Brazil
• Net income increased 37% over the first half 2010 (1H10), and cash generation measured by the EBITDA was up R$32 billion, 4% more than 1H10;
• Total oil & gas production was up 2% compared to 1H10, reaching an average of 2,613,000 boed.
• The Lula pilot project proved the pre-salt region's high productivity, reaching an average of 36,322 boed in May;
• Three new Extended Well Tests (EWTs): in the northeast area of the Lula field, Aruanã and Brava in the post-salt region of the Campos Basin;
• 9% growth in domestic sales volumes of oil products in 1H11 compared to 1H10. Growth in 1H10 was 11% in relation to 1H09;
• Release of the new 2011-2015 Business Plan, with a total investment of US$224.7 billion (R$389 billion). Increased focus on E&P, especially in the Pre-salt;
• Moody's recognizes the improvement in Petrobras foreign currency risk, and have raised the rating of the Company from Baa1 to A3.
Results for the Quarter
• Net income of R$10.942 billion and EBITDA of R$16.139 billion, remaining stable compared to 2Q11 vs. 1Q11;
• Domestic sales volumes of oil products and natural gas grew 7% in 2Q11 vs. 1Q11.
The net income in the half-year rose 37%
In the first half of 2011, the Company's showed a net income of R$21.928 billion, 37% up on the same period 2010. Contributing to this result was a 12% increase in sales revenues, driven by a 2% growth in domestic oil and natural gas output and, mainly, a higher oil product (+9%) and gas natural (+7%) sales volume on the domestic market, which were more expensive due to a 5% increase in the average realization price. Commodity prices reflected a 44% surge in the average Brent crude oil price (up from US$77.27 per barrel to US$111.16 per barrel), which increased income from exports and international sales.
In the same period, the cost of goods sold (COGS) rose 16%, mainly as an impact of higher oil and oil product import (notably diesel) costs and increased extraction costs, government share and refining costs. Operating expenses were up 7% compared to 1H10, mainly due to higher spending on prospecting and exploration (R$512 million) and administrative expenses (R$448 million). The Company reported a 3% increase in operating profit and 4% increase in operating cash flow (EBITDA) compared to 1H10.
The improved net financial result (positive variation of R$6.249 billion) contributed to the half year earnings, as a result of currency appreciation (+6.3%) on the Company's debt pegged to the US Dollar and of the increase in revenues from financial investments.
In the first half of the year, the Company paid out R$4.827 billion as interest on stockholders equity and R$1.565 billion as dividends to its shareholders. The second tranche of the early distribution of interest on stockholders equity, totaling R$2.609 billion, to be paid out by October, was also approved.
2Q11 net income reached R$10.942 billion
Net profit for the quarter remained stable compared to 1Q11. Sales revenues increased 12% in the quarter, reflecting higher domestic sales volumes of oil products (+8%) and natural gas (+2%), at higher prices, and increased oil export prices. This increase was offset by a 19% rise in COGS in the period due to more oil product imports, mainly diesel and gasoline, to meet domestic market needs. Also contributing to offset this increase were the rising costs of extraction and refining.
Operating expenses were up 7% with the highest spending on prospecting and exploration (R$257 million) and in provisioning to adjust the inventory to market value (R$119 million). The Company posted better financial results (an increase of R$873 million) in the quarter due to foreign exchange gains on debt tied to the US Dollar and financial revenues.
