The main functional currency of the Petrobras Group is the Brazilian
real, which is the functional currency of the parent company and its Brazilian subsidiaries. As the presentation currency of the Petrobras
Group is the U.S. dollar, the results of operations in Brazilian reais are translated into U.S. dollars using the average exchange rates
prevailing during the period (average exchange rate of R$/US$ 5.13 in Jan-Sep/2022 compared to R$/US$ 5.33 in Jan-Sep/2021).
Key Financial Information
US$ million |
Jan-Sep/2022 |
Jan-Sep/2021 |
Change
(%) |
Sales revenues |
94,303 |
59,935 |
57.3 |
Cost of Sales |
(43,894) |
(29,712) |
47.7 |
Gross profit |
50,409 |
30,223 |
66.8 |
Income (expenses) |
(4,414) |
(2,961) |
49.1 |
Consolidated net income attributable to the shareholders of Petrobras |
28,378 |
14,239 |
99.3 |
Net cash provided by operating activities |
36,869 |
28,595 |
28.9 |
Adjusted EBITDA |
52,314 |
32,279 |
62.1 |
Average Brent crude (US$/bbl) |
105.35 |
67.73 |
55.5 |
Average Crude Oil sales price (US$/bbl) |
99.79 |
64.19 |
55.5 |
Average Domestic basic oil products price (US$/bbl) |
124.23 |
74.05 |
67.8 |
US$ million |
09.30.2022 |
12.31.2021 |
Change
(%) |
Gross Debt |
54,268 |
58,743 |
(7.6) |
Net Debt |
47,483 |
47,626 |
(0.3) |
Gross Debt/LTM Adjusted EBITDA ratio |
0.85 |
1.35 |
(37.0) |
Net Debt/LTM Adjusted EBITDA ratio |
0.75 |
1.09 |
(31.2) |
Sales Revenues
US$ million |
Jan-Sep/2022 |
Jan-Sep/2021 |
Change
(%) |
Diesel |
29,849 |
17,480 |
70.8 |
Gasoline |
12,143 |
8,148 |
49.0 |
Liquefied petroleum gas (LPG) |
3,978 |
3,327 |
19.6 |
Jet fuel |
3,925 |
1,456 |
169.6 |
Naphtha |
1,964 |
1,219 |
61.1 |
Fuel oil (including bunker fuel) |
1,099 |
1,268 |
(13.3) |
Other oil by-products |
4,373 |
3,080 |
42.0 |
Subtotal Oil By-Products |
57,331 |
35,978 |
59.4 |
Natural gas |
5,691 |
4,086 |
39.3 |
Crude oil |
6,418 |
80 |
7,922.5 |
Renewables and nitrogen products |
230 |
34 |
576.5 |
Revenues from non-exercised rights |
462 |
200 |
131.0 |
Electricity |
543 |
2,172 |
(75.0) |
Services, agency and others |
799 |
568 |
40.7 |
Total domestic market |
71,474 |
43,118 |
65.8 |
Exports |
20,620 |
16,103 |
28.1 |
Crude oil |
14,042 |
11,642 |
20.6 |
Fuel oil (including bunker fuel) |
5,904 |
3,624 |
62.9 |
Other oil by-products and other products |
674 |
837 |
(19.5) |
Sales abroad * |
2,209 |
714 |
209.4 |
Total foreign market |
22,829 |
16,817 |
35.7 |
Total |
94,303 |
59,935 |
57.3 |
* Sales revenues from operations outside
of Brazil, including trading and excluding exports.
|
|
|
|
Sales revenues were US$ 94,303 million for
the period Jan-Sep/2022, a 57.3% increase (US$ 34,368 million) when compared to US$ 59,935 million for the period Jan-Sep/2021, mainly
due to:
| (i) | a US$ 21,353 million increase in
domestic oil by-products revenues, of which US$ 22,437 million relates to an increase in average Brent prices, compensated by US$ 1,084
million related to a decrease in volume; and |
| (ii) | a US$ 8,738 million increase in
crude oil revenues, of which US$ 7,367 million relates to an increase in average Brent prices, and US$ 1,371 million relates to an increase
in volume. |
Cost of Sales
US$ million |
Jan-Sep/2022 |
Jan-Sep/2021 |
Change
(%) |
Raw material, products for resale, materials and third-party services * |
(22,868) |
(13,505) |
69.3 |
Depreciation, depletion and amortization |
(7,993) |
(6,770) |
18.1 |
Production taxes |
(11,794) |
(7,962) |
48.1 |
Employee compensation |
(1,239) |
(1,475) |
(16.0) |
Total |
(43,894) |
(29,712) |
47.7 |
* It includes short-term leases and inventory turnover.
Cost of sales was US$ 43,894 million for the
period Jan-Sep/2022, a 47.7% increase (US$ 14,182 million) when compared to US$ 29,712 million for the period Jan-Sep/2021, mainly due
to:
| · | higher acquisition costs of both imported oil and
oil by-products due to higher Brent prices; |
| · | higher production taxes due to higher Brent prices;
and |
| · | higher sales volumes of crude oil. |
Income (Expenses)
US$ million |
Jan-Sep/2022 |
Jan-Sep/2021 |
Change
(%) |
Selling expenses |
(3,638) |
(3,137) |
16.0 |
General and administrative expenses |
(956) |
(870) |
9.9 |
Exploration costs |
(230) |
(538) |
(57.2) |
Research and development expenses |
(613) |
(415) |
47.7 |
Other taxes |
(245) |
(369) |
(33.6) |
Impairment of assets |
(422) |
2,918 |
- |
Other income and expenses, net |
1,690 |
(550) |
- |
Total |
(4,414) |
(2,961) |
49.1 |
Selling expenses were US$ 3,638 million for
the period Jan-Sep/2022, a 16.0% increase (US$ 501 million) compared to US$ 3,137 million for the period Jan-Sep/2021, mainly due to higher
unit cost of freight, higher logistical expenses with offshore trading operations and higher expenses related to natural gas, whose fees
were increased in the period, as provided for in the transport contracts.
General and administrative expenses were US$
956 million for the period Jan-Sep/2022, a 9.9% increase (US$ 86 million) compared to US$ 870 million for the period Jan-Sep/2021,
mainly due to inflation.
Impairment of assets were US$ 422 million for the period Jan-Sep/2022
due to the postponement of the beginning of operations of the Natural Gas Processing Unit (UPGN) of the Gaslub plant in Itaboraí,
permanent shutdown of the P-35 platform in the Marlim field and losses related to divestments of the Golfinho and LUBNOR clusters. In
Jan-Sep/2021, US$ 2,918 million impairment reversals were recognized, mainly due to (i) a US$ 3,262 million reversal arising from producing
properties relating to oil and gas activities in Brazil due to the changes in short-term Brent assumptions; (ii) a US$ 27 million reversal
arising from the decision to use certain equipment that were previously part of platforms P-72 and P-73 in producing fields in the Santos
basin; (iii) a US$ 190 million loss arising from the decision to discontinue the use of P-33 and P-26 platforms in the Marlim field; (iv)
a US$ 90 million loss arising from the approval of the sale of the company Breitener Energética S.A., located in Manaus, in the
state of Amazonas; (v) a US$ 79 million loss arising from the decision to sell the thermoelectric power plants Arembepe, Muryci and Bahia
1, located in Camaçari, in the state of Bahia.
Net finance (expense) income
US$ million |
Jan-Sep/2022 |
Jan-Sep/2021 |
Change
(%) |
Finance income |
1,396 |
555 |
151.5 |
Income from investments and marketable securities (Government Bonds) |
872 |
174 |
401.1 |
Other income, net |
524 |
381 |
37.5 |
Finance expenses |
(2,506) |
(4,270) |
(41.3) |
Interest on finance debt |
(1,786) |
(2,325) |
(23.2) |
Unwinding of discount on lease liabilities |
(961) |
(895) |
7.4 |
Discount and premium on repurchase of debt securities |
(120) |
(1,098) |
(89.1) |
Capitalized borrowing costs |
795 |
747 |
6.4 |
Unwinding of discount on the provision for decommissioning costs |
(394) |
(579) |
(32.0) |
Other finance expenses and income, net |
(40) |
(120) |
(66.7) |
Foreign exchange gains (losses) and indexation charges |
(3,016) |
(4,767) |
(36.7) |
Foreign exchange gains (losses) |
(1) |
(1,956) |
(99.9) |
Reclassification of hedge accounting to the Statement of Income |
(3,597) |
(3,339) |
7.7 |
Monetary restatement of anticipated dividends and dividends payable (*) |
118 |
7 |
1,585.7 |
Recoverable taxes inflation indexation income (**) |
74 |
489 |
(84.9) |
Other foreign exchange gains (losses) and indexation charges, net |
390 |
32 |
1,118.8 |
Total |
(4,126) |
(8,482) |
(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.
Net finance income (expense) was an expense of US$ 4,126 million
for the period Jan-Sep/2022, a decrease of US$ 4,356 million compared to an expense of US$ 8,482 million for the period Jan-Sep/2021,
mainly due to:
| · | foreign exchange losses of US$ 1 million in Jan-Sep/2022,
as compared to US$ 1,956 million loss in Jan-Sep/2021 reflecting a 3% appreciation of the real/US$ exchange rate in Jan-Sep/2022 (09/30/2022:
R$ 5.41/US$, 12/31/2021 R$ 5.58/US$) compared to a 5% depreciation in Jan-Sep/2021 (09/30/2021: R$ 5.44/US$, 12/31/2020: R$ 5.20/US$),
which applied to a lower average net liability exposure to the US$ during Jan-Sep/2022 than in Jan-Sep/2021; |
| · | lower interest on finance debt of US$ 1,786 million
in Jan-Sep/2022, as compared to US$ 2,325 million in Jan-Sep/2021, due to a decrease in the amount of our debt; |
| · | lower discount and premium on repurchase of debt
securities of US$ 120 million in Jan-Sep/2022, as compared to US$ 1,098 million in Jan-Sep/2021, due to lower volume of debt repurchase;
and |
| · | higher income from investments and marketable securities
(Government Bonds) of US$ 872 million in Jan-Sep/2022, as compared to US$ 174 million in Jan-Sep/2021, due to higher average cash balances
and interest rates. |
Income tax expenses
Income tax was an expense of US$ 13,763 million in Jan-Sep/2022,
compared to an expense of US$ 5,970 million in Jan-Sep/2021. The increase was mainly due to higher net income before income taxes (US$
42,242 million of income in Jan-Sep/2022 compared to a US$ 20,280 million income in Jan-Sep/2021), resulting in nominal income taxes computed
based on Brazilian statutory corporate tax rates (34%) of US$ 14,361 million in Jan-Sep/2022 compared to a US$ 6,896 million in Jan-Sep/2021.
Net Income attributable to shareholders of Petrobras
Net income attributable to shareholders of Petrobras was US$
28,378 million for the period Jan-Sep/2022, a US$ 14,139 million increase compared to a net income of US$ 14,239 million for the
period Jan-Sep/2021, mainly due to business performance improvement reflected in our Gross profit (US$ 50,409 million of income in Jan-Sep/2022
compared to a US$ 30,223 million income in Jan-Sep/2021) , led by higher oil prices and increased margins.
CAPITAL EXPENDITURES (CAPEX)
Capital expenditures, or CAPEX, is based on the cost assumptions
and financial methodology adopted in our strategic plans, which includes acquisition of intangible assets and property, plant and equipment,
investment in investees and other items that do not necessarily qualify as cash flows used in investing activities, comprising geological
and geophysical expenses, research and development expenses, pre-operating charges, purchase of property, plant and equipment on credit
and borrowing costs directly attributable to works in progress.
CAPEX (US$ million) |
Jan-Sep/2022 |
Jan-Sep/2021 |
Change (%) |
Exploration and Production (*) |
5,626 |
5,030 |
11.8 |
Refining, Transportation and Marketing |
821 |
673 |
22.0 |
Gas and Power |
251 |
252 |
(0.3) |
Corporate and Other businesses |
274 |
186 |
47.3 |
Total |
6,972 |
6,141 |
13.5 |
(*) In Jan-Sep/2022, there is US$ 892 million of signature
bonus related to the Sépia and Atapu fields.
We invested a total of US$ 6,972 million in Jan-Sep/2022,
of which 80.7% was in the E&P segment, a 13.5% increase when compared to our Capital Expenditures of US$ 6,141 million in Jan-Sep/2021,
mainly due to the impact of the signature bonus for the Sépia and Atapu fields, following the co-participation agreements necessary
to manage the coexisting deposits of the Transfer of Rights Agreement and the Production Sharing Contract (related to the surplus volume)
of these areas. In line with our Strategic Plan, our Capital Expenditures were primarily directed toward investment projects in which
Management believes are most profitable, relating to oil and gas production.
In Jan-Sep/2022, investments in the E&P segment totaled
US$ 5,626 million, mainly concentrated on: (i) signature bonus for the Sépia and Atapu fields (US$ 892 million); (ii) the
development of ultra-deep water production in the Santos Basin pre-salt complex (US$ 1,961 million); (iii) exploratory investments
in the pre-salt and post-salt layers (US$ 377 million), and (iv) development of new projects for the production in deep water of
the post-salt layer (US$ 166 million).
LIQUIDITY AND CAPITAL RESOURCES
US$ million |
Jan-Sep/2022 |
Jan-Sep/2021 |
Adjusted Cash and Cash Equivalents at the beginning of the period |
11,117 |
12,370 |
Government bonds and time deposits with maturities of more than 3 months at the beginning of the period |
(650) |
(659) |
Cash and cash equivalents in companies classified as held for sale at the beginning of the period |
13 |
14 |
Cash and cash equivalents at the beginning of the period |
10,480 |
11,725 |
Net cash provided by operating activities |
36,869 |
28,595 |
Acquisition of PP&E and intangibles assets |
(6,020) |
(4,640) |
Investments in investees |
(20) |
(15) |
Proceeds from disposal of assets – (Divestments) |
3,915 |
2,906 |
Financial compensation from co-participation agreement |
5,334 |
2,938 |
Dividends received |
319 |
294 |
Divestment (Investment) in marketable securities |
(1,615) |
117 |
Net cash provided by (used in) investing activities |
1,913 |
1,600 |
(=) Net cash provided by operating and investing activities |
38,782 |
30,195 |
Proceeds from finance debt |
2,530 |
1,754 |
Repayments of finance debt |
(9,234) |
(22,360) |
Net change in finance debt |
(6,704) |
(20,606) |
Repayment of lease liability |
(4,006) |
(4,381) |
Dividends paid to shareholders of Petrobras |
(33,671) |
(5,828) |
Dividends paid to non-controlling interest |
(68) |
(75) |
Investments by non-controlling interest |
43 |
(11) |
Net cash used in financing activities |
(44,406) |
(30,901) |
Effect of exchange rate changes on cash and cash equivalents |
(482) |
(94) |
Cash and cash equivalents at the end of the period |
4,374 |
10,925 |
Government bonds and time deposits with maturities of more than 3 months at the end of the period |
2,411 |
537 |
Cash and cash equivalents in companies classified as held for sale at the end of the period |
- |
(6) |
Adjusted Cash and Cash Equivalents at the end of the period |
6,785 |
11,456 |
|
|
|
Reconciliation of Free Cash Flow |
|
|
Net cash provided by operating activities |
36,869 |
28,595 |
Acquisition of PP&E and intangibles assets |
(6,020) |
(4,640) |
Free Cash Flow * |
30,849 |
23,955 |
* 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.
As of September 30, 2022, the balance of Cash and cash equivalents
was US$ 4,374 million and Adjusted Cash and Cash Equivalents totaled US$ 6,785 million.
The nine-month period ended September 30, 2022 had net cash
provided by operating activities of US$ 36,869 million and positive free cash flow of US$ 30,849 million. This level of cash generation,
together with proceeds from disposal of assets (divestments) of US$ 3,915 million, financial compensation from co-participation agreements
of US$ 5,334 million and proceeds from finance debt of US$ 2,530 million, were allocated to: (a) debt prepayments and to amortizations
of principal and interest due in the period of US$ 9,234 million; (b) repayment of lease liability of US$ 4,006 million; (c)
dividends paid to shareholders of Petrobras of US$ 33,671 million; (d) acquisition of PP&E and intangibles assets of US$ 6,020
million; and (e) investment in marketable securities of US$ 1,615 million.
The Company repaid several finance debts, in the amount of
US$ 9,234 million, notably US$ 4,962 million to repurchase and withdraw global bonds previously issued by the Company in the
capital market.
In the nine-month period ended September 30, 2022, the Company
raised funds in the amount of US$ 2,530 million, of which (i) US$ 1,244 million through a Sustainability-Linked Loan, in the
international banking market, maturing in 2027, and (ii) US$ 573 million through the issuance of commercial notes in the Brazilian
capital market due in 2030 and 2032.
CONSOLIDATED DEBT
Debt (US$ million) |
09.30.2022 |
12.31.2021 |
Change (%) |
Capital Markets |
16,800 |
22,031
|
(23.7) |
Banking Market |
10,713 |
9,762 |
9.7 |
Development banks |
721 |
769
|
(6.2) |
Export Credit Agencies |
2,452 |
2,951 |
(16.9) |
Others |
169 |
187 |
(9.6) |
Finance debt |
30,855 |
35,700 |
(13.6) |
Lease liabilities |
23,413 |
23,043 |
1.6 |
Gross Debt |
54,268 |
58,743 |
(7.6) |
Adjusted Cash and Cash Equivalents |
6,785 |
11,117 |
(39.0) |
Net Debt |
47,483 |
47,626 |
(0.3) |
Leverage: Net Debt/(Net Debt + Shareholders' Equity) |
41% |
41% |
- |
Average interest rate (% p.a.) |
6.4 |
6.2 |
3.2 |
Weighted average maturity of outstanding debt (years) |
12.04 |
13.39 |
(10.1) |
As of September 30, 2022, the Company’s maintained
its liability management strategy to improve the debt profile and to adapt to the maturity terms of the Company’s long-term investments.
The cash flow generation and continuous liability management
allowed a reduction in our indebtedness. Gross Debt decreased 7.6% (US$ 4,475 million) to US$ 54,268 million on September 30,
2022 from US$ 58,743 million on December 31, 2021. Gross Debt was lower than the US$ 60,000 million target established for 2022,
mainly due to debt prepayments and amortizations.
Net Debt was reduced by 0.3% (US$ 143 million), reaching US$
47,483 million on September 30, 2022, compared to US$ 47,626 million on December 31, 2021.
RECONCILIATION OF EBITDA, LTM ADJUSTED EBITDA, GROSS DEBT/LTM ADJUSTED
EBITDA AND NET DEBT/LTM ADJUSTED EBITDA METRICS
LTM Adjusted EBITDA reflects the sum of the last twelve months
of Adjusted EBITDA, which is computed by using the EBITDA (net income before net finance (expense) income, income taxes, depreciation,
depletion and amortization) adjusted by items not considered part of the Company’s primary business, which include results in equity-accounted
investments, reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments, results on disposal
and write-offs of assets and on remeasurement of investment retained with loss of control, impairment and results from co-participation
agreements in bid areas.
LTM Adjusted EBITDA represents an alternative to the company's operating
cash generation. This measure is used to calculate the metrics Gross Debt/LTM Adjusted EBITDA and Net Debt/LTM Adjusted EBITDA, to support
management’s assessment of liquidity and leverage.
EBITDA, Adjusted EBITDA and Net cash provided
by operating activities – OCF
US$ million |
Jan-Sep/2022 |
Jan-Sep/2021 |
Change (%) |
Net income |
28,479 |
14,310 |
99.0 |
Net finance (expense) income |
4,126 |
8,482 |
(51.4) |
Income taxes |
13,763 |
5,970 |
130.5 |
Depreciation, depletion and amortization |
9,897 |
8,786 |
12.6 |
EBITDA |
56,265 |
37,548 |
49.8 |
Results in equity-accounted investments |
(373) |
(1,500) |
(75.1) |
Impairment of assets |
422 |
(2,918) |
- |
Reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments |
- |
41 |
- |
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control |
(1,138) |
(225) |
405.8 |
Results from co-participation agreements in bid areas |
(2,862) |
(667) |
329.1 |
Adjusted EBITDA |
52,314 |
32,279 |
62.1 |
Income taxes |
(13,763) |
(5,970) |
130.5 |
Allowance (reversals) for credit loss on trade and other receivables |
42 |
(14) |
- |
Trade and other receivables, net |
729 |
(1,487) |
- |
Inventories |
(2,595) |
(2,164) |
19.9 |
Trade payables |
(341) |
850 |
- |
Deferred income taxes, net |
2,239 |
3,998 |
(44.0) |
Taxes payable |
328 |
3,505 |
(90.6) |
Others |
(2,085) |
(2,402) |
(13.2) |
Net cash provided by operating activities – OCF |
36,869 |
28,595 |
28.9 |
LTM EBITDA, LTM Adjusted EBITDA, LTM Net
cash provided by operating activities – OCF
|
US$ million |
|
Last twelve months (LTM) at |
|
|
|
|
|
09.30.2022 |
12.31.2021 |
Oct-Dec/2021 |
Jan-Mar/2022 |
Apr-Jun/2022 |
Jul-Sep/2022 |
Net income |
34,155 |
19,986 |
5,676 |
8,648 |
11,041 |
8,790 |
Net finance (expense) income |
6,610 |
10,966 |
2,484 |
(596) |
3,198 |
1,524 |
Income taxes |
16,032 |
8,239 |
2,269 |
4,566 |
5,309 |
3,888 |
Depreciation, depletion and amortization |
12,806 |
11,695 |
2,909 |
3,170 |
3,460 |
3,267 |
EBITDA |
69,603 |
50,886 |
13,338 |
15,788 |
23,008 |
17,469 |
Results in equity-accounted investments |
(480) |
(1,607) |
(107) |
(350) |
9 |
(32) |
Impairment of assets |
150 |
(3,190) |
(272) |
(1) |
168 |
255 |
Reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments |
- |
41 |
- |
- |
- |
- |
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control |
(2,857) |
(1,944) |
(1,719) |
(476) |
(370) |
(292) |
Results from co-participation agreements in bid areas |
(2,826) |
(631) |
36 |
- |
(2,872) |
10 |
Adjusted EBITDA |
63,590 |
43,555 |
11,276 |
14,961 |
19,943 |
17,410 |
Income taxes |
(16,032) |
(8,239) |
(2,269) |
(4,566) |
(5,309) |
(3,888) |
Allowance (reversals) for credit loss on trade and other receivables |
26 |
(30) |
(16) |
21 |
18 |
3 |
Trade and other receivables, net |
141 |
(2,075) |
(588) |
641 |
(584) |
672 |
Inventories |
(2,765) |
(2,334) |
(170) |
(1,917) |
(117) |
(561) |
Trade payables |
(118) |
1,073 |
223 |
(138) |
(3) |
(200) |
Deferred income taxes, net |
2,299 |
4,058 |
60 |
1,961 |
28 |
250 |
Taxes payable |
1,701 |
4,878 |
1,373 |
1,260 |
543 |
(1,475) |
Others |
(2,778) |
(3,095) |
(693) |
(1,915) |
(23) |
(147) |
Net cash provided by operating activities – OCF |
46,064 |
37,791 |
9,196 |
10,308 |
14,496 |
12,064 |