• Recurring EBITDA: $11.6 billion.
• Net Income: $5.9 billion.
• Cash Generation: $11.3 billion, a 24% increase quarter-on-quarter.
• Free Cash Flow: $6.9 billion.
• Gross Debt: $59.1 billion.
• Financial Debt: $25.8 billion, the lowest level since 2008.
• Investments: $4.5 billion, about 30% above the previous quarter.
• Total Investments Year-to-Date: $10.9 billion.
• Dividends and Interest on Capital: Approved at 17.1 billion reals.
• Taxes Paid: 64.4 billion reals.
• Compensation per Share: 1.32 reals per share, to be paid in two installments.

• Warning! GuruFocus has detected 4 Warning Sign with PBR.

Release Date: November 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Petroleo Brasileiro SA Petrobras (NYSE:PBR) achieved record production levels, reaching 3 billion barrels in Merrill and peak production at Sepetiba FBSO in less than eight months.
• The company maintained a high operational utilization rate of 95% for the quarter, reaching 97% in September, while achieving the best historical level of greenhouse gas emissions in its refining park.
• Petroleo Brasileiro SA Petrobras (NYSE:PBR) increased sales of byproducts in the Midwest and formed a partnership with Vale to test low-carbon products, including diesel with 5% renewable content.
• The company is ready to start commercial operations at its natural gas production unit in Rio, which will increase the supply of natural gas in Brazil, starting at 50% capacity and reaching 21 million cubic meters per day by year's end.
• Petroleo Brasileiro SA Petrobras (NYSE:PBR) returned to the TOP10 ranking of companies people want to work for, indicating successful talent attraction and retention strategies.

Negative Points

• The company faced a decline in Brent oil prices and reduced diesel margins, impacting financial performance despite increased byproduct sales.
• Petroleo Brasileiro SA Petrobras (NYSE:PBR) experienced both scheduled and unscheduled downtimes, particularly in the Santos Basin, affecting production levels.
• There is a noted mismatch between physical and financial advances in CapEx projects, although improvements are underway to align these aspects better.
• The company is operating with a cash position significantly above its $8 billion benchmark, raising questions about the intention to reduce surplus cash.
• Petroleo Brasileiro SA Petrobras (NYSE:PBR) faces challenges in leasing FPSO vessels, which has delayed some projects, and is working on new strategies to address these issues.

Q & A Highlights

Q: Can you provide more details on Q3 production levels and the impact of shutdowns? What is the outlook for production moving forward? A: Sylvia Anjos, Executive Officer for Exploration and Production, explained that the year was atypical with both scheduled and unscheduled downtimes, particularly in the Santos Basin. Scheduled downtimes are necessary for maintenance and safety, while unscheduled ones can be due to various reasons, including regulatory mandates. Despite these, production is expected to increase, with strategic investments in exploration and new fields.

Q: How is Petrobras addressing the mismatch between physical and financial advances in CapEx? A: Renata Baruzzi, Executive Officer for Engineering, Technology and Innovation, stated that improvements have been implemented to align physical and financial advancements. This has resulted in better accomplishments this quarter, and the company is confident in meeting future plans.

Q: What is Petrobras' strategy regarding surplus cash and its cash position? A: Fernando Melgarejo, Financial and Investor Relations Officer, mentioned that Petrobras operates with a cash position above the $8 billion benchmark due to the nature of its long-term projects. The company is exploring scenarios to optimize cash use and may adjust its cash strategy by November 21.

Q: Can you update us on the status of the Pilatus Basin and its exploration efforts? A: Sylvia Anjos highlighted that Petrobras is acquiring seismic data for the Pilatus Basin, a large region with significant potential. The data will be interpreted to identify favorable areas for drilling, with investments part of the $7.5 billion exploration budget for 2024-2028.

Q: What are the plans for extraordinary dividends and shareholder compensation? A: Fernando Melgarejo indicated that decisions on extraordinary dividends will align with the strategic plan, considering short, mid, and long-term volumes. If the strategic plan is approved by November 21, distributions could occur by the end of December.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.