pbr-6k_20180803.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of the

Securities Exchange Act of 1934

 

For the month of August, 2018

 

Commission File Number 1-15106

 

 

PETRÓLEO BRASILEIRO S.A. - PETROBRAS

(Exact name of registrant as specified in its charter)



Brazilian Petroleum Corporation - PETROBRAS

(Translation of Registrant's name into English)



Avenida República do Chile, 65 
20031-912 - Rio de Janeiro, RJ
Federative Republic of Brazil

(Address of principal executive office)


Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. 

Form 20-F ___X___ Form 40-F _______

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes _______ No___X____

 

 

 

 

 


FINANCIAL REPORT

 

Rio de Janeiro

August 3rd, 2018

1H-2018 Results*:

Derived from unaudited consolidated interim financial information reviewed by independent auditors, stated in millions of U.S. dollars, prepared in accordance with International Financial Reporting Standards - IFRS issued by the International Accounting Standards Board - IASB.

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, and the presentation currency of the Petrobras Group is the U.S. dollar. Therefore, financial records are maintained in Brazilian reais and income and expenses are translated into U.S. dollars using the average exchange rates prevailing during the period, as set out in IAS 21 – “The effects of foreign exchanges rates”.

When the Brazilian real appreciates relative to the U.S. dollar, the effect is to generally increase both revenues and expenses when expressed in U.S. dollars. When the Brazilian real depreciates relative to the U.S. dollar, the effect is to generally decrease revenues and expenses when expressed in U.S. dollars. In 1H-2018, the average Brazilian real depreciated by 8% in relation to U.S. dollar when compared to 1H-2017. The foreign translation effects on the Company’s results are shown in item VII - Foreign exchange translation effects on results of operations in 1H-2017.

Gross Profit

Gross profit was US$ 17,025 million in 1H-2018, a 20% increase compared to US$ 14,205 million in 1H-2017, mainly due to higher margins of oil exports, as a result of the increase in Brent prices, and to higher margin in the domestic sales of oil products. On the other hand, exports and domestic sales volumes of oil products dropped (mainly naphtha and gasoline). Gross Margin** was 37% in 1H-2018, versus 33% in 1H-2017.

Operating income and expenses

Operating income was US$ 10,114 million in 1H-2018, a 10% increase from US$ 9,196 million in 1H-2017 mainly due to the rise in gross profit, being negatively impacted by higher sale expenses, derived from the payment of tariffs to the third-party gas pipeline company Nova Transportadora do Sudeste S.A. (NTS), which used to be a subsidiary before the sale in 2Q-2017, by the losses with the fair value adjustment of the put option acquired to hedge the price of part of the oil production, by the foreign exchange losses on Class Action outstanding balance and by lower gains with divestments, when compared to 1H-2017. On the other hand, there was a decrease in tax expenses.

Net Finance Income (Expense)

The net finance expense was US$ 2,969 in 1H-2018 million, a 43% decrease compared to US$ 5,212 million in 1H-2017 as a result of lower financing expenses, due to prepayment of debt and of the renegotiation of debts with Eletrobras System.

Net income (loss) attributable to the shareholders of Petrobras

Net income attributable to the shareholders of Petrobras was US$ 4,939 million in 1H-2018, a 226% increase compared to US$ 1,513 million in 1H-2017. The result improved mainly due to increase in domestic oil products and oil exports margins and to the drop in net finance expenses.

Adjusted EBITDA**

Adjusted EBITDA increased to US$ 16,285 million in 1H-2018, from US$ 13,964 million in 1H-2017. The Adjusted EBITDA Margin** reached 35% in 1H-2018 compared to 33% in 1H-2017.

Net cash provided by operating activities and Free Cash Flow **

Free cash flow was US$ 8,546 million in 1H-2018, an increase of 19% when compared to US$ 7,157 million in 1H-2017.

 

*

Additional information about operating results of 1H-2018 x 1H-2017, see “Additional Information” item II.

**

See definitions of Free Cash Flow, Gross Margin, Adjusted EBITDA and Adjusted EBITDA Margin in glossary and the respective reconciliations in Liquidity and Capital Resources and Reconciliation of Adjusted EBITDA.

2

 

 

 


 

Table of Contents

I. Summary Financial Information and Consolidated Economic Indicators

II. Results of Operations of 1H-2018 compared to1H-2017

III. Results by Business Segment

a) Exploration and Production

b) Refining, Transportation and Marketing

c) Gas & Power

d) Distribution

IV. Liquidity and Capital Resources

V. Consolidated Debt

VI. Reconciliation of Adjusted EBITDA

VII. Foreign Exchange Translation Effects on Results of Operations of 1H-2018

VIII. Unaudited Financial Statements

IX. Segment Information

X. Glossary

 

 

 

 

 

www.petrobras.com.br/ir

Contacts:

PETRÓLEO BRASILEIRO S.A. – PETROBRAS

Investor Relations Department

E-mail: petroinvest@petrobras.com.br / acionistas@petrobras.com.br

Av. República do Chile, 65 – 1002  – 20031-912 – Rio de Janeiro, RJ

Phone: 55 (21) 3324- 1510 / 9947 I 0800-282-1540

B3:  PETR3, PETR4

NYSE: PBR, PBRA

BCBA: APBR, APBRA

LATIBEX: XPBR, XPBRA

 

This release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are subject to risks and uncertainties. The forward-looking statements, which address the Company’s expected business and financial performance, among other matters, contain words such as “believe,” “expect,” “estimate,” “anticipate,” “optimistic,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely,” and similar expressions. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. There is no assurance that the expected events, trends or results will actually occur. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or for any other reason.

 

The Company’s actual results could differ materially from those expressed or forecast in any forward-looking statements as a result of a variety of assumptions and factors. These factors include, but are not limited to, the following: (i) failure to comply with laws or regulations, including fraudulent activity, corruption, and bribery; (ii) the outcome of ongoing corruption investigations and any new facts or information that may arise in relation to the “Lava Jato Operation”; (iii) the effectiveness of the Company’s risk management policies and procedures, including operational risk; and (iv) litigation, such as class actions or proceedings brought by governmental and regulatory agencies.  A description of other factors can be found in the Company’s Annual Report on Form 20-F for the year ended December 31, 2015, and the Company’s other filings with the U.S. Securities and Exchange Commission.

 

3

 

 

 


 

I. Summary financial information and Consolidated Economic Indicators

 

US$ million

 

Jan-Jun

 

2018

2017

(%)

Sales revenues

46,365

42,560

9

Gross profit

17,025

14,205

20

Operating expenses

(6,911)

(5,009)

(38)

Operating income (loss)

10,114

9,196

10

Net finance income (expense)

(2,969)

(5,212)

43

Consolidated net income (loss) attributable to the shareholders of Petrobras

4,939

1,513

226

Basic and diluted earnings (losses) per share attributable to the shareholders of Petrobras

0.38

0.12

217

Adjusted EBITDA *

16,285

13,964

17

Adjusted EBITDA margin* (%)

35

33

2

Gross margin* (%)

37

33

4

Operating margin* (%)

22

22

Net margin* (%)

11

4

7

Total capital expenditures *

6,205

7,230

(14)

Exploration & Production

5,452

5,754

(5)

Refining, Transportation and Marketing

440

589

(25)

Gas & Power

171

767

(78)

Distribution

57

47

21

Biofuel

9

11

(18)

Corporate

76

62

23

Average commercial selling rate for U.S. dollar (R$/U.S.$)

3.42

3.18

8

Period-end commercial selling rate for U.S. dollar (R$/U.S.$)

3.86

3.31

17

Variation of the period-end commercial selling rate for U.S. dollar (%)

16.60

1.50

15

Domestic basic oil products price (U.S.$/bbl)

79.95

70.39

14

Brent crude (U.S.$/bbl)

70.55

51.81

36

Domestic Sales price

 

 

 

Crude oil (U.S.$/bbl)

65.00

48.98

33

Natural gas (U.S.$/bbl)

40.09

37.61

7

International Sales price

 

 

 

Crude oil (U.S.$/bbl)

63.07

45.03

40

Natural gas (U.S.$/bbl)

25.70

19.94

29

Total sales volume (Mbbl/d)***

 

 

 

Diesel

717

712

1

Gasoline

472

536

(12)

Fuel oil

42

53

(21)

Naphtha

94

145

(35)

LPG

228

231

(1)

Jet fuel

106

99

7

Others

164

167

(2)

Total oil products

1,823

1,943

(6)

Ethanol, nitrogen fertilizers, renewables and other products

64

105

(39)

Natural gas

345

335

3

Total domestic market

2,232

2,383

(6)

Crude oil, oil products and other exports

639

720

(11)

International sales **

243

239

2

Total international market

882

959

(8)

Total

3,114

3,342

(7)

*

 

*

See definition of Capital Expenditures, Adjusted EBITDA, Adjusted EBITDA Margin, Gross Margin, Operating Margin and Net Margin in glossary and the reconciliation in Reconciliation of Adjusted EBITDA.

**

Sales from operations outside of Brazil, including trading and excluding exports.

***

Not reviewed by independent auditors.

4

 

 

 


 

 

 

II. Results of Operations of 1H-2018  compared to 1H-2017

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, as set out in IAS 21 – “The effects of foreign exchanges rates”. For detailed information about foreign exchange translation effects on the Company’s income statement, see item VII “Foreign exchange translation effects on results of operations of 1H-2018”.

Sales revenues were US$ 46,365 million in 1H-2018, a  9% increase (US$ 3,805 million) when compared to US$ 42,560 million in 1H-2017, mainly due to:

Higher export revenues (US$ 1,404 million), driven by increase in international prices of crude oil and oil products, partially offset by the decrease in crude oil volume exported;

 

Higher domestic revenues (US$ 1,523 million), mainly as a result of:

 

Higher oil products revenues (US$ 2,004 million), mainly reflecting an increase in average realization prices of diesel, gasoline and liquefied petroleum gas in accordance with their price policies, as well as higher prices of other oil products following the increase in international prices. These effects were partially offset by the decrease in oil products sales volume, mainly for gasoline due to a higher portion of ethanol in fuel market, as well as lower sales of naphtha to Braskem;

 

Higher revenues of natural gas (US$ 258 million), due to increase in prices; and

 

Decreased electricity revenues when expressed in U.S. dollars (US$ 367 million), following lower prices.

 

Higher revenues from operations abroad (US$ 878 million) following higher international prices.

Cost of sales was US$ 29,340 million in 1H-2018, a 3% increase (US$ 985 million) compared to US$  28,355 million in 1H-2017, mainly due to:

Foreign exchange translation effects which decreased the average cost of sales when expressed in U.S. dollars, reflecting the depreciation of the average Brazilian real;

Higher production taxes expenses and crude oil import costs, due to higher international prices;

Increased costs from operations abroad, following higher international prices; and

Lower oil products import costs, mainly for naphtha and gasoline, as a result of lower sales volume in the domestic market.

 

Selling expenses were US$ 2,590  million in 1H-2018, a 32%  increase (US$ 621  million) compared to US$ 1,969 million in 1H-2017, mainly due to:

 

Higher transportation charges, due to the payment of tariffs for the use of third parties gas pipelines, following the sale of Nova Transportadora do Sudeste (NTS) in  April 2017; and

The increased impairment of trade and other receivables, primarily relating to companies from the electricity sector.

General and administrative expenses were US$ 1,272 million in 1H-2018, a  11% decrease (US$ 152  million) compared to US$ 1,424  million in 1H-2017, mainly due to lower expenses with outsourced administrative services.

Exploration costs were US$ 298 million in 1H-2018, a 6% increase (US$ 17 million) compared to US$ 281 million in 1H-2017, mainly due to higher provisions related to contractual penalties of local content requirements (US$ 60 million), partially offset by lower exploration expenditures as dry hole (US$ 36 million).

 

Other taxes were US$ 248 million in 1H-2018, a US$ 798 million decrease compared to US$ 1,046 million in 1H-2017, mainly as a result of the Company’s decision, in  2Q-2017, to benefit from the Tax Settlement Programs (US$ 714 million) and from the State Tax Amnesty Program (US$ 40 million).

Other income and expenses totaled US$ 2,186 million in expenses in 1H-2018, a US$ 2,175 million increase compared to the US$ 11 million in expenses in 1H-2017, mainly due to:

Lower net gain on the sale and write-off of assets of US$ 1,077 million, mainly driven by the US$ 1,952 million gain on sale of interests in NTS recognized in 1H-2017, partially offset by the gains, in 1H-2018, on sale of Lapa and Iara fields (US$ 689 million) and by the contingent payment received for the disposal of Carcará (US$ 300 million);

Lower fair value of commodities put options related to the hedge of part of crude oil production (US$ 564 million);

Higher losses on legal proceedings (US$ 476 million), mainly impacted by foreign exchange losses over the Class Action net provision (US$ 441 million); and

Lower unscheduled stoppages and pre-operating expenses (US$ 297 million), mainly from equipment idleness.

 

Net finance expense (income) was US$ 2,969 million in 1H-2018, a 43% decrease (US$ 2,243 million) when compared to US$ 5,212 million in 1H-2017, mainly due to:

 

Lower net finance expenses (US$ 1,729 million), mainly due to:

 

(i)

Gains arising from the renegotiation of debts from Eletrobras Group (US$ 580 million);

 

(ii)

Finance charges due to the Company’s decision to benefit from the Tax Settlement Programs (Programas de Regularização de Tributos Federais) in the 1H-2017 (US$ 520 million); and

 

(iii)

Lower interest expenses, due to pre-payment of debts.

 

Lower foreign exchange and inflation indexation charges (US$ 514 million) generated by:

 

(i)

Foreign exchange gains of US$ 24 million driven by the impact of a 2.7% appreciation of the U.S. dollar against the Euro on the Company’s net debt in 1H-2018, compared to the foreign exchange losses of US$ 458 million driven by the impact of a 8.2% depreciation on the Company’s net debt in Euro in 1H-2017 (US$ 482 million);

 

(ii)

Higher depreciation of the Brazilian real against the U.S. dollars on the Company’s net positive exposure, compared to the 1H-2017 (US$ 236 million);

 

(iii)

Foreign exchange losses of US$ 30 million driven by the impact of a 2.4% appreciation of the U.S. dollar against the Pound Sterling over the net positive exposure in Pound Sterling in 1H-2018, compared to the foreign exchange losses of US$ 56 million due to the 4.9%  depreciation on the net debt in 1H-2017 (US$ 26  million);

 

(iv)

Lower negative exposure in Brazilian reais compared to the Euro generated foreign exchange gain of US$ 16 million;

 

(v)

Higher recycling of foreign exchange losses from equity to net income due to occurred exports designated for cash flow hedge accounting (US$ 99 million); and

 

(vi)

Higher expenses from other inflation indexation charges and foreign exchange losses (US$ 147 million).

 

Positive results in equity-accounted investments of US$ 244 million in 1H-2018, a 37% decrease (US$ 142 million) compared to US$ 386 million in 1H-2017, mainly due to lower results in associates of the petrochemical sector.

Income taxes expenses were US$ 2,505 million in 1H-2018, a 9% decrease (US$ 246 million) compared to US$ 2,751 million in 1H-2017, as a result of the Company’s decision, in the 2Q-2017, to benefit from the Tax Settlement Programs (Programas de Regularização de Tributos Federais), offset by higher taxable income of the period. For more information about income taxes expenses, see Note 19.6 to the Company´s unaudited interim consolidated financial statements.

Loss related to non-controlling interests were US$ 55 million in 1H-2018, a US$ 161 million decrease compared to the US$ 106 million gain in 1H-2017, mainly reflecting the impact of the foreign exchange depreciation of the Brazilian real on debt of structured entities in U.S. dollars, partially offset by the positive result of BR Distribuidora, which has not been a wholly-owned subsidiary since December 2017.

 

 

 

5

 

 

 


 

 

 

III. RESULT BY BUSINESS SEGMENT*

Exploration & Production Summary financial information and Main Indicators

 

US$ million

 

Jan-Jun

 

2018

2017

(%)

Sales revenues

25,933

20,459

27

Brazil

25,413

19,999

27

Abroad

520

460

13

Gross profit

10,903

7,007

56

Brazil

10,657

6,855

55

Abroad

246

152

62

Operating expenses

(652)

(1,645)

60

Brazil

(570)

(1,319)

57

Abroad

(82)

(326)

75

Operating income (loss)

10,251

5,362

91

Brazil

10,087

5,536

82

Abroad

164

(174)

194

Net income (Loss) attributable to the shareholders of Petrobras

6,775

3,579

89

Brazil

6,659

3,651

82

Abroad

116

(72)

261

Adjusted EBITDA of the segment**

14,435

10,336

40

Brazil

14,095

10,322

37

Abroad

340

14

2329

EBITDA margin of the segment (%)**

56

51

5

Capital expenditures ** of the segment

5,452

5,754

(5)

 

 

 

 

Average Brent crude (US$/bbl)

70.55

51.81

36

 

 

 

 

Sales price - Brazil

 

 

 

Crude oil (US$/bbl)

65.00

48.98

33

Sales price - Abroad

 

 

 

Crude oil (US$/bbl)

63.07

45.03

40

Natural gas (US$/bbl)

25.70

19.94

29

Crude oil and NGL production  (Mbbl/d)***

2,134

2,237

(5)

Brazil

2,074

2,171

(4)

Abroad

39

42

(7)

Non-consolidated production abroad

21

24

(13)

Natural gas production (Mbbl/d)***

535

554

(3)

Brazil

498

500

Abroad

37

54

(31)

Total production

2,669

2,791

(4)

 

 

 

 

Lifting cost - Brazil (US$/barrel)

 

 

 

excluding production taxes

11.10

11.02

1

including production taxes

24.01

19.54

23

 

 

 

 

Lifting cost – abroad without production taxes (US$/barrel)

5.40

5.12

5

 

 

 

 

Production taxes - Brazil

5,484

3,651

50

Royalties

2,435

1,878

30

Special participation charges

3,023

1,743

73

Rental of areas

26

30

(13)

Production taxes - Abroad

10

15

(33)

 

 

 

 

*

Biofuels and Corporate segments are disclosed only in segment information tables.

**

See definition of Capital Expenditures, Adjusted Ebitda and Adjusted Ebitda Margin in Glossary and  reconciliation in Reconciliation of Consolidated Adjusted EBITDA Statement by Segment.

***

Not reviewed by independent auditors.

**

 

6

 

 

 


 

 

 

a) EXPLORATION & PRODUCTION (E&P)

 

 

1H-2018 x 1H-2017

 

Gross Profit

 

Gross profit rose due to higher oil prices, partially offset by the reduction of production and increase in production taxes.

 

Operating income and expense

 

Operating income was higher due to increase in gross profit and to gains with the sale of Exploration & Production assets (Lapa, Iara and Carcará) as well as to the lower equipment idleness .

 

Operating Performance

 

Production

Crude oil, NGL and natural gas production reduced, mainly due to the sale of Lapa and Roncador fields, the natural decline of the production, the end of the Extended Well Test of Itapu field on Santos Basin and the production stoppage in Hadrian South field, in the U.S..

 

Lifting Cost

 

Lifting cost increased mainly as a result of the drop in production and well interventions.

Additionally, higher production taxes were caused by rise in oil prices.

 

7

 

 

 


 

 

 

Refining, Transportation and Marketing Summary financial information and Main Indicators

 

 

US$ million

 

Jan-Jun

 

2018

2017

(%)

Sales revenues

35,207

33,091

6

Brazil (includes trading operations abroad)

36,500

33,849

8

Abroad

1,558

889

75

Eliminations

(2,851)

(1,647)

(73)

Gross profit

4,448

4,409

1

Brazil

4,413

4,441

(1)

Abroad

35

(32)

209

Operating expenses

(1,272)

(1,295)

2

Brazil

(1,260)

(1,268)

1

Abroad

(12)

(27)

56

Operating income (loss)

3,176

3,114

2

Brazil

3,154

3,173

(1)

Abroad

22

(59)

137

Net income (loss) attributable to the shareholders of Petrobras

2,399

2,370

1

Brazil

2,384

2,409

(1)

Abroad

15

(39)

138

Adjusted EBITDA of the segment *

4,258

4,388

(3)

Brazil

4,206

4,418

(5)

Abroad

52

(30)

273

EBITDA margin of the segment (%)*

12

13

(1)

Capital expenditures * of the segment

440

589

(25)

Domestic basic oil products price  (US$/bbl)

79.95

70.39

14

Imports (Mbbl/d)**

266

316

(16)

Crude oil import

131

116

13

Diesel import

25

5

 

Gasoline import

5

10

(50)

Other oil product import

105

185

(43)

Exports (Mbbl/d)**

638

717

(11)

Crude oil export

462

548

(16)

Oil product export

176

169

4

Exports (imports), net

372

401

(7)

Refining Operations - Brazil (Mbbl/d)**

 

 

 

Output of oil products

1,759

1,805

(3)

Reference feedstock 

2,176

2,176

Refining plants utilization factor (%) 

76

77

Feedstock processed (excluding NGL)

1,661

1,686

(1)

Feedstock processed

1,717

1,735

(1)

Domestic crude oil as % of total feedstock processed

94

94

Refining Operations - Abroad (Mbbl/d)**

 

 

 

Total feedstock processed

110

84

31

Output of oil products

106

86

23

Reference feedstock 

100

100

Refining plants utilization factor (%) 

102

79

23

Refining cost - Brazil

 

 

 

Refining cost (US$/barrel)

2.64

2.95

(11)

Refining cost - Abroad (US$/barrel)

4.51

4.53

Sales volume** (includes sales to BR Distribuidora and third-parties)

 

 

 

Diesel

648

656

(1)

Gasoline

408

465

(12)

Fuel oil

42

57

(26)

Naphtha

94

145

(35)

LPG

228

231

(1)

Jet fuel

120

112

7

Others

181

183

(1)

Total domestic oil products (Mbbl/d)

1,720

1,849

(7)

 

 

*

See definition of Capital Expenditures, Adjusted Ebitda and Adjusted Ebitda Margin in Glossary and  reconciliation in Reconciliation of Consolidated Adjusted EBITDA Statement by Segment.

**

Not reviewed by independent auditors.


8

 

 

 


 

 

 

b) REFINING, TRANSPORTATION AND MARKETING (RTM)

 

 

1H-2018 x 1H-2017

 

Gross Profit

 

Gross profit had a slight increase due to foreign exchange translation effects and to higher sales margins of oil products as a consequence of the stock realization at lower prices. On the other hand, there was lower sales volumes.

 

Operating Income and expense

 

Operating income increased due to the higher gross profit.

 

Operating Performance

 

Imports and Exports of Crude Oil and Oil Products

 

Net crude oil exports decreased as a result of reduction in production.

Net oil products exports were due to loss of gasoline market share to the ethanol and reduction in naphtha sales to Braskem.  

 

Refining Operations

 

Processed feedstock was lower, mainly due to loss of gasoline market share to the ethanol.

 

Refining Cost

 

Refining cost dropped mainly reflecting cost efficiencies.

9

 

 

 


 

 

 

Gas & Power Summary financial information and Main Indicators

 

US$ million

 

Jan-Jun

 

2018

2017

(%)

Sales revenues

5,719

5,330

7

Brazil

5,698

5,314

7

Abroad

21

16

31

Gross profit

1,802

1,567

15

Brazil

1,802

1,566

15

Abroad

1

(100)

Operating expenses

(1,389)

1,100

(226)

Brazil

(1,383)

1,112

(224)

Abroad

(6)

(12)

50

Operating income (loss)

413

2,667

(85)

Brazil

419

2,678

(84)

Abroad

(6)

(11)

45

Net income (Loss) attributable to the shareholders of Petrobras

222

1,756

(87)

Brazil

237

1,749

(86)

Abroad

(15)

7

(314)

Adjusted EBITDA of the segment *

765

992

(23)

Brazil

769

996

(23)

Abroad

(4)

(4)

EBITDA margin of the segment (%) *

13

19

(6)

 

 

 

 

Capital expenditures * of the segment

171

767

(78)

 

 

 

 

Physical and financial indicators**

 

 

 

Electricity sales (Free contracting market - ACL) - average MW

888

778

14

Electricity sales (Regulated contracting market - ACR) - average MW

2,788

3,058

(9)

Generation of electricity - average MW

2,108

2,351

(10)

Electricity price in the spot market - Differences settlement price (PLD) - US$/MWh

69

69

Domestic natural gas available (Mbbl/d)

321

334

(4)

Imports of LNG (Mbbl/d)***

22

17

29

Imports of natural gas (Mbbl/d)

141

132

7

 

 

 

 

 

 

*88

 

 

 

 

 

*

See definition of Capital Expenditures, Adjusted Ebitda and Adjusted Ebitda Margin in Glossary and  reconciliation in Reconciliation of Consolidated Adjusted EBITDA Statement by Segment.

**

Not reviewed by independent auditors.

***

Imports of regasified LNG have been considered as from the RMF 2Q-2018. Until the RMF 1Q-2018, it considered imports of LNG, regardless of its regasification within the analyzed period.

 

 

10

 

 

 


 

 

 

c) GAS & POWER (G&P)

 

 

1H-2018 x 1H-2017

 

Gross Profit

 

Gross profit increased due to growth of natural gas prices.

 

Operating income and expense

 

Operating income decreased due to higher selling expenses resulting from the payment of tariffs for the use of gas pipelines, to the provision for expected credit losses in the gas supply to the thermoelectric segment in the North region, as well as to the gain with the sale of Company’s interest in NTS in the 2Q17.

 

Operating Performance

 

Physical and Financial Indicators

 

Increased imports of Bolivian natural gas and LNG due to lower domestic gas availability.

There was an increase in electricity sales in the Free Contracting Environment (ACL) due to short-term market opportunities. The volume reduction in the Regulated Contracting Environment (RCA) is due to the termination of contracts with the thermoelectric plants.

The volume of energy generation showed a small drop as a result of a higher acquisition cost of the gas.

 

 

11

 

 

 


 

 

 

Distribution Summary financial information and Main Indicators

 

US$ million

 

Jan-Jun

 

2018

2017

(%)

Sales revenues

14,063

12,966

8

Brazil

13,326

12,294

8

Abroad

737

672

10

Gross profit

866

902

(4)

Brazil

810

847

(4)

Abroad

56

55

2

Operating expenses

(623)

(614)

(1)

Brazil

(587)

(587)

Abroad

(36)

(27)

(33)

Operating income (loss)

243

288

(16)

Brazil

226

260

(13)

Abroad

17

28

(39)

Net Income (Loss) attributable to the shareholders of Petrobras

118

190

(38)

Brazil

106

172

(38)

Abroad

12

18

(33)

Adjusted EBITDA of the segment *

311

358

(13)

Brazil

287

330

(13)

Abroad

24

28

(14)

EBITDA margin of the segment (%)*

2

3

(1)

 

 

 

 

Capital expenditures * of the segment

57

47

21

 

 

 

 

Sales Volumes - Brazil (Mbbl/d)**

 

 

 

Diesel

290

290

Gasoline

168

190

(13)

Fuel oil

31

42

(26)

Jet fuel

53

50

5

Others

77

86

(10)

Total domestic oil products

619

659

(6)

 

 

***

 

 

 

 

 

 

*

See definition of Capital Expenditures, Adjusted Ebitda and Adjusted Ebitda Margin in Glossary and  reconciliation in Reconciliation of Consolidated Adjusted EBITDA Statement by Segment.

**

Not reviewed by independent auditors.

 

12

 

 

 


 

 

 

d) DISTRIBUTION

 

 

1H-2018 x 1H-2017

 

Gross Profit

 

The decrease in gross profit was due to the foreign exchange translation effects. In Brazilian reais gross profit increased due to higher sales margins, partially offset by lower volumes.

 

Operating income and expense

 

The decrease in operating income reflected the provisioning for expenses with the resuming of voluntary separation plan in 2018, compared to the reversions in 2017 of provisions made in 2016, related to employees that quit the program.

 

 

13

 

 

 


 

 

 

IV. Liquidity and Capital Resources

 

U.S.$ million

 

Jan-Jun

 

2018

2017

Adjusted cash and cash equivalents* at the beginning of period

24,404

21,989

Government bonds and time deposits with maturities of more than 3 months at the beginning of period

(1,885)

(784)

Cash and cash equivalents at the beginning of period

22,519

21,205

Net cash provided by (used in) operating activities

13,948

13,492

Net cash provided by (used in) investing activities

204

(3,575)

Acquisition of PP&E and intangibles assets

(5,860)

(6,499)

Investments in investees

(28)

(16)

Proceeds from disposal of assets - Divestment

4,914

2,952

Divestment (Investment) in marketable securities

692

(192)

Dividends received

486

180

(=) Net cash provided by operating and investing activities

14,152

9,917

Net financings

(18,923)

(7,452)

Proceeds from financing

8,149

13,765

Repayments

(27,072)

(21,217)

Dividends paid to shareholders of Petrobras

(165)

Dividends paid to non-controlling interest

(85)

(127)

Investments by non-controlling interest

(3)

(45)

Effect of exchange rate changes on cash and cash equivalents

(498)

71

Cash and cash equivalents at the end of period 

16,997

23,569

Government bonds and time deposits with maturities of more than 3 months at the end of period

1,053

1,002

Adjusted cash and cash equivalents* at the end of period

18,050

24,571

Reconciliation of Free cash flow

 

 

Net cash provided by (used in) operating activities

13,948

13,492

Acquisition of PP&E and intangibles assets, investments in investees and dividends received

(5,402)

(6,335)

Free cash flow*

8,546

7,157

 

As of June 30, 2018, the balance of cash and cash equivalents was US$ 16,997 million and the balance of adjusted cash and cash equivalents was US$ 18,050 million. The resources from cash provided by operating activities of US$ 13,948 million, proceeds from financing of US$ 8,149 million, proceeds from divestments of US$ 4,914 million were used for repayment of financing (and interest payments) and for capital expenditures.

Net cash provided by operating activities remained stable at US$ 13,948 million, as a result of higher margins of oil and oil products, offset by the decrease in volume and by foreign exchange translation effects.

Acquisition of PP&E and intangibles assets, investments in investees and dividends received totaled US$ 5,402 million in 1H-2018 (89% in E&P business segment), a reduction of 15%.

The above mentioned factors led to an increase of 19% in Free cash flow, which totaled US$ 8,546 million in 1H-2018.

From January to June 2018, proceeds from financing amounted to US$ 8,149 million, with highlights to: (i) Global notes issued in international capital markets in the amount of US$ 1,962 million, with maturities at 2029; (ii) funds raised from the domestic and international banking market, with approximately 6.5 years average terms, in the total amount of US$ 5,120 million and (iii) funds raised with export credit agencies in the amount of US$ 984 million.

In addition, the Company paid debts (principal and interest) in the total amount of US$ 27,072 million, mainly attributable to: (i) repurchase of US$ 11,760 million of Petrobras’s existing series of global notes with maturities between 2019 and 2043, with net premium paid to bond holders amounting to US$ 362 million; (ii) pre-payment of banking loans in the amount of US$ 9,454 million with national and international banks; and (iii) pre-payment of debt with BNDES (US$ 687 million).

Repayments of principal and interest totaled US$ 27,072 million in 1H-2018 and the nominal cash flow (cash view), including principal and interest payments, by maturity, is set out in US$ million, below:

 

Maturity

2018

2019

2020

2021

2022

2023 and thereafter

Balance on June 30, 2018

Balance on December 31, 2017

Principal

1,186

2,698

6,577

8,404

13,311

60,528

92,704

110,530

Interest

2,718

5,330

5,128

4,759

4,242

33,222

55,399

60,728

Total

3,904

8,028

11,705

13,163

17,553

93,750

148,103

171,258

 

*

 

 

*

See reconciliation of Adjusted Cash and Cash Equivalents in Net Debt and definitions of Adjusted Cash and Cash Equivalents and Free Cash Flow in Glossary.

14

 

 

 


 

 

 

V. Consolidated debt

As of June 30, 2018, the total debt in U.S. dollars decreased 16% when compared to December 31, 2017. The net debt in U.S. dollars reduced 13% when compared to December 31, 2017, mainly as a result of repayments of principal and interest.

Current debt and non-current debt include finance lease obligations of US$ 23 million and US$ 173 million as of June 30, 2018, respectively (US$ 25 million and US$ 204 million on December 31, 2017).

The weighted average maturity of outstanding debt reached 9.11 years as of June 31, 2018 (compared to 8.62 years as of December 31, 2017).The Average interest rate increased to 6.2% in June, 2018 from 6.1% in December 31, 2017.

The ratio between net debt and the Adjusted EBITDA* decreased to 2.79 as of June 30, 2018 from 3.53 as of December 31, 2017. The ratio between net debt and the OCF reduced to 2.71 as of June 30, 2018 from 3.20 as of December 31, 2017.

 

U.S.$ million

 

06.30.2018

12.31.2017

    Δ%

Current debt

3,982

7,026

(43)

Non-current debt

87,730

102,249

(14)

Total

91,712

109,275

(16)

  Cash and cash equivalents

16,997

22,519

(25)

  Government securities and time deposits (maturity of more than 3 months)

1,053

1,885

(44)

Adjusted cash and cash equivalents *

18,050

24,404

(26)

Net debt *

73,662

84,871

(13)

Net debt/(net debt+shareholders' equity) - Leverage *

50%

51%

(1)

Total net liabilities *

202,471

226,962

(11)

(Net third parties capital / total net liabilities)

63%

64%

(1)

Net debt/LTM Adjusted EBITDA ratio *

2.79

3.53

(21)

Average interest rate (% p.a.)

6.2

6.1

1

Total debt net of cash and cash equivalents/ LTM OCF ratio*

2.71

3.20

(15)

Weighted average maturity of outstanding debt (years)

9.11

8.62

0.49

 

 

 

US$ million

 

06.30.2018

12.31.2017

    Δ%

Summarized information on financing

 

 

 

Floating rate or fixed rate

 

 

 

Floating rate debt

46,558

53,492

(13)

Fixed rate debt

44,958

55,554

(19)

Total

91,516

109,046

(16)

Currency

 

 

 

Reais

17,218

21,505

(20)

US Dollars

68,372

79,687

(14)

Euro

3,525

5,373

(34)

Other currencies

2,401

2,481

(3)

Total

91,516

109,046

(16)

By maturity

 

 

 

2018

2,644

7,001

(62)

2019

2,596

6,476

(60)

2020

6,435

9,641

(33)

2021

8,258

12,745

(35)

2022

13,227

18,014

(27)

2023 years on

58,356

55,169

6

Total

91,516

109,046

(16)

 

**

 

*

See definition of Adjusted Cash and Cash Equivalents, Net Debt, Total Net Liabilities, LTM Adjusted EBITDA, LTM OCF and Leverage in Glossary and reconciliation in Reconciliation of Adjusted EBITDA and LTM OCF.

15

 

 

 


 

 

 

VI. Reconciliation of Adjusted EBITDA

 

LTM Adjusted EBITDA reflects the sum of the last twelve months of Adjusted EBITDA and represents an alternative measure to our net cash provided by operating activities and is computed by using the EBITDA (net income before net finance income (expense), income taxes, depreciation, depletion and amortization) adjusted by items not considered as part of Company’s primary business, which include results in equity-accounted investments, impairment, cumulative foreign exchange adjustments reclassified to the income statement and results from disposal and write-offs of assets.

In calculating Adjusted EBITDA for 1H-2018, we adjusted our EBITDA for the period by adding foreign exchange gains and losses resulting from provisions for legal proceedings denominated in foreign currencies. Legal provisions in foreign currencies primarily consist Petrobras’s portion of the class action settlement provision created in December 2017. The foreign exchange gains or losses on legal provisions are presented in other income and expenses for accounting purposes but management does not consider them to be part of the Company’s primary business, as well as they are substantially similar to the foreign exchange effects presented within net finance income. No adjustments have been made to the comparative measures presented as amounts were not significant in these periods.

This measure is used to calculate the metric Net Debt/ LTM Adjusted EBITDA, which is established in the business plan 2018-2022, to support management’s assessment of liquidity and leverage.

The Adjusted EBITDA is an alternative performance measure of the Company. This measure is being presented as a supplementary information to the users.

EBITDA, Adjusted EBITDA and LTM Adjusted EBITDA are not defined in the International Financial Reporting Standards – IFRS. Our calculation may not be comparable to the calculation by other companies and it should not be considered in isolation or as a substitute for any measure calculated in accordance with IFRS. These measures must be considered together with other measures and indicators for a better understanding of the Company's financial conditions.

Adjusted EBITDA

 

U.S.$ million

 

Jan-Jun

 

2018

2017

(%)

 

 

 

 

Net income (loss)

4,884

1,619

202

Net finance income (expenses)

2,969

5,212

(43)

Income taxes

2,505

2,751

(9)

Depreciation, depletion and amortization

6,450

6,650

(3)

EBITDA

16,808

16,232

4

Results in equity-accounted investments

(244)

(386)

37

Impairment

(31)

64

(148)

Reclassification of cumulative translation adjustment - CTA

37

(100)

Gains and losses on disposal/write-offs of assets (*)

(689)

(1,983)

65

Foreign exchange gains or losses on provisions for legal proceedings

441

 

Adjusted EBITDA

16,285

13,964

17

Adjusted EBITDA margin (%)

35

33

2

 

 

 

 

 

 

*

In 2018, it primarily comprises divestment results. In 2017, it primarily includes returned areas, canceled projects and the gain on the divestment of NTS.

 


16

 

 

 


 

 

 

* LTM Adjusted EBITDA

 

US$ million

 

Last twelve months (LTM) at

 

 

 

 

 

06.30.2018

12.31.2017

3Q-2017

4Q-2017

1Q-2018

2Q-2018

Net income (loss)

3,434

169

204

(1,654)

2,196

2,688

Net finance income (expenses)

7,652

9,895

2,343

2,340

2,235

734

Income taxes

1,582

1,828

49

(972)

1,219

1,286

Depreciation, depletion and amortization

13,107

13,307

3,440

3,217

3,409

3,041

EBITDA

25,775

25,199

6,036

2,931

9,059

7,749

Results in equity-accounted investments

(531)

(673)

(138)

(149)

(158)

(86)

Impairment

1,096

1,191

46

1,081

18

(49)

Reclassification of cumulative translation adjustment - CTA

37

Gains and losses on disposal/write-offs of assets *

(421)

(1,715)

131

137

(1,005)

316

Foreign exchange gains or losses on provisions for legal proceedings

441

31

410

Adjusted EBITDA

26,360

24,039

6,075

4,000

7,945

8,340

Income taxes

(1,582)

(1,828)

(49)

972

(1,219)

(1,286)

Allowance (reversals) for impairment of trade and others receivables

680

708

182

73

137

288

Trade and other receivables, net

(2,448)

(978)

(904)

(204)

558

(1,898)

Inventories

(2,446)

(336)

48

(649)

(352)

(1,493)

Trade payables

950

(62)

682

20

(418)

666

Deferred income taxes, net

(880)

467

(221)

(1,001)

195

147

Taxes payable

1,861

2,153

572

561

143

585

Others

5,073

2,949

1,208

2,255

(140)

1,750

Net cash provided by operating activities  -OCF

27,568

27,112

7,593

6,027

6,849

7,099

 

 

*

In 2018, it primarily comprises divestment results. In 2017, it primarily includes returned areas, canceled projects and the gain on the divestment of NTS.

17

 

 

 


 

 

 

VII. Foreign exchange translation effects on results of operations of 1H-2018

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. However, the presentation currency of this financial report is the U.S. Dollar to facilitate the comparison with other oil and gas companies. Therefore, the results of operations in Brazilian real were translated into U.S. dollars using the average exchange rates prevailing during the period, as set out in IAS 21 – “The effects of foreign exchanges rates”.

When the Brazilian real appreciates against the U.S. dollar, the effect is to generally increase both revenues and expenses when expressed in U.S. dollars. When the Brazilian real depreciates against the U.S. dollar, as it did in 1H-2018, the effect is to generally decrease both revenues and expenses when expressed in U.S. dollars.

In order to isolate the foreign exchange translation effect on results of operations, the table below presents a reconciliation of income statement to financial information on a constant currency basis, assuming the same exchange rates between each quarter for translation. In 2018, the results on a constant currency basis were computed by converting the 1Q-2018 and 2Q-2018 results from Brazilian real into U.S. dollars based on the same average exchange rates used in 1Q-2017 and 2Q-2017 (3.1451 and 3.2174, respectively).

The amounts and respective variations presented in constant currency are not measures defined in the International Financial Reporting Standards – IFRS. Our calculation may not be comparable to the calculation of other companies and it should not be considered as a substitute for any measure calculated in accordance with IFRS.

 

 

As reported

 

Financial information in a constant currency basis

 

Jan-Jun

 

 

 

Jan-Jun 2018

 

 

 

 

 

Variation

 

 

 

Variation *

 

 

 

 

 

 

 

 

 

 

 

U.S.$ million

 

 

U.S.$ million

 

 

2018

2017

Δ

Δ(%)

 

Foreign exchange translation effects

Results on a constant currency basis

Δ

Δ(%)

Sales revenues

46,365

42,560

3,805

9

 

(3,541)

49,906

7,346

17

Cost of sales

(29,340)

(28,355)

(985)

(3)

 

2,225

(31,565)

(3,210)

(11)

Gross profit

17,025

14,205

2,820

20

 

(1,316)

18,342

4,136

29

Selling expenses

(2,590)

(1,969)

(621)

(32)

 

199

(2,789)

(820)

(42)

General and administrative expenses

(1,272)

(1,424)

152

11

 

95

(1,367)

57

4

Exploration costs

(298)

(281)

(17)

(6)

 

25

(323)

(42)

(15)

Research and development expenses

(317)

(278)

(39)

(14)

 

24

(341)

(63)

(23)

Other taxes

(248)

(1,046)

798

76

 

17

(265)

781

75

Other income and expenses

(2,186)

(11)

(2,175)

(19,773)

 

228

(2,414)

(2,403)

(21,845)

Operating income

10,114

9,196

918

10

 

(728)

10,844

1,646

18

Net finance income (expense)

(2,969)

(5,212)

2,243

43

 

158

(3,127)

2,085

40

Results in equity-accounted investments

244

386

(142)

(37)

 

(14)

258

(128)

(33)

Income before income taxes

7,389

4,370

3,019

69

 

(584)

7,977

3,603

83

Income taxes

(2,505)

(2,751)

246

9

 

195

(2,700)

51

2

Net income  

4,884

1,619

3,265

202

 

(389)

5,277

3,654

226

 

 

 

 

 

 

 

 

 

 

 

*Variation after isolating foreign exchange translation effects between periods used for translation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18

 

 

 


 

 

 

VIII. Unaudited Financial Statements

Income Statement - Consolidated

 

U.S.$ million

 

Jan-Jun

 

2018

2017

Sales revenues

46,365

42,560

Cost of sales

(29,340)

(28,355)

Gross profit

17,025

14,205

 

 

 

Selling expenses

(2,590)

(1,969)

General and administrative expenses

(1,272)

(1,424)

Exploration costs

(298)

(281)

Research and development expenses

(317)

(278)

Other taxes

(248)

(1,046)

Other income and expenses

(2,186)

(11)

 

(6,911)

(5,009)

Operating income (loss)

10,114

9,196

Finance income

1,614

623

Finance expenses

(3,287)

(4,025)

Foreign exchange gains (losses) and inflation indexation charges

(1,296)

(1,810)

Net finance income (expense)

(2,969)

(5,212)

Results in equity-accounted investments

244

386

Income (loss) before income taxes

7,389

4,370

Income taxes

(2,505)

(2,751)

Net income (loss)  

4,884

1,619

Net income (loss) attributable to:

 

 

Shareholders of Petrobras

4,939

1,513

Non-controlling interests

(55)

106

 

4,884

1,619

 

19

 

 

 


Statement of Financial Position – Consolidated

ASSETS

U.S.$ million

 

06.30.2018

12.31.2017

 

 

 

Current assets

37,413

47,131

Cash and cash equivalents

16,997

22,519

Marketable securities

1,053

1,885

Trade and other receivables, net

5,027

4,972

Inventories

9,216

8,489

Recoverable taxes

2,336

2,437

Assets classified as held for sale

400

5,318

Other current assets

2,384

1,511

Non-current assets

183,108

204,235

Long-term receivables

20,885

21,450

           Trade and other receivables, net

4,951

5,175

           Marketable securities

52

64

           Judicial deposits

5,847

5,582

           Deferred taxes

4,047

3,438

           Other tax assets

2,596

3,075

           Advances to suppliers

797

1,032

           Other non-current assets

2,595

3,084

Investments

3,187

3,795

Property, plant and equipment

157,032

176,650

Intangible assets

2,004

2,340

Total assets

220,521

251,366

 

 

 

LIABILITIES

U.S.$ million

 

06.30.2018

12.31.2017

Current liabilities

21,954

24,948

Trade payables

5,386

5,767

Finance debt and Finance lease obligations

3,982

7,026

Taxes payable

4,518

4,847

Payroll and related charges

1,559

1,309

Pension and medical benefits

727

844

Provisions for legal proceedings

3,215

2,256

Liabilities related to assets classified as held for sale

43

391

Other current liabilities

2,524

2,508

Non-current liabilities

124,017

144,916

Finance debt and Finance lease obligations

87,730

102,249

Income taxes payable

565

671

Deferred taxes

425

1,196

Pension and medical benefits

18,549

20,986

Provisions for legal proceedings

3,469

4,770

Provision for decommissioning costs

12,276

14,143

Other non-current liabilities

1,003

901

Shareholders' equity

74,550

81,502

Share capital  (net of share issuance costs) 

107,101

107,101

Profit reserves and others

(33,928)

(27,299)

Non-controlling interests

1,377

1,700

Total liabilities and shareholders' equity

220,521

251,366

 

 

 

 

20

 

 

 


 

 

 

Statement of Cash Flows – Consolidated

 

US$ million

 

Jan-Jun

 

2018

2017

Net income (loss)  

4,884

1,619

(+) Adjustments for:

9,064

11,873

      Depreciation, depletion and amortization

6,450

6,650

      Foreign exchange, indexation and finance charges

4,380

5,077

      Results in equity-accounted investments

(244)

(386)

      Reclassification of cumulative translation adjustment and other comprehensive income

59

      Revision and unwinding of discount on the provision for decommissioning costs

349

379

      Gain on remeasurement of investment retained with loss of control  

(217)

      Allowance (reversals) for impairment of trade and others receivables

425

453

      Gains and losses on disposal / write-offs of assets

(689)

(1,766)

      Deferred income taxes, net

342

1,689

      Exploratory expenditures write-offs

65

101

      Impairment of assets

(31)

64

      Inventory write-down to net realizable value

17

78

      Pension and medical benefits (actuarial expense)

1,137

1,368

      Judicial deposits

(1,155)

(507)

      Inventories

(1,845)

265

      Trade and other receivables, net

(1,340)

130

      Trade payables

248

(764)

      Pension and medical benefits

(542)

(428)

      Taxes payable

1,804

1,216

      Other assets and liabilities

769

(1,392)

Income taxes paid

(1,076)

(196)

(=) Net cash provided by (used in) operating activities

13,948

13,492

(-) Net cash provided by (used in) investing activities

204

(3,575)

Acquisition of PP&E and intangibles assets

(5,860)

(6,499)

Investments in investees

(28)

(16)

Proceeds from disposal of assets - Divestment

4,914

2,952

Divestment (Investment) in marketable securities

692

(192)

Dividends received

486

180

(=) Net cash provided by operating and investing activities

14,152

9,917

Proceeds from financing

8,149

13,765

Repayment of principal

(23,965)

(17,409)

Repayment of interest

(3,107)

(3,808)

Dividends paid to shareholders of Petrobras

(165)

Dividends paid to non-controlling interest

(85)

(127)

Investments by non-controlling interest

(3)

(45)

(-) Net cash provided by (used in) financing activities

(19,176)

(7,624)

Effect of exchange rate changes on cash and cash equivalents

(498)

71

(=) Net increase (decrease) in cash and cash equivalents in the period

(5,522)

2,364

Cash and cash equivalents at the beginning of period

22,519

21,205

Cash and cash equivalents at the end of period

16,997

23,569

 

 

 

 

21

 

 

 


 

 

 

IX. Segment Information

Consolidated Income by Segment – 1H-2018

 

U.S.$ million

 

 

 

 

 

 

 

 

 

 

E&P

RTM

GAS & POWER

BIOFUEL

DISTRIB.

CORP.

ELIMIN.

TOTAL

Sales revenues

25,933

35,207

5,719

128

14,063

(34,685)

46,365

Intersegments

24,888

7,813

1,683

118

183

(34,685)

Third parties

1,045

27,394

4,036

10

13,880

46,365

Cost of sales

(15,030)

(30,759)

(3,917)

(119)

(13,197)

33,682

(29,340)

Gross profit

10,903

4,448

1,802

9

866

(1,003)

17,025

Expenses

(652)

(1,272)

(1,389)

(11)

(623)

(2,944)

(20)

(6,911)

Selling expenses

(41)

(855)

(1,078)

(1)

(456)

(145)

(14)

(2,590)

General and administrative expenses

(134)

(200)

(69)

(10)

(120)

(738)

(1)

(1,272)

Exploration costs

(298)

(298)

Research and development expenses

(221)

(5)

(10)

(81)

(317)

Other taxes

(59)

(60)

(25)

(2)

(11)

(91)

(248)

Other income and expenses

101

(152)

(207)

2

(36)

(1,889)

(5)

(2,186)

Operating income (loss)

10,251

3,176

413

(2)

243

(2,944)

(1,023)

10,114

Net finance income (expense)

(2,969)

(2,969)

Results in equity-accounted investments

3

222

27

(9)

1

244

Income (loss) before income taxes

10,254

3,398

440

(11)

243

(5,912)

(1,023)

7,389

Income taxes

(3,482)

(1,081)

(141)

1

(83)

1,933

348

(2,505)

Net income (loss)

6,772

2,317

299

(10)

160

(3,979)

(675)

4,884

Net income (loss) attributable to:

 

 

 

 

 

 

 

 

Shareholders of Petrobras

6,775

2,399

222

(10)

118

(3,890)

(675)

4,939

Non-controlling interests

(3)

(82)

77

42

(89)

(55)

 

6,772

2,317

299

(10)

160

(3,979)

(675)

4,884

 

 

 

 

 

 

 

 

 

Consolidated Income by Segment – 1H-2017

 

U.S.$ million

 

 

 

 

 

 

 

 

 

 

E&P

RTM

GAS & POWER

BIOFUEL

DISTRIB.

CORP.

ELIMIN.

TOTAL

Sales revenues

20,459

33,091

5,330

99

12,966

(29,385)

42,560

Intersegments

19,751

7,893

1,439

95

207

(29,385)

Third parties

708

25,198

3,891

4

12,759

42,560

Cost of sales

(13,452)

(28,682)

(3,763)

(108)

(12,064)

29,714

(28,355)

Gross profit

7,007

4,409

1,567

(9)

902

329

14,205

Expenses

(1,645)

(1,295)

1,100

(4)

(614)

(2,587)

36

(5,009)

Selling expenses

(66)

(839)

(620)

(1)

(489)

6

40

(1,969)

General and administrative expenses

(152)

(228)

(89)

(13)

(135)

(807)

(1,424)

Exploration costs

(281)

(281)

Research and development expenses

(169)

(6)

(11)

(92)

(278)

Other taxes

(31)

(35)

(212)

(4)

(12)

(752)

(1,046)

Other income and expenses

(946)

(187)

2,032

14

22

(942)

(4)

(11)

 

 

 

 

 

 

 

 

 

Operating income (loss)

5,362

3,114

2,667

(13)

288

(2,587)

365

9,196

Net finance income (expense)

(5,212)

(5,212)

Results in equity-accounted investments

46

304

55

(19)

386

Income (loss) before income taxes

5,408

3,418

2,722

(32)

288

(7,799)

365

4,370

Income taxes

(1,824)

(1,058)

(906)

4

(98)

1,255

(124)

(2,751)

Net income (loss)

3,584

2,360

1,816

(28)

190

(6,544)

241

1,619

Net income (loss) attributable to:

 

 

 

 

 

 

 

 

Shareholders of Petrobras

3,579

2,370

1,756

(28)

190

(6,595)

241

1,513

Non-controlling interests

5

(10)

60

51

106

 

3,584

2,360

1,816

(28)

190

(6,544)

241

1,619

 

 

 

 

 

 

 

 

 

 

22

 

 

 


 

 

 

Other Income and Expenses by Segment – 1H-2018

 

 

U.S.$ million

 

 

 

 

 

 

 

 

 

 

E&P

RTM

GAS & POWER

BIOFUEL

DISTRIB.

CORP.

ELIMIN.

TOTAL

Gains / (losses) related to legal, administrative and arbitration proceedings

(74)

(69)

(130)

(49)

(524)

(846)

Pension and medical benefits - retirees

(792)

(792)

Gains/(losses) with Commodities Derivatives

(564)

(564)

Unscheduled stoppages and pre-operating expenses

(445)

(13)

(56)

(2)

(516)

Profit sharing

(136)

(66)

(11)

(106)