Petrobras’ net earnings amounted to R$4.8 billion in 1H 2017, reversing the loss recorded in the same period of last year and reflecting an improvement in the company’s operating performance, despite lower sales of oil products in the Brazilian market.
The positive result was attained due to growth in export revenue, arising from larger oil volumes and prices, as well as lower sales, general and administrative expenses and lower spending on imports of oil, oil products and natural gas, plus a gain from selling off a stake in Nova Transportadora do Sudeste (NTS). On the other hand, the company incurred spending by signing up for the PRT and PERT tax amnesty programs, and royalty payments were higher because of the increase in the Brent oil price.
In 1H 2017, Petrobras’ total output of oil and natural gas was 2.791 million barrels of oil equivalent per day (boed), including 2.671 million boed in Brazil, up 6% from 1H 2016. In May, Platform P-66 started up in the Lula South area, in the Santos Basin pre-salt, and in June we achieved a new monthly oil and gas production record in pre-salt fields operated by us, of 1.686 million boed.
Sales of oil products in the domestic market were impacted by a reduction in demand and stronger competition with other players. They totaled 1.943 million bpd, down 7% from 1H 2016. The company maintained its position as a net exporter from Brazil, exporting a net 401,000 bpd, due to a 48% increase in exports of oil and oil products and a 25% reduction in imports compared with 1H 2016. The increase in domestic oil’s share of the volume processed in Brazil contributed to the decline in imports.
The company’s free cash flow was R$22.7 billion in 1H 2017 and R$9.3 billion in 2Q 2017. Because of continued active debt management, company managed to extend the average debt term from 7.46 years on December 31, 2016 to 7.88 years on June 30, 2017, and to reduce our net debt in US dollars by 7%, from US$96.4 billion on December 31, 2016 to US$89.3 billion on June 30, 2017.
Adjusted EBITDA was R$44.3 billion in 1H 2017, up 6% from the same period of last year, and adjusted EBITDA divided by total revenue was 33%. In the last quarter, adjusted EBITDA was R$19.1 billion. Consequently, net debt divided by adjusted EBITDA – one of the targeted metrics in Petrobras’ Business and Management Plan – fell from 3.54 on December 31, 2016 to 3.23 on June 30, 2017.
The company had 63,152 employees as of June 30, 2017, down 18% from the total on June 30, 2016, as a result of Plan to Encourage Voluntary Severance. PWKD11082017
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