Petrobras(PBR)2023-08-04 18:39Financial Data and Key Metrics - The company increased investments to 58 billion and operating cash flow reaching 5.8 billion, with free cash flow at 15.8 billion [130] - Adjusted EBITDA remained stable, with Q1 and Q2 levels close to recurring EBITDA, reflecting lower disinvestment due to the asset portfolio [3] - The company's net debt to EBITDA ratio was 0.74x, indicating strong financial health [130] Business Line Data and Key Metrics - Diesel production capacity with renewable content is projected to increase by 146% later this year, with a new unit authorized to expand production to 12 million liters per day [5] - The company achieved record diesel production of 2.11 million cubic meters in the first half of 2023, with expectations to reach 2.38 million cubic meters in July [39] - Refinery utilization factor reached 93%, the highest since 2015, despite scheduled shutdowns [115] - Pre-salt production accounted for 78% of total production, with over 2 million barrels per day [132] Market Data and Key Metrics - Brent crude prices dropped significantly from 78 per barrel in Q2 2023, impacting results [3] - Russian diesel imports to Brazil accounted for over 80% of total diesel imports in July, creating competitive pressure [76][148] - The company reduced oil exports due to higher refinery utilization, processing more pre-salt oil domestically [22] Company Strategy and Industry Competition - The company is focusing on expanding renewable diesel production and reducing emissions, with a maritime transport test using 24% renewable content reducing emissions by 17% [5] - Petrobras is investing in energy transition, with plans to allocate up to 15% of total investments to low-carbon initiatives [125] - The company is exploring partnerships and M&A opportunities in petrochemicals and fertilizers, aligning with long-term strategic goals [105] Management Commentary on Operating Environment and Future Outlook - Management highlighted the resilience of the company despite adverse external conditions, including Brent price drops and currency fluctuations [3] - The company is committed to leading the energy transition in Brazil, with a focus on decarbonization and renewable energy [125] - Petrobras is monitoring market volatility and adjusting its commercial strategy to maintain competitiveness, particularly in light of Russian diesel imports [148] Other Important Information - The company launched a diversity supplement to reinforce awareness of diversity and inclusion internally and in society [2] - Petrobras received multiple awards for innovation, including the MIT Award and the Valor Inovação Award [10] - The company is testing green recycling processes and hybrid vessels to reduce emissions and costs [23][146] Q&A Session Summary Question: How does the company view its minimum optimal cash level? - The company maintains a minimum cash level of 8 billion, aligning with strategic plans [162] Question: What are the company's plans for energy transition and biofuels? - Petrobras is focusing on biofuels due to Brazil's abundant land and water resources, existing logistics for liquid fuels, and the ability to adapt refining units for biofuel production [78] Question: How is the company managing its debt levels? - Gross debt is within established limits, and the company has reduced financial debt by $0.6 million, maintaining a comfortable debt trajectory [7] Question: What is the company's dividend policy? - The company revised its dividend payout policy, reducing the payout ratio from 60% to 45% of free cash flow, in line with global peers [131] Question: How is the company addressing competition from Russian diesel? - Petrobras is optimizing its refining complex and logistics assets while monitoring the market for competitive adjustments [148] Question: What are the company's plans for petrochemicals and fertilizers? - Petrobras is studying the return to fertilizer production and exploring partnerships in petrochemicals, aligning with long-term strategic goals [51][105]