Petrobras closed the first quarter of the year with solid operational and financial performance, even in a challenging period due to the worsening of the pandemic in the country. The company had net income of R$1.2 billion in the quarter, equivalent to US$0.2 billion, reflecting the non-cash impact of R$18.7 billion from the devaluation of the real against the dollar between December 2020 and March 2021.
"Petrobras delivered a solid result. We overcame, during this period, the challenges of this complex situation, with safety, progressive actions, and respect for the environment, the shareholders, and society in general, thus generating significant value for the company," said Petrobras CEO Joaquim Silva e Luna.
The first quarter of the year was positively impacted by the increase in the price of oil (brent) and lower recurring operational expenses. The company increased by 19% the payment of government participation. A significant improvement was recorded in recurring EBITDA in relation to the previous quarter, with an increase of 36%. This financial indicator, which closed the quarter at R$47.8 billion, is used to analyze the operating result of a company over time. It is important because it excludes the effect of interest, taxes, depreciation, and amortization of net income and non-recurring items, making it easier to compare results between companies, a fundamental piece of information that guides potential investors' decision-making.
The expressive cash generation (R$31.1 billion of positive free cash flow) and the cash inflow related to the sale of assets (R$1.1 billion), allowed the maintenance of the programmed investments and the strong deleveraging, even in a challenging scenario. During the quarter, Petrobras reduced its gross debt by US$4.6 billion. In April, there had already been an additional significant reduction of US$3.2 billion. With this, Petrobras reaches a level of US$ 68 billion of gross debt, very close to the target of US$ 67 billion set for the end of 2021, showing that the company remains fully focused on the strategies set out in its Strategic Plan, becoming a more resilient, financially healthier company.
"Despite the remaining challenges imposed by the pandemic, we maintained our robust cash generation through our operations and were able to maintain the trajectory of strengthening our capital structure, reducing our gross debt," said Rodrigo Araujo, Chief Financial and Investor Relations Officer.
Regarding the operating result, in the first quarter of 2021, Petrobras increased its production of oil and natural gas by 3% compared to the fourth quarter of 2020, reflecting the increased production (ramp-up) of platform P-70, installed in the Atapu field. The production increase in pre-salt, which accounted for 69% of Petrobras' total production, is a clear highlight.
Petrobras also reached record sales of S-10 Diesel fuel in April, a low-sulfur product that reflects the company's successful efforts to expand the supply of this lower-sulfur product, replacing the S-500 Diesel fuel.