Release Date: August 09, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Petroleo Brasileiro SA Petrobras (PBR, Financial) reported solid results for Q2 2024, with significant advantages from a tax agreement with the Ministry of Finance.
- The company achieved a 2.4% increase in oil and gas production over the last 12 months, with pre-salt contributing 81% of total volume.
- Petroleo Brasileiro SA Petrobras (PBR) maintained a high refining utilization factor of 91% in Q2 2024, with strong sales of byproducts.
- The company reached its lowest financial debt level since Q3 2008, with a robust cash position of over $13 billion.
- Petroleo Brasileiro SA Petrobras (PBR) announced dividends and interest on own capital for Q2 2024, totaling BRL 14.3 billion, demonstrating strong cash generation and commitment to shareholder returns.
Negative Points
- The company faced a significant exchange rate variation, resulting in a negative impact of USD 2.3 billion due to the depreciation of the Brazilian real versus the US dollar.
- Non-recurring events, including a tax transaction expense of USD 2.1 billion, led to an accounting loss of $300 million for the quarter.
- There were delays in obtaining licenses from Ibama, impacting production and causing a 2% reduction in the production curve for the year.
- Petroleo Brasileiro SA Petrobras (PBR) experienced unforeseen downtimes and incidents at several platforms, affecting production levels.
- The company faces challenges in the global supply chain, with increased demand and competition for resources due to geopolitical events.
Q & A Highlights
Q: What's the company's perspective on paying more extraordinary dividends? Would you wait until the end of the fiscal year or consider payments after the third quarter of 2024?
A: (Fernando Melgarejo, Financial and Investor Relations Officer) The decision to pay dividends considers the company's cash flow and future flow generation capacity, not just the reserve. Extraordinary payments depend on future flows and not the capital compensation reserve. We are assessing the effectiveness of the capital for the buyback program.
Q: What is Petrobras' strategy to supply diesel to Brazil in the third quarter, given the higher demand and reduced shipments from Russia?
A: (Claudio Mastella, Executive Director of Commercialization and Logistics) We have a multi-annual planning strategy that includes allocating maintenance downtimes to periods of lower demand and actively managing inventories. We do not import diesel from Russia, so their prioritization of other markets will not affect our plans.
Q: Can you explain the technical basis for changing the E&P agency and its impact on development programs and costs?
A: (Wagner Victer, Advisor to Chief Executive Officer) The new director has extensive experience and aims to expand the portfolio of reserves. The team is robust, with professionals having long-term experience. We are focused on maintaining safety and efficiency in our operations.
Q: What are the company's expectations for production levels in July and the exit rate for 2024?
A: (Wagner Victer, Advisor to Chief Executive Officer) We are working within the projected levels and expect to remain within the business plan limits. Some downtimes and incidents affected the production curve, but measures are being taken to recover. Positive perspectives include the arrival of new platforms like Almirante Barroso and Maria Quitéria.
Q: What is the rationale for Petrobras potentially buying back RLAM, and what are the expected synergies?
A: (William Da Silva, Chief Refining and Natural Gas Executive Officer) Synergies include logistics, integration with other refineries, and petrochemical exchanges. The due diligence process is ongoing to evaluate economic viability and integration.
Q: How is Petrobras rebuilding its client portfolio in gas and electric power, and what can we expect in the next quarters?
A: (Mauricio Tolmasquim, Chief of Energy Transition and Sustainability) We have a competitive policy to maintain our market share, including new products and performance premiums. We are also focusing on capturing free consumers and participating in upcoming bid tenders for thermal plants.
Q: What are the company's plans for issuing debt and managing liabilities, especially in light of potential M&A activities?
A: (Fernando Melgarejo, Financial and Investor Relations Officer) We are constantly seeking opportunities to optimize our debt levels and maintain efficiency. Any M&A activities will be evaluated for their impact on our balance sheet and overall financial strategy.
Q: What initiatives are being discussed to structurally reduce gas prices in Brazil?
A: (Mauricio Tolmasquim, Chief of Energy Transition and Sustainability) Increasing the supply of cheaper gas through projects like ROTA 3 and potential imports from Argentina and Bolivia are key strategies. We have already reduced gas prices by 25% last year and continue to seek competitive gas supply options.
Q: What is the minimum share Petrobras would consider for the Namibia assets, and are there other assets in the region being considered?
A: (Fernando Melgarejo, Financial and Investor Relations Officer) We do not discuss specific cases, but we are interested in exploring any opportunities that generate value for our shareholders. We will only join deals that are economically feasible and create synergy.
Q: What is the company's approach to maintaining the integrity of pre-salt platforms that have been producing for over 10 years?
A: (Magda Chambriard, Chief Executive Officer) We have a robust system for managing reserves, including flexibility in injection methods and close monitoring. We are reinforcing our teams with experienced engineers and investing in advanced seismic analysis to ensure the longevity and efficiency of our operations.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
