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Petrobras Has a Recurring Profit in 2018 After 4 Years of Losses

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The Petrobras recorded net income of R $ 2.1 billion in the last quarter of 2018. Excluding extraordinary events, however, the net recurring profit would be $ 8 billion. In the year closed, the state-owned company reported a net profit of R $ 25.8 billion in 2018, the first positive result in five years and also the highest since 2011.

If special items are excluded  the closure according to the National Petroleum Agency (ANP) related to ‘Parque das Baleias’, the impairment record and losses with contingencies, among them  the recurring net income would be higher, of R $ 36 billion. These non-recurring items totaled R$ 10 billion in 2018.

Fourth-quarter results reflected a reduction in the London oil price (Brent) and margins in derivatives sales, as well as the occurrence of special items, totaling R$ 6.3 billion, including closing in accordance with the ANP related to the ‘Parque das Baleias’, the record of impairment and losses with contingencies. On the other hand, there was a growth of 6% in production and 45% in oil exports. Adjusted Ebitda reached R$ 29.2 billion and free cash flow, R$ 17.1 billion. If special items were excluded, adjusted Ebitda would reach R$ 31 billion.

Considering all year, the company recorded two financial records: Adjusted Ebitda of R $ 114.9 billion and, for the fourth consecutive year, positive free cash flow of R $ 54.6 billion.

Petrobras‘ performance in 2018 was undoubtedly the best in many years, which includes obtaining some historical records, involving free cash flow and adjusted Ebitda, and the interruption of four years of losses, says the president of Petrobras, Roberto Castello Branco, in a letter sent to the market on Wednesday.

The solid result presented by the company in 2018 reflects factors such as higher margins in the sales of derivatives in Brazil and in oil exports, accompanying the increase in the Brent quotation and the appreciation of the dollar. There was also a recovery of market share in diesel and a decrease in general and administrative expenses. Also contributing to the result where the reduction of interest expenses, due to the decrease in indebtedness, and the regularization of credits with Eletrobras.

Total compensation to shareholders for the fiscal year 2018 will reach R $ 7.1 billion, considering the advances made during the year. You will also be paid profit sharing for employees.

In 2018, Petrobras generated R $ 151.5 billion in municipal, state and federal taxes, in addition to government participation. You will also be paid profit sharing for employees.

In 2019,Petrobras projects an increase in oil and natural gas production to 2.8 million boed, with 2.3 million bpd of oil in Brazil. This growth will be made possible by the increase in production (ramp up) on the newly installed platforms, as well as the start-up of the P-77 and P-68. The company will continue to divest and reduce financial leverage, maintaining capital discipline and optimizing portfolio, debt and cash management.