Petrobras Financial Performance in 4Q21

Source: 2/23/2022, Location: South America

In 4Q21, Petrobras posted solid operational and financial results. According to Petrobras’ CEO, Joaquim Silva e Luna, “Petrobras generated consistent results in 4Q21, demonstrating that a healthy company committed to society is capable of growing, investing, generating jobs, paying taxes and returning money to its shareholders, effectively contributing to the country’s development. None of this would be possible for an indebted company bereft of the ability to generate value. These results demonstrate that the quality of our work unequivocally translates into wealth for society.”

According to CFO Rodrigo Araujo Alves, “Either from the operational, economic and financial perspective or the strategic perspective, we have today a much more solid and resilient company that was able to show that rational and efficient management generates value to society and to our shareholders. It is worth mentioning that, in addition to dividends, in 2021 we paid more than R$ 200 billion in taxes, totaling around R$ 230 billion in returns to society, not including the additional dividends approved today."

Main highlights:
• Achievement of gross debt target of US$ 60 billion 15 months in advance, resulting in a net debt/EBITDA ratio of 1.1x.
• Achievement of all top metrics established in the 2021-2025 Strategic Plan and of all production targets for the year, with the pre-salt accounting for around 70% of our production.
• Largest reserves addition in the history of Petrobras (1.97 billion boe), resulting in the replacement of 219% of 2021 production.
• Approval of the 2022-2026 Strategic Plan with goals for value generation supported by assets that are resilient to low oil prices and low carbon intensity, and projected investments of US$ 68 billion, with a forecast of 15 new FPSOs starting up in the period, 12 of which are already procured.
• Main annual results: recurring EBITDA of US$ 43.5 billion and free cash flow of US$ 31.5 billion.
• Total shareholder remuneration proposed of R$ 7.77 per common or preferred share.
• One notch rating upgrade by Moody's, from "Ba2" to "Ba1", with a stable outlook, and upgrade of the company's stand-alone credit profile (intrinsic risk) rating also by 1 notch, from "ba2" to "ba1.
• Cash inflow from asset sales of US$ 4.8 billion in 2021, including the conclusion of the US$ 1.8 billion sale of RLAM, which represents about 13% of Brazil's refining capacity, and conclusion of the offer of Petrobras Distribuidora shares in the amount of US$ 2.2 billion.
• Acquisition of exploration rights in the Sépia and Atapu fields, which will contribute to continuous value generation.
• Production start-up of FPSO Carioca, the first platform in the Sépia field, in the pre-salt layer of Santos Basin, and completion of the P-70 ramp-up, in the Atapu field, in less than 13 months.
• Average total utilization factor in our refineries of 88% in 4Q21 and 83% in 2021, the highest rate in the last five years, reflecting efficiency gains in the plants’ management.
• Investments in scheduled maintenance stoppages in our refineries broke records in 2021, reaching R$ 2.3 billion. The figure represents an increase of more than 50% compared to 2020 and more than 20% compared to the previous record reached in 2019.
• Record sales and production of S-10 diesel in 2021, with an increase of 34.7% in sales and 10% in production.
• Conclusion of obligations with the US Department of Justice (DOJ).
• Ambition to achieve greenhouse gas emissions neutrality on scope 1 and 2 operations, alongside the intention to influence the achievement of the same objective in non-operated assets, within a period compatible with that established by the Paris Agreement.
• Return to the Dow Jones Sustainability Index World by S&P Global's Corporate Sustainability Assessment, with the highest grades in the Materiality, Environmental Report, Water-Related Risks and Social Report criteria.
• In addition to the disclosure of this Financial Performance Report, we are releasing on the same date the 2021 Financial Statements, Management, Fiscal and Climate Change Reports.

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