounted investments 32 (9) 291 373 1,500
Income before income taxes 12,678 16,350 7,821 42,242 20,280
Income taxes (3,888) (5,309) (1,867) (13,763) (5,970)
Net Income 8,790 11,041 5,954 28,479 14,310
Net income attributable to:          
     Shareholders of Petrobras 8,763 11,010 5,938 28,378 14,239
     Non-controlling interests 27 31 16 101 71
           

 

20  
 

 

Table 19 - Statement of financial position – Consolidated

ASSETS - US$ million 09.30.2022 12.31.2021
Current assets 29,469 30,149
Cash and cash equivalents 4,374 10,467
Marketable securities 2,411 650
Trade and other receivables, net 4,074 6,368
Inventories 9,770 7,255
Recoverable taxes 1,436 1,346
Assets classified as held for sale 5,305 2,490
Other current assets 2,099 1,573
Non-current assets 145,793 144,199
Long-term receivables 17,149 14,334
Trade and other receivables, net 1,945 1,900
Marketable securities 49 44
Judicial deposits 10,046 8,038
Deferred taxes 494 604
Other tax assets 3,675 3,261
Other non-current assets 940 487
Investments 1,672 1,510
Property, plant and equipment 124,120 125,330
Intangible assets 2,852 3,025
Total assets 175,262 174,348
     
     
LIABILITIES - US$ million 09.30.2022 12.31.2021
Current liabilities 25,119 24,176
Trade payables 5,209 5,483
Finance debt 3,306 3,641
Lease liability 5,337 5,432
Taxes payable 4,451 4,734
Short-term employee benefits 2,205 2,144
Liabilities related to assets classified as held for sale 1,658 867
Other current liabilities 2,953 1,875
Non-current liabilities 80,948 80,360
Finance debt 27,549 32,059
Lease liability 18,076 17,611
Income taxes payable 297 300
Deferred taxes 6,561 1,229
Employee benefits 8,741 9,374
Provision for legal and administrative proceedings 2,519 2,018
Provision for decommissioning costs 14,890 15,619
Other non-current liabilities 2,315 2,150
Shareholders' equity 69,195 69,812
Share capital  (net of share issuance costs)  107,101 107,101
Profit reserves and others (38,203) (37,694)
Non-controlling interests 297 405
Total liabilities and shareholders´ equity 175,262 174,348

 

21  
 

 

Table 20 - Statement of cash flow – Consolidated

US$ million 3Q22 2Q22 3Q21 9M22 9M21
Cash flow from Operating activities          
Net income for the period 8,790 11,041 5,954 28,479 14,310
Adjustments for:          
Pension and medical benefits (actuarial expense) 306 326 1,168 939 1,806
Results of equity-accounted investments (32) 9 (291) (373) (1,500)
Depreciation, depletion and amortization 3,267 3,460 3,108 9,897 8,786
Impairment of assets (reversal) 255 168 (3,098) 422 (2,918)
Inventory write-down (write-back) to net realizable value 4 10 7 (3)
Allowance (reversals) for credit loss on trade and other receivables 3 18 (10) 42 (14)
Exploratory expenditures write-offs 34 71 27 128 214
Disposal/write-offs of assets, remeasurement of investment retained with loss of control and reclassification of CTA (292) (370) (111) (1,138) (182)
Foreign exchange, indexation and finance charges   1,853 3,371 4,580 4,735 8,232
Deferred income taxes, net 250 28 115 2,239 3,998
Revision and unwinding of discount on the provision for decommissioning costs 129 141 198 424 587
PIS and COFINS recovery - exclusion of ICMS (VAT tax) from the basis of calculation 3 (4) (10) (1) (983)
Results from co-participation agreements in bid areas 10 (2,872) (667) (2,862) (667)
Assumption of interest in concessions (98) (98)
Early termination and cash outflows revision of lease agreements (157) (176) (121) (558) (348)
Losses with legal, administrative and arbitration proceedings 264 298 270 821 545
Decrease (Increase) in assets          
Trade and other receivables 672 (584) (752) 729 (1,487)
Inventories (561) (117) (585) (2,595) (2,164)
Judicial deposits (453) (461) (354) (1,312) (835)
Other assets (104) (625) 57 (756) (125)
Increase (Decrease) in liabilities          
Trade payables (200) (3) 510 (341) 850
Other taxes payable 2,224 4,070 1,988 9,129 4,451
    Income taxes paid (3,699) (3,527) (827) (8,801) (946)
Pension and medical benefits (180) (212) (392) (1,869) (2,055)
Provision for legal and administrative proceedings (77) (126) (88) (254) (355)
Short-term benefits 303 (216) 89 (63) (139)
Provision for decommissioning costs (164) (146) (201) (442) (526)
Other liabilities (384) 924 69 243 161
Net cash provided by operating activities 12,064 14,496 10,528 36,869 28,595
Cash flows from Investing activities          
Acquisition of PP&E and intangible assets (1,947) (1,697) (1,505) (6,020) (4,640)
Investments in investees (1) (10) (4) (20) (15)
Proceeds from disposal of assets - Divestment 537 1,625 2,404 3,915 2,906
Financial compensation from co-participation agreements 121 5,152 2,938 5,334 2,938
Divestment (Investment) in marketable securities 493 (1,639) 26 (1,615) 117
Dividends received 77 190 94 319 294
Net cash provided (used) by investing activities (720) 3,621 3,953 1,913 1,600
Cash flows from Financing activities          
Changes in non-controlling interest 60 (101) 3 43 (11)
Financing and loans, net:          
Proceeds from financing 2,200 180 86 2,530 1,754
Repayment of principal - finance debt (2,319) (3,986) (6,932) (7,796) (20,490)
Repayment of interest - finance debt (522) (349) (643) (1,438) (1,870)
Repayment of lease liability (1,324) (1,361) (1,482) (4,006) (4,381)
Dividends paid to Shareholders of Petrobras (21,242) (12,429) (3,980) (33,671) (5,828)
Dividends paid to non-controlling interests (10) (53) (36) (68) (75)
Net cash (used) by financing activities (23,157) (18,099) (12,984) (44,406) (30,901)
Effect of exchange rate changes on cash and cash equivalents (107) (956) (394) (482) (94)
Net change in cash and cash equivalents (11,920) (938) 1,103 (6,106) (800)
Cash and cash equivalents at the beginning of the period 16,294 17,232 9,822 10,480 11,725
Cash and cash equivalents at the end of the period 4,374 16,294 10,925 4,374 10,925

 

 

22  
 

 

Financial information by business areas

Table 21 - Consolidated income by segment – 9M22

US$ million E&P RTM GAS & POWER CORP. ELIMIN. TOTAL
Sales revenues 60,917 85,989 11,247 402 (64,252) 94,303
Intersegments 59,918 1,460 2,872 2 (64,252)
Third parties 999 84,529 8,375 400 94,303
Cost of sales (23,279) (74,941) (7,897) (409) 62,632 (43,894)
Gross profit 37,638 11,048 3,350 (7) (1,620) 50,409
Expenses 2,049 (2,055) (2,295) (2,103) (10) (4,414)
Selling expenses (12) (1,309) (2,297) (10) (10) (3,638)
General and administrative expenses (30) (127) (49) (750) (956)
Exploration costs (230) (230)
Research and development expenses (524) (7) (4) (78) (613)
Other taxes (47) (15) (35) (148) (245)
Impairment of assets (127) (295) 1 (1) (422)
Other income and expenses 3,019 (302) 89 (1,116) 1,690
Operating income (loss) 39,687 8,993 1,055 (2,110) (1,630) 45,995
Net finance income (expense) (4,126) (4,126)
Results in equity-accounted investments 154 153 71 (5) 373
Income (loss) before income taxes 39,841 9,146 1,126 (6,241) (1,630) 42,242
Income taxes (13,495) (3,058) (359) 2,593 556 (13,763)
Net Income (Loss) 26,346 6,088 767 (3,648) (1,074) 28,479
Net income (loss) attributable to:            
   Shareholders of Petrobras 26,349 6,088 696 (3,681) (1,074) 28,378
   Non-controlling interests (3) 71 33 101

 

Table 22 - Consolidated income by segment – 9M21

US$ million E&P RTM GAS & POWER CORP. ELIMIN. TOTAL
Sales revenues 39,803 53,480 8,306 360 (42,014) 59,935
Intersegments 39,013 1,011 1,832 158 (42,014)
Third parties 790 52,469 6,474 202 59,935
Cost of sales (17,142) (46,848) (5,658) (355) 40,291 (29,712)
Gross profit 22,661 6,632 2,648 5 (1,723) 30,223
Expenses 2,728 (1,951) (2,183) (1,537) (18) (2,961)
Selling expenses (1,154) (1,955) (10) (18) (3,137)
General and administrative expenses (111) (108) (52) (599) (870)
Exploration costs (538) (538)
Research and development expenses (304) (8) (19) (84) (415)
Other taxes (118) (100) (99) (52) (369)
Impairment of assets 3,099 (13) (169) 1 2,918
Other income and expenses 700 (568) 111 (793) (550)
Operating income (loss) 25,389 4,681 465 (1,532) (1,741) 27,262
Net finance income (expense) (8,482) (8,482)
Results in equity-accounted investments 85 885 85 445 1,500
Income (loss) before income taxes 25,474 5,566 550 (9,569) (1,741) 20,280
Income taxes (8,630) (1,593) (158) 3,819 592 (5,970)
Net Income (Loss) 16,844 3,973 392 (5,750) (1,149) 14,310
Net income (loss) attributable to:            
    Shareholders of Petrobras 16,847 3,972 333 (5,764) (1,149) 14,239
    Non-controlling interests (3) 1 59 14 71

 

 

23  
 

 

 

Table 23 - Quarterly consolidated income by segment – 3Q22

US$ million E&P RTM GAS & POWER CORP. ELIMIN. TOTAL
Sales revenues 19,293 29,348 4,148 126 (20,504) 32,411
Intersegments 18,972 529 1,002 1 (20,504)
Third parties 321 28,819 3,146 125 32,411
Cost of sales (7,427) (26,607) (2,646) (137) 20,942 (15,875)
Gross profit 11,866 2,741 1,502 (11) 438 16,536
Expenses (437) (675) (590) (661) (3) (2,366)
Selling expenses (7) (440) (760) (3) (3) (1,213)
General and administrative expenses (6) (48) (15) (265) (334)
Exploration costs (107) (107)
Research and development expenses (159) (1) (1) (26) (187)
Other taxes (8) 10 (16) (79) (93)
Impairment of assets (4) (251) (255)
Other income and expenses (146) 55 202 (288) (177)
Operating income (loss) 11,429 2,066 912 (672) 435 14,170
Net finance income (expense) (1,524) (1,524)
Results in equity-accounted investments 46 (23) 12 (3) 32
Income (loss) before income taxes 11,475 2,043 924 (2,199) 435 12,678
Income taxes (3,885) (703) (310) 1,158 (148) (3,888)
Net income (loss) 7,590 1,340 614 (1,041) 287 8,790
Net income (loss) attributable to:            
   Shareholders of Petrobras 7,591 1,340 595 (1,050) 287 8,763
   Non-controlling interests (1) 19 9 27

 

Table 24 - Quarterly consolidated income by segment – 2Q22

US$ million E&P RTM GAS & POWER CORP. ELIMIN. TOTAL
Sales revenues 21,940 31,956 3,734 150 (23,077) 34,703
Intersegments 21,572 498 1,009 (2) (23,077)
Third parties 368 31,458 2,725 152 34,703
Cost of sales (8,176) (26,787) (2,366) (147) 22,236 (15,240)
Gross profit 13,764 5,169 1,368 3 (841) 19,463
Expenses 2,519 (843) (816) (763) (3) 94
Selling expenses (3) (461) (776) (4) (3) (1,247)
General and administrative expenses (12) (42) (18) (251) (323)
Exploration costs (44) (44)
Research and development expenses (192) (3) (25) (220)
Other taxes (24) (18) (9) (42) (93)
Impairment of assets (124) (44) (168)
Other income and expenses 2,918 (275) (13) (441) 2,189
Operating income (loss) 16,283 4,326 552 (760) (844) 19,557
Net finance income (expense) (3,198) (3,198)
Results in equity-accounted investments 57 (95) 30 (1) (9)
Income (loss) before income taxes 16,340 4,231 582 (3,959) (844) 16,350
Income taxes (5,538) (1,470) (188) 1,599 288 (5,309)
Net income (loss) 10,802 2,761 394 (2,360) (556) 11,041
Net income (loss) attributable to:            
   Shareholders of Petrobras 10,803 2,761 368 (2,366) (556) 11,010
   Non-controlling interests (1) 26 6 31

 

 

 

 

 

24  
 

 

Table 25 - Other income and expenses by segment – 9M22

US$ million E&P RTM GAS & POWER CORP. ELIMIN. TOTAL
Unscheduled stoppages and pre-operating expenses (1,275) (18) (22) (29) (1,344)
Losses with legal, administrative and arbitration proceedings (384) (192) (60) (185) (821)
Pension and medical benefits - retirees (*) (795) (795)
Performance award program (163) (85) (20) (132) (400)
Losses with Commodities Derivatives (135) (135)
Operating expenses with thermoelectric power plants (108) (108)
Profit sharing (42) (26) (6) (29) (103)
Transfer of rights on concession agreements
Amounts recovered from Lava Jato investigation 17 17 34
Recovery of taxes 9 44 53
Fines imposed on suppliers 125 15 31 4 175
Government grants 4 326 330
Reimbursements from E&P partnership operations 448 448
Early termination and changes to cash flow estimates of leases 511 48 16 (17) 558
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control 881 98 156 3 1,138
Results from co-participation agreements in bid areas (**) 2,862 2,862
Others 35 (151) 102 (188) (202)
  3,019 (302) 89 (1,116) 1,690
(*)  In 2022, it includes US$ 67 referring to the payment of a contribution as provided for in the Pre-70 Term of Financial Commitment (TFC) for the administrative funding of the PPSP-R pre-70 and PPSP-NR pre-70 plans.
(**) It refers to the gain related to the Co-participation Agreements of Atapu and Sépia.

Table 26 - Other income and expenses by segment – 9M21

US$ million E&P RTM GAS & POWER CORP. ELIMIN. TOTAL
Unscheduled stoppages and pre-operating expenses (952) (12) (20) (9) (993)
Gains/ (losses) with legal, administrative and arbitration proceedings (181) (422) (2) 60 (545)
Pension and medical benefits - retirees (1,255) (1,255)
Performance award program (139) (77) (16) (115) (347)
Losses with Commodities Derivatives (56) (56)
Operating expenses with thermoelectric power plants (63) (63)
Profit sharing (37) (25) (2) (29) (93)
Transfer of rights on concession agreements 298 298
Amounts recovered from Lava Jato investigation (*) 8 214 222
Recovery of taxes (**) 10 31 502 543
Fines imposed on suppliers 97 15 7 5 124
Government grants 3 1 26 30
Reimbursements from E&P partnership operations 425 425
Early termination and changes to cash flow estimates of leases 351 29 (22) (11) 347
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control 148 1 55 18 222
Results from co-participation agreements in bid areas 667 667
Others 12 (88) 143 (143) (76)
  700 (568) 111 (793) (550)
(*) The total amount recovered from Lava Jato Investigation through December 31, 2021 was US$ 1,522 million, recognized through collaboration and leniency agreements entered into with individuals and legal entities.
(**) In the nine-month period ended September 30, 2021, 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..

 

 

25  
 

 

 

Table 27 - Other income and expenses by segment –3Q22

US$ million E&P RTM GAS & POWER CORP. ELIMIN. TOTAL
Unscheduled stoppages and pre-operating expenses (423) (6) (12) (14) (455)
Pension and medical benefits - retirees (*) (304) (304)
Gains (losses) with legal, administrative and arbitration proceedings (248) 55 (1) (70) (264)
Performance award program (61) (34) (7) (51) (153)
Profit sharing (16) (10) (2) (10) (38)
Operating expenses with thermoelectric power plants (37) (37)
Results from co-participation agreements in bid areas (**) (10) (10)
Transfer of rights on concession agreements
Recovery of taxes 2 10 12
Amounts recovered from Lava Jato investigation 17 5 22
Fines imposed on suppliers 37 3 22 (3) 59
Gains with Commodities Derivatives 87 87
Government grants 2 122 124
Early termination and changes to cash flow estimates of leases 136 18 13 (10) 157
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control 75 54 163 292
Reimbursements from E&P partnership operations 294 294
Others 51 (27) 63 (50) 37
  (146) 55 202 (288) (177)
(*)  In 2022, it includes US$ 67 referring to the payment of a contribution as provided for in the Pre-70 Term of Financial Commitment (TFC) for the administrative funding of the PPSP-R pre-70 and PPSP-NR pre-70 plans.
(**) It refers to the gain related to the Co-participation Agreements of Atapu and Sépia.

Table 28 - Other income and expenses by segment – 2Q22

US$ million E&P RTM GAS & POWER CORP. ELIMIN. TOTAL
Unscheduled stoppages and pre-operating expenses (494) (8) (3) (8) (513)
Pension and medical benefits - retirees (253) (253)
Losses with legal, administrative and arbitration proceedings (74) (179) (4) (41) (298)
Performance award program (54) (27) (7) (41) (129)
Profit sharing (14) (8) (2) (10) (34)
Operating expenses with thermoelectric power plants (39) (39)
Results from co-participation agreements in bid areas (*) 2,872 2,872
Transfer of rights on concession agreements
Recovery of taxes 6 18 24
Amounts recovered from Lava Jato investigation
Fines imposed on suppliers 41 3 4 48
Losses with Commodities Derivatives (169) (169)
Government grants 131 131
Early termination and changes to cash flow estimates of leases 173 10 (7) 176
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control 386 (10) (6) 370
Reimbursements from E&P partnership operations 127 127
Others (45) (62) 48 (65) (124)
  2,918 (275) (13) (441) 2,189
(*) It refers to the gain related to the Co-participation Agreements of Atapu and Sépia.

 

 

26  
 

 

Table 29 - Consolidated assets by segment – 09.30.2022

US$ million E&P RTM GAS & POWER CORP. AND OTHERS ELIMIN. TOTAL
Total assets 114,684 39,909 11,091 19,102 (9,524) 175,262
             
Current assets 8,362 17,514 3,641 9,476 (9,524) 29,469
Non-current assets 106,322 22,395 7,450 9,626 145,793
Long-term receivables 6,201 2,797 599 7,552 17,149
Investments 400 1,076 165 31 1,672
Property, plant and equipment 97,316 18,416 6,615 1,773 124,120
Operating assets 87,185 15,881 4,652 1,436 109,154
Assets under construction 10,131 2,534 1,963 338 14,966
Intangible assets 2,405 106 71 270 2,852

 

Table 30 - 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

 

27  
 

 

Table 31 - Reconciliation of Adjusted EBITDA by segment – 9M22

US$ million E&P RTM GAS & POWER CORP. AND OTHERS ELIMIN. TOTAL
Net income (loss) 26,346 6,088 767 (3,648) (1,074) 28,479
Net finance income (expense) 4,126 4,126
Income taxes 13,495 3,058 359 (2,593) (556) 13,763
Depreciation, depletion and amortization 7,819 1,692 334 52 9,897
EBITDA 47,660 10,838 1,460 (2,063) (1,630) 56,265
Results in equity-accounted investments (154) (153) (71) 5 (373)
Impairment 127 295 (1) 1 422
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 (881) (97) (156) (4) (1,138)
Results from co-participation agreements in bid areas (2,862) (2,862)
Adjusted EBITDA 43,890 10,883 1,232 (2,061) (1,630) 52,314

 

Table 32 - Reconciliation of Adjusted EBITDA by segment – 9M21

US$ million E&P RTM GAS & POWER CORP. AND OTHERS ELIMIN. TOTAL
Net income (loss) 16,844 3,973 392 (5,750) (1,149) 14,310
Net finance income (expense) 8,482 8,482
Income taxes 8,630 1,593 158 (3,819) (592) 5,970
Depreciation, depletion and amortization 6,690 1,640 326 130 8,786
EBITDA 32,164 7,206 876 (957) (1,741) 37,548
Results in equity-accounted investments (85) (885) (85) (445) (1,500)
Impairment (3,099) 13 169 (1) (2,918)
Reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments 41 41
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control (148) (2) (55) (20) (225)
Results from co-participation agreements in bid areas (667) (667)
Adjusted EBITDA 28,165 6,332 905 (1,382) (1,741) 32,279

 

Table 33 - Reconciliation of Adjusted EBITDA by segment – 3Q22

US$ million E&P RTM GAS & POWER CORP. AND OTHERS ELIMIN. TOTAL
Net income (loss) 7,590 1,340 614 (1,041) 287 8,790
Net finance income (expense) 1,524 1,524
Income taxes 3,885 703 310 (1,158) 148 3,888
Depreciation, depletion and amortization 2,561 578 127 1 3,267
EBITDA 14,036 2,621 1,051 (674) 435 17,469
Results in equity-accounted investments (46) 23 (12) 3 (32)
Impairment 4 251 255
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 (75) (54) (163) (292)
Results from co-participation agreements in bid areas 10 10
Adjusted EBITDA 13,929 2,841 876 (671) 435 17,410

 

 

28  
 

 

Table 34 - Reconciliation of Adjusted EBITDA by segment – 2Q22

US$ million E&P RTM GAS & POWER CORP. AND OTHERS ELIMIN. TOTAL
Net income (loss) 10,802 2,761 394 (2,360) (556) 11,041
Net finance income (expense) 3,198 3,198
Income taxes 5,538 1,470 188 (1,599) (288) 5,309
Depreciation, depletion and amortization 2,788 542 99 31 3,460
EBITDA 19,128 4,773 681 (730) (844) 23,008
Results in equity-accounted investments (57) 95 (30) 1 9
Impairment 124 44 168
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 (386) 11 6 (1) (370)
Results from co-participation agreements in bid areas (2,872) (2,872)
Adjusted EBITDA 15,937 4,923 657 (730) (844) 19,943

 

29  
 

 

 

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 – Adjusted EBITDA (a non-GAAP measure defined as net income plus net finance income (expense); income taxes; depreciation, depletion and amortization; results in equity-accounted investments; impairment of assets (reversals); results on disposal/write-offs of assets, remeasurement of investment retained with loss of control and reclassification of CTA; and results from co-participation agreements in bid areas).

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.

 

 

 

30  

 

 

 

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: November 3, 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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