PBR

Petrobras Q1 2026 Financial Summary

Business Context and Reporting Period

This Form 6-K filing presents the unaudited condensed consolidated interim financial statements for Petróleo Brasileiro S.A. – Petrobras for the three-month period ended March 31, 2026. The statements were approved by the Board of Directors on May 11, 2026, and reviewed by KPMG Auditores Independentes Ltda. Petrobras operates primarily in the exploration, production, refining, and marketing of oil and gas, with significant exposure to the Brazilian domestic market and international exports.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Growth: Sales revenues increased by 11.7% to $23.5 billion, driven by higher export volumes (up 43.5% to $7.8 billion) and increased domestic diesel sales. Crude oil exports rose significantly to $5.7 billion.
• Profitability: Net income rose 3.7% to $6.2 billion. Gross profit increased to $11.3 billion. A significant impairment reversal of $417 million (compared to a $50 million loss in Q1 2025) contributed to the bottom line, primarily due to the resumption of the Nitrogen Fertilizer Unit (UFN-III).
• Cost Structure: Cost of sales increased to $12.2 billion. Selling expenses rose to $1.5 billion, and exploration costs decreased to $138 million from $313 million in the prior year.
• Foreign Exchange: Net finance income included $2.1 billion in foreign exchange gains, largely due to the depreciation of the Brazilian Real against the U.S. Dollar, which positively impacted the translation of dollar-denominated assets and liabilities.
• Capital Expenditures: Cash used in investing activities increased to $3.6 billion, with $4.5 billion spent on the acquisition of property, plant, and equipment (PP&E), reflecting continued investment in pre-salt fields.

Guidance, Outlook, Risks, and Unusual Items

• Dividend Policy: The Board approved interim interest on capital of $1.8 billion ($0.1431 per share) for Q1 2026, payable in August and September 2026. Additionally, complementary dividends for 2025 totaling $1.5 billion were approved for payment in May and June 2026.
• Tax Environment: The company recognized a $122 million expense related to a new Export Tax on crude oil and diesel established in March 2026. The company is also evaluating the implications of the Tax Reform regulations published in April 2026.
• Legal Contingencies: Significant contingent liabilities remain, totaling $46.5 billion, primarily related to tax, civil, and labor claims. The company continues to defend against the class action in the Netherlands regarding the Lava Jato operation, where the District Court of Rotterdam recently rejected shareholder claims but bondholder claims remain under appeal.
• Subsequent Events:
  • Acquired a 50% interest in the Tartaruga Verde and Espadarte (Module III) fields for $450 million.
  • Acquired the ring-fence of the Argonauta field for $134 million, increasing its stake in the Jubarte shared reservoir to 98.11%.
  • Entered a new Shareholders' Agreement for Braskem, maintaining joint control.
• Risk Management: The company maintains a cash flow hedge on future exports, with cumulative losses of $16.8 billion recognized in equity. Sensitivity analysis indicates a potential negative impact of $1.5 billion on equity under a probable foreign exchange scenario.

Investor Verification Checklist

• Export Tax Impact: Verify the long-term impact of the new 12% crude oil and 50% diesel export tax on future margins and cash flows.
• Impairment Reversals: Confirm the sustainability of the $417 million impairment reversal related to the Nitrogen Fertilizer Unit and the assumptions behind the project resumption.
• Foreign Exchange Sensitivity: Monitor the volatility of the BRL/USD exchange rate, as a significant portion of net finance income ($2.1 billion) is derived from FX gains.
• Legal Exposure: Track the status of the Dutch class action appeal and the magnitude of the $46.5 billion in contingent liabilities, particularly tax and civil claims.
• Capital Allocation: Review the balance between the $4.5 billion quarterly CapEx and the $1.8 billion interim dividend payout to ensure liquidity remains robust.