UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
For the month of May, 2021
Commission File Number 1-15106
PETRÓLEO BRASILEIRO S.A. – PETROBRAS
(Exact name of registrant as specified in its charter)
Brazilian Petroleum Corporation – PETROBRAS
(Translation of Registrant's name into English)
Avenida República do Chile, 65
20031-912 – Rio de Janeiro, RJ
Federative Republic of Brazil
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F ___X___ Form 40-F _______
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes _______ No___X____
Petrobras Financial Performance in 1Q21
Petrobras posted solid financial and operating results in 1Q21. Regarding 1Q21 results, Petrobras’ CEO Joaquim Silva e Luna made the following comments: “The figures show the capacity of our team to deliver sustainable results to our investors and to society, even in a challenging environment. Petrobras will continue down the path of value generation, with its management based on transparency, dialogue and rationality and with investments concentrated in assets in which we are recognized as global leaders”.
CFO Rodrigo Araujo Alves also commented: “Those very strong figures show that we are in the right path. We will continue to focus on the strategies set forth in our Strategic Plan, generating value in all our operations and projects and managing our portfolio aiming to maximize returns to our shareholders and other stakeholders”.
Main highlights of 1Q21:
· 36% increase in recurring adjusted EBITDA in the quarter, even with lower sales volume.
· Recurring net income impacted by the effect of Brazilian real depreciation over debt.
· Positive free cash flow of R$ 31.1 billion.
· Cash inflow from asset sales of US$ 472 million up to May 11th, 2021.
· Gross debt reduction of US$ 18.3 billion in the annual comparison and of US$ 4.6 billion in the quarterly comparison, reaching US$ 71 billion.
· More than US$ 3.2 billion in pre-payments and amortizations in April.
· Reduction of foreign exchange exposure in US$ 8.4 billion, reaching US$ 34.9 billion.
· | Net debt/adjusted EBITDA decreased, reaching 2.03x in March 31st, 2021, the best mark since 2012. |
Table 1 - Main items*
Variation (%) | |||||
R$ million | 1Q21 | 4Q20 | 1Q20 | 1Q21 X 4Q20 | 1Q21 x 1Q20 |
Sales revenues | 86,174 | 74,972 | 75,469 | 14.9 | 14.2 |
Gross profit | 44,033 | 40,360 | 31,615 | 9.1 | 39.3 |
Operating expenses | (11,148) | 27,476 | (75,616) | − | (85.3) |
Consolidated net income (loss) attributable to the shareholders of Petrobras - Petrobras Shareholders | 1,167 | 59,890 | (48,523) | (98.1) | − |
Recurring consolidated net income (loss) attributable to the shareholders of Petrobras * | 1,452 | 28,444 | (4,637) | (94.9) | − |
Net cash provided by operating activities | 40,070 | 37,702 | 34,991 | 6.3 | 14.5 |
Free Cash Flow | 31,085 | 30,243 | 26,664 | 2.8 | 16.6 |
Adjusted EBITDA | 48,949 | 47,043 | 37,504 | 4.1 | 30.5 |
Recurring Adjusted EBITDA * | 47,757 | 35,098 | 36,925 | 36.1 | 29.3 |
Gross debt (US$ million) | 70,966 | 75,538 | 89,237 | (6.1) | (20.5) |
Net Debt (US$ million) | 58,424 | 63,168 | 73,131 | (7.5) | (20.1) |
Net Debt/LTM Adjusted EBITDA ratio ** | 2.03 | 2.22 | 2.15 | (8.6) | (5.6) |
Average commercial selling rate for U.S. dollar | 5.47 | 5.40 | 4.47 | 1.3 | 22.6 |
Brent crude (US$/bbl) | 60.90 | 44.23 | 50.26 | 37.7 | 21.2 |
Domestic basic oil products price (R$/bbl) | 350.07 | 269.08 | 286.63 | 30.1 | 22.1 |
TRI (total recordable injuries per million men-hour frequency rate) | 0.62 | 0.56 | 0.65 | 10.7 | (4.6) |
* See reconciliation of Recurring net income and Adjusted EBITDA in the Special Items section.
** Ratio calculated in USD
2 |
Consolidated Results
Net Revenues
Table 2 – Net revenues by products
Variation (%) | |||||
R$ million | 1Q21 | 4Q20 | 1Q20 | 1Q21 X 4Q20 | 1Q21 x 1Q20 |
Diesel | 25,161 | 19,852 | 18,023 | 26.7 | 39.6 |
Gasoline | 11,068 | 9,658 | 8,327 | 14.6 | 32.9 |
Liquefied petroleum gas (LPG) | 5,018 | 4,960 | 4,010 | 1.2 | 25.1 |
Jet fuel | 2,328 | 1,831 | 3,721 | 27.1 | (37.4) |
Naphtha | 1,812 | 1,787 | 2,976 | 1.4 | (39.1) |
Fuel oil (including bunker fuel) | 1,829 | 1,374 | 1,165 | 33.1 | 57.0 |
Other oil products | 4,815 | 4,297 | 3,069 | 12.1 | 56.9 |
Subtotal Oil Products | 52,031 | 43,759 | 41,291 | 18.9 | 26.0 |
Natural gas | 5,678 | 5,144 | 5,372 | 10.4 | 5.7 |
Renewables and nitrogen products | 74 | 78 | 117 | (5.1) | (36.8) |
Revenues from non-exercised rights | 365 | 383 | 407 | (4.7) | (10.3) |
Electricity | 2,970 | 3,452 | 1,250 | (14.0) | 137.6 |
Services, agency and others | 1,166 | 1,123 | 703 | 3.8 | 65.9 |
Total domestic market | 62,284 | 53,939 | 49,140 | 15.5 | 26.7 |
Exports | 22,800 | 19,628 | 24,711 | 16.2 | (7.7) |
Crude oil | 15,462 | 13,772 | 19,006 | 12.3 | (18.6) |
Fuel oil (including bunker fuel) | 6,598 | 5,249 | 4,652 | 25.7 | 41.8 |
Other oil products and other products | 740 | 607 | 1,053 | 21.9 | (29.7) |
Sales from foreign subsidiaries | 1,090 | 1,405 | 1,618 | (22.4) | (32.6) |
Total foreign market | 23,890 | 21,033 | 26,329 | 13.6 | (9.3) |
Total | 86,174 | 74,972 | 75,469 | 14.9 | 14.2 |
Net revenue in 1Q21 was R$ 86.2 billion, 14.9% higher than 4Q20, mainly due to the 38% appreciation in Brent prices. This result was also supported by higher diesel revenues, which reached R$ 25.2 billion (27% higher than 4Q20), due to Petrobras’ higher market share in the diesel market and the growth in S-10 diesel sales, despite the drop in total diesel sales volume.
The increase in Brent price also resulted in higher revenues for other oil products, although sales volumes of oil products in the domestic market decreased by 5.6% due to seasonality and restrictions imposed by COVID-19. The exception was the 8.3% increase in fuel oil sales volume for thermoelectric generation and use in the industrial segment.
In 1Q21, despite lower volumes of exported crude oil and oil products, export revenue reached R$ 22.8 billion, 16.2% higher when compared to 4Q20, as a result of the hike in Brent prices. The 3% increase in oil and gas production in 1Q21 was not fully translated into revenues, with 27 MMbbl of ongoing crude oil exports.
In terms of revenue breakdown in the domestic market, diesel and gasoline continued to be the main products, accounting, together, for 70% of the domestic oil products sales revenues in 1Q21.
3 |
There was an increase in China's share of exports in 1Q21, reaching 56%. Singapore remained the main destination for exports of oil products, with 75%, taking advantage of the opportunities brought by IMO 2020. In 1Q21, we had the following distribution of export destinations:
Table 3 – Crude oil exports volume
Country | 1Q21 | 4Q20 | 1Q20 |
China | 56% | 42% | 48% |
Índia | 7% | 11% | 8% |
Portugal | 7% | 11% | 3% |
Chile | 5% | 11% | 8% |
United States | 3% | 14% | 3% |
Spain | 3% | 2% | 6% |
Netherlands | 1% | 2% | 5% |
Others | 18% | 7% | 19% |
Table 4 – Oil products exports volume
Country | 1Q21 | 4Q20 | 1Q20 |
Singapore | 75% | 80% | 53% |
USA | 15% | 17% | 14% |
Others | 10% | 3% | 32% |
Cost of Goods Sold
Table 5 – Cost of goods sold
Variation (%) | |||||
R$ million | 1Q21 | 4Q20 | 1Q20 | 1Q21 X 4Q20 | 1Q21 x 1Q20 |
Brazilian operations | (41,337) | (33,606) | (42,709) | 23.0 | (3.2) |
Acquisitions | (12,838) | (9,013) | (9,592) | 42.4 | 33.8 |
Crude oil imports | (5,220) | (3,598) | (5,569) | 45.1 | (6.3) |
Oil products imports | (3,649) | (2,504) | (2,289) | 45.7 | 59.4 |
Natural gas imports | (3,969) | (2,911) | (1,734) | 36.3 | 128.9 |
Production | (27,256) | (22,951) | (32,294) | 18.8 | (15.6) |
Crude oil | (21,572) | (17,909) | (26,063) | 20.5 | (17.2) |
Production taxes | (8,922) | (7,407) | (9,275) | 20.5 | (3.8) |
Others costs | (12,650) | (10,502) | (16,787) | 20.5 | (24.6) |
Oil products | (3,265) | (2,719) | (3,105) | 20.1 | 5.1 |
Natural gas | (2,419) | (2,323) | (3,126) | 4.1 | (22.6) |
Production taxes | (666) | (497) | (490) | 34.1 | 36.1 |
Others costs | (1,753) | (1,826) | (2,637) | (4.0) | (33.5) |
Services rendered, electricity, renewables, nitrogen products and others | (1,243) | (1,642) | (823) | (24.3) | 51.0 |
Operations from foreign subsidiaries | (804) | (1,006) | (1,145) | (20.1) | (29.8) |
Total | (42,141) | (34,612) | (43,854) | 21.8 | (3.9) |
4 |
Compared to 4Q20, the cost of goods sold increased by 21.8% in 1Q21, mainly due to higher production taxes and imports costs, which are directly correlated to Brent prices, and to the absence of the gain from the actuarial review of the health plan in 4Q20.
In addition to the increase in Brent prices, higher participation of imported crude oil in the processed feedstock and of imported oil products in the sales mix also contributed to higher import costs.
Operating Expenses
Table 6 – Operating expenses
Variation (%) | |||||
R$ million | 1Q21 | 4Q20 | 1Q20 | 1Q21 X 4Q20 | 1Q21 x 1Q20 |
Selling, General and Administrative Expenses | (6,694) | (6,522) | (7,734) | 2.6 | (13.4) |
Selling expenses | (5,198) | (6,049) | (5,914) | (14.1) | (12.1) |
Materials, third-party services, freight, rental and other related costs | (4,299) | (5,096) | (5,105) | (15.6) | (15.8) |
Depreciation, depletion and amortization | (814) | (825) | (549) | (1.3) | 48.3 |
Allowance for expected credit losses | 31 | 27 | (46) | 14.8 | − |
Employee compensation | (116) | (155) | (214) | (25.2) | (45.8) |
General and administrative | (1,496) | (473) | (1,820) | 216.3 | (17.8) |
Employee compensation | (1,013) | (89) | (1,277) | 1038.2 | (20.7) |
Materials, third-party services, freight, rental and other related costs | (351) | (331) | (416) | 6.0 | (15.6) |
Depreciation, depletion and amortization | (132) | (53) | (127) | 149.1 | 3.9 |
Exploration costs | (1,196) | (1,905) | (468) | (37.2) | 155.6 |
Research and Development Expenses | (639) | (536) | (422) | 19.2 | 51.4 |
Other taxes | (581) | (1,002) | (517) | (42.0) | 12.4 |
Impairment of assets | (508) | 30,970 | (65,301) | − | (99.2) |
Other (income and expenses), net | (1,530) | 6,471 | (1,174) | − | 30.3 |
Total | (11,148) | 27,476 | (75,616) | − | (85.3) |
Selling expenses fell 14% in 1Q21, when compared to 4Q20, in line with lower sales volumes.
The increase in general and administrative expenses reflects the absence of the R$ 1.2 billion actuarial gain relative to the health plan in 4Q20, partially offset by lower consulting costs and lower headcount.
There was a reduction in exploration costs, mainly due to higher write-offs in 4Q20 in the Espirito Santo and Campos basins.
In 1Q21, impairment was R$ 508 million, mainly due to the shut-down of platform P-33 in Campos basin.
There were other expenses of R$1.5 billion in 1Q21 as opposed to other revenues of R$ 6.5 billion in 4Q20, due to the absence of the gain from the actuarial review of the health plan carried out in 4Q20 and to lower gains from divestments, partially offset by the lower provision related to the variable compensation program and higher reimbursement from the Lava Jato operation.
Adjusted EBITDA
Adjusted EBITDA in 1Q21 reached R$ 48,9 billion, 4% higher than 4T20. This result reflects higher oil margins due to the appreciation of Brent prices, offset by lower sales volumes. In addition, excluding the effect of the absence of the gain from the actuarial review of the health plan, occurred in 4Q20, there were lower operating expenses impacting this metric.
5 |
Financial results
Table 7 – Financial results
Variation (%) | |||||
R$ million | 1Q21 | 4Q20 | 1Q20 | 1Q21 X 4Q20 | 1Q21 x 1Q20 |
Finance income | 676 | 777 | 798 | (13.0) | (15.3) |
Income from investments and marketable securities (Government Bonds) | 160 | 192 | 298 | (16.7) | (46.3) |
Other income, net | 516 | 585 | 500 | (11.8) | 3.2 |
Finance expenses | (6,613) | (7,816) | (7,416) | (15.4) | (10.8) |
Interest on finance debt | (4,119) | (4,184) | (4,545) | (1.6) | (9.4) |
Unwinding of discount on lease liabilities | (1,607) | (1,767) | (1,517) | (9.1) | 5.9 |
Discount and premium on repurchase of debt securities | (1,013) | (2,068) | (1,245) | (51.0) | (18.6) |
Capitalized borrowing costs | 1,154 | 1,267 | 1,234 | (8.9) | (6.5) |
Unwinding of discount on the provision for decommissioning costs | (1,027) | (747) | (853) | 37.5 | 20.4 |
Other finance expenses and income, net | (1) | (317) | (490) | (99.7) | (99.8) |
Foreign exchange gains (losses) and indexation charges | (24,811) | 13,851 | (14,560) | − | 70.4 |
Foreign exchange | (18,727) | 19,867 | (8,382) | − | 123.4 |
Reclassification of hedge accounting from Shareholders’ Equity to the Statement of Income | (6,095) | (6,134) | (6,449) | (0.6) | (5.5) |
PIS and COFINS monetary restatement - exclusion from VAT tax basis | − | (364) | − | − | − |
Other foreign exchange gains (losses) and indexation charges, net | 11 | 482 | 271 | (97.7) | (95.9) |
Total | (30,748) | 6,812 | (21,178) | − | 45.2 |
The financial result for 1Q21 was negative R$ 30.76 billion, compared to the R$ 6.8 billion revenue in 4Q20. We ended 1Q21 with an FX exposure of US$ 34.9 billion, compared to US$ 43.3 billion in 4Q20, with lower passive exposure in dollars.
Despite the lower FX exposure in 1Q21, there was an increase in foreign exchange losses, reaching R$ 18.7 billion, mainly due to the 9.6% depreciation of the Brazilian real over the US dollar against the appreciation of 7.9% in 4Q20. It is also worth mentioning the lower premium in the repurchase of bonds (R$ 1 billion) and the positive effects of active liability management, which made possible the reduction of finance expenses (R$ 4.1 billion).
Net income (loss) attributable to Petrobras’ shareholders
We recorded a net income of R$ 1.2 billion in 1Q21, R$ 58.7 billion lower than 4Q20, reflecting the impact of FX losses in the financial result due to the depreciation of the Brazilian real over the US dollar, as well as the reversals of impairment and of past expenditures with the health plan, both in 4Q20.
Recurring net income attributable to Petrobras’ shareholders and recurring adjusted EBITDA
In 1Q21, few non-recurring items impacted results. Excluding such items, mainly the impairment of R$ 508 million and the goodwill on the repurchase of bonds of R$ 1 billion, we would have had a net income of R$ 1.6 billion in 1Q21. Recurring EBITDA would have been R$ 47.8 billion, 34% higher than 4Q20.
6 |
Special Items
Table 8 – Special itens
Variation (%) | |||||
R$ million | 1Q21 | 4Q20 | 1Q20 | 1Q21 X 4Q20 | 1Q21 x 1Q20 |
Net income | 1,276 | 60,452 | (49,724) | (97.9) | − |
Nonrecurring items | (239) | 41,811 | (66,665) | − | (99.6) |
Nonrecurring items that do not affect Adjusted EBITDA | (1,430) | 29,866 | (67,244) | − | (97.9) |
Impairment of assets and investments | (699) | 29,235 | (65,559) | − | (98.9) |
Reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments | (183) | − | − | − | − |
Gains and losses on disposal / write-offs of assets | 257 | 1,925 | (446) | (86.6) | − |
Pis and Cofins inflation indexation charges - exclusion of ICMS (VAT tax) from the basis of calculation | − | (364) | − | − | − |
Discount and premium on repurchase of debt securities | (1,013) | (2,068) | (1,239) | (51.0) | (18.2) |
Inflation indexation charges on petroleum and alcohol accounts | − | 1,222 | − | − | − |
Financial update on state amnesty programs | 208 | (84) | − | − | − |
Other nonrecurring items | 1,191 | 11,945 | 579 | (90.0) | 105.7 |
PDV | 21 | 29 | (188) | (27.6) | − |
Amounts recovered from Lava Jato investigation | 790 | 282 | 97 | 180.1 | 714.4 |
Gains / (losses) on decommissioning of returned/abandoned areas | (35) | (1,671) | (6) | (97.9) | 483.3 |
State amnesty programs | 659 | 58 | − | − | − |
Gains (Losses) related to legal proceedings | − | − | 565 | − | − |
Equalization of expenses - Production Individualization Agreements | (244) | (40) | 111 | 510.0 | − |
PIS and COFINS over inflation indexation charges - exclusion of ICMS (VAT tax) from the basis of calculation | − | 22 | − | − | − |
PIS and COFINS recovered - exclusion of ICMS (VAT tax) from the basis of calculation | − | 203 | − | − | − |
Cost reversals of health care plan due to the revision in the company’s future obligations | − | 13,062 | − | − | − |
Net effect of nonrecurring items on IR / CSLL | (46) | (10,365) | 22,780 | (99.6) | − |
Recurring net income | 1,561 | 29,006 | (5,839) | (94.6) | − |
Petrobras Shareholders | 1,452 | 28,444 | (4,637) | (94.9) | − |
Non-controlling interests | 109 | 562 | (1,202) | (80.6) | − |
Adjusted EBITDA | 48,949 | 47,043 | 37,504 | 4.1 | 30.5 |
Non-recurring Items | 1,191 | 11,945 | 579 | (90.0) | 105.7 |
Recurring Adjusted EBITDA | 47,758 | 35,098 | 36,925 | 36.1 | 29.3 |
In management's opinion, the special items presented above, although related to the Company's business, were highlighted as complementary information for a better understanding and evaluation of the result. Such items do not necessarily occur in all periods and are disclosed when relevant.
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Capex
Investment amounts (Capex) encompass acquisition of property, plant and equipment, including costs with leasing, intangible assets, investments in subsidiaries and affiliates, costs with geology and geophysics, costs with research and development and pre-operating costs.
Table 9- Capex
Variation % | |||||
US$ million | 1Q21 | 4Q20 | 1Q20 | 1Q21 / 4Q20 | 1Q21 / 1Q20 |
Exploration and Production | 1,626 | 1,519 | 2,139 | 7.1 | (24.0) |
Refining, Transportation and Marketing | 193 | 354 | 171 | (45.6) | 12.9 |
Gas and Power | 63 | 83 | 86 | (24.5) | (26.4) |
Others | 32 | 93 | 37 | (66.0) | (15.3) |
Total | 1,913 | 2,049 | 2,433 | (6.6) | (21.3) |
In 1Q21, investments amounted US$ 1.9 billion, 7% below 4Q20 and 21% below 1Q20. More than 71% of capex is related to growth capex.
Growth investments are those with the main objective of increasing the capacity of existing assets, implementing new production systems up to the full ramp up, disposal and storage assets, increasing efficiency or profitability of the asset and implementing essential infrastructure to enable other growth projects. It includes acquisitions of assets / companies and remaining investments in systems that started in 2019, exploratory investments, and investments in R&D.
Sustaining investments, on the other hand, have the main objective of maintaining the operation of existing assets, they do not aim at increasing the capacity of the facilities. Includes investments in safety and reliability of installations, substitute well projects, complementary development, remaining investments in systems that entered before 2019, scheduled stoppages and revitalizations (without new systems), 4D seismic, HSE projects, line changes, infrastructure operational and ICT.
In 1Q21, investments in the Exploration and Production segment totaled US$ 1.6 billion, with approximately 78% related to growth. Investments were mainly concentrated in: (i) development of production in ultra-deep waters of the Santos Basin pre-salt (US$ 1 billion); (ii) exploratory investments (US$ 0.1 billion) and (iii) development of new projects in deep waters (US$ 0.1 billion).
In the Refining, Transportation and Marketing segment, investments totaled US$ 193 million in 1Q21, approximately 23% of which were growth investments. Investments in the Gas and Power segment totaled US$ 63 million in 1Q21, of which approximately 60% are investments in growth.
The following table presents the main information on the new, already contracted, oil and gas production systems.
8 |
Table 10 – Main Projects1*
Project | Start-up | FPSO capacity (bbl/day) | CAPEX Petrobras spent US$ bi | Total CAPEX3 Petrobras US$ bi | Petrobras Share | Status |
Sépia 1 FPSO Carioca (Chartered unit) | 2021 | 180000 | 0.91 | 2.2 | 97.6% | Project in phase of execution with production system under construction. 11 wells drilled and 10 completed |
Mero 1 FPSO Guanabara (Chartered unit) | 2022 | 180000 | 0.28 | 1.0 | 40.0% | Project in phase of execution with production system under construction. 11 wells drilled and 6 completed |
Búzios 5 FPSO Alm. Barroso (Chartered unit) | 2022 | 150000 | 0.49 | 2.3 | 100%¹ | Project in phase of execution with production system under construction. 6 wells drilled and 1 completed. |
Marlim 1 FPSO Anita Garibaldi (Chartered unit) | 2023 | 80000 | 0.10 | 2.1 | 100.0% | Project in phase of execution with production system under construction. 1 well drilled and 1 completed |
Marlim 2 FPSO Anna Nery (Chartered unit) | 2023 | 70000 | 0.03 | 1.6 | 100.0% | Project in phase of execution with production system under construction. |
Mero 2 FPSO Sepetiba (Chartered unit) | 2023 | 180000 | 0.02 | 0.8 | 40.0% | Project in phase of execution with production system under construction. 5 wells drilled and 2 completed |
Itapu P-71 (Owned unit) | 2023 | 150000 | 1,65² | 3.4 | 100.0% | Project in phase of execution with production system under construction. 3 wells drilled and 1 completed |
Mero 3 FPSO Marechal Duque de Caxias (Chartered unit) | 2024 | 180000 | 0.02 | 0.8 | 40.0% | Project in phase of execution with production system under construction. 3 wells drilled and 1 completed |
Búzios 6th module FPSO Almirante Tamandaré (Chartered unit) | 2024 | 225000 | 0.01 | 2.1 | 100%¹ | Project in phase of execution, letter of intent signed for charter of the platform in February 2021. 2 wells drilled |
Búzios 7th module P-78 (Owned unit) | 2025 | 180000 | 0.03 | 4.3 | 100%¹ | Project in phase of execution. Contract signed in May/2021 |
¹ Will change after the co-participation agreement ² In this quarter, the incorporation of P-71 was considered in the financial curve of the project, according to the relevant fact disclosed on October 27, 2020. 3 Does not include the amount related do chartered units |
9 |
Portfolio Management
In 2021, up to May, 11th, we concluded the sale of: Frade field, the wind power plants Mangue Seco 1, Mangue Seco 3 and Mangue Seco 4, Petrobras Uruguay Distribución (PUDSA), the remaining 10% stake in NTS and BSBios company. Cash inflows from those transactions, coupled with upfront cash inflows from the signing of Peroá and Miranga clusters divestments, totaled US$ 472 million in the period.
Table 11 – Amounts received up to May 11th, 2021 and respective transaction value
Asset | Amounts received (US$ million) | Transaction amount1 (US$ million) |
Mangue Seco 1 | 7.82 | 82 |
Mangue Seco 2 | - | 62 |
Mangue Seco 3 e 4 | 182 | 16.82 |
Frade field | 36 | 1003 |
Peroá cluster | 5.0 | 55 |
Miranga cluster | 11 | 220.1 |
PUDSA | 62 | 61.74 |
RLAM | - | 1,650 |
NTS (10%) | 2852 | 3332 |
UTE Camaçari Cluster | - | 17.6² |
BSBios | 47 | 60 |
Rabo Branco | 1.5 | |
Total | 472 | 2,529.7 |
¹ Amounts agreed in the signing date, subject to adjustments upon closing
² Original amounts in BRL, converted to US $ at the PTAX rate on the day of the SPA signing or of the cash inflow.
³Transaction signed in 2019
4Transaction signed in 2020
Petrobras reinforces the importance of portfolio management focusing on world-class assets in deep and ultra-deep waters, in order to improve our capital allocation, enable debt and capital cost reduction, and the consequent increase in value generation to the company and to our shareholders.
10 |
Liquidity and Capital Resources[1]
Table 12 - Liquidity and Capital Resources
R$ million | 1Q21 | 4Q20 | 1Q20 |
Adjusted cash and cash equivalents at the beginning of period | 64,354 | 75,443 | 33,309 |
Government bonds and time deposits with maturities of more than 3 months at the beginning of period* | (3,424) | (3,782) | (3,580) |
Cash and cash equivalents at the beginning of period | 60,930 | 71,661 | 29,729 |
Net cash provided by (used in) operating activities | 40,070 | 37,702 | 34,991 |
Net cash provided by (used in) investing activities | (7,427) | (1,835) | (6,664) |
Acquisition of PP&E and intangibles assets | (8,981) | (7,456) | (8,342) |
Addition (reduction) on investments | (4) | (3) | 15 |
Proceeds from disposal of assets - Divestment | 1,054 | 4,983 | 1,168 |
Dividends received | 366 | 220 | 200 |
Divestment (Investment) in marketable securities | 138 | 421 | 295 |
(=) Net cash provided by operating and investing activities | 32,643 | 35,867 | 28,327 |
Net cash provided by (used) in financing activities | (30,822) | (39,243) | 12,799 |
Net financings | (22,679) | (29,075) | 24,269 |
Proceeds from financing | 299 | 6,319 | 48,777 |
Repayments | (22,978) | (35,394) | (24,508) |
Repayment of lease liability | (8,040) | (8,110) | (6,822) |
Dividends paid to shareholders of Petrobras | − | (1,783) | (4,427) |
Dividends paid to non-controlling interest | (1) | (250) | (35) |
Investments by non-controlling interest | (102) | (25) | (186) |
Effect of exchange rate changes on cash and cash equivalents | 5,408 | (7,355) | 9,556 |
Cash and cash equivalents at the end of period | 68,159 | 60,930 | 80,411 |
Government bonds and time deposits with maturities of more than 3 months at the end of period* | 3,299 | 3,424 | 3,346 |
Adjusted cash and cash equivalents at the end of period | 71,458 | 64,354 | 83,757 |
Reconciliation of Free Cash Flow | |||
Net cash provided by operating activities | 40,070 | 37,702 | 34,991 |
Acquisition of PP&E and intangibles assets (except for the Bidding for oil surplus of Transfer of rights agreement and signature bonus) | (8,981) | (7,456) | (8,342) |
Investments in investees** | (4) | (3) | 15 |
Free cash flow | 31,085 | 30,243 | 26,664 |
As of March 31st, 2021, cash and cash equivalents were R$ 68.2 billion and adjusted cash and cash equivalents totaled R$ 71.5 billion.
In 1Q21, despite the reduction in sales volumes in the domestic and external markets and the higher built-up of inventories relative to 4Q20, there was an increase in net cash provided by operating activities, which reached R$ 40.1 billion, mainly due to the hike in Brent prices. Free cash flow reached R$ 31.1 billion in 1Q21.
This level of cash generation, alongside cash inflows from divestments of R$ 1.1 billion and cash and cash equivalents, were used: (i) to prepay debt and amortize principal and interest due in the period (R$ 23 billion) and (ii) to amortize lease liabilities (R$ 8 billion), reducing gross debt to R$ 404 billion (US$ 71 billion). In addition, CAPEX was R$ 9 billion.
In 1Q21, the company settled several loans and financial debts, amounting to R$ 23 billion, notably: (i) repayment of loans in the amount of R$ 6.1 billion, (ii) prepayment of banking loans in the domestic and international market totaling R$ 536 million and (iii) R$ 8 billion (US$ 1.4 billion) in the repurchase of global bonds previously issued by the Company in the capital market, with net premium paid to bond holders amounting to R$ 1 billion (iv) total prepayment of loans with export credit agencies, in the amount of R$ 1.3 billion.
[1] * Includes short-term government bonds and time deposits and cash and cash equivalents of companies classified as held for sale.
** In accordance with the Shareholders’ remuneration policy, the additions (reductions) in investments shall not be considered in the calculation
11 |
Conciliation EBITDA x OCF x FCF x FCFE
R$ billion
12 |
Debt
The cash flow generation and continuous liability management allowed a relevant reduction in our indebtedness. Gross debt reached US$ 71 billion, 6% lower than December 31st 2020, mainly due to debt prepayments. In April, there was a high volume of repayments and prepayments, in the amount of US$ 3.2 billion, which reinforces our commitment to deleveraging.
In addition, liability management helped increase the average maturity from 11.71 years to 11.84 years.
The Gross Debt/LTM adjusted EBITDA ratio decreased from 2.66x on December 31st, 2020 to 2.47x on March 31st, 2021.
Net debt reduced 7.5%, reaching US$ 58.4 billion. The Net Debt/LTM adjusted EBITDA ratio decreased from 2.22x on December 31st, 2020 to 2.03x on March 31st, 2021, the best recorded mark since 2012.
Table 13 – Debt indicators
US$ million | 03.31.2021 | 12.31.2020 | Δ % | 03.31.2020 |
Financial Debt | 50,317 | 53,888 | (6.6) | 66,702 |
Capital Markets | 28,393 | 30,137 | (5.8) | 33,329 |
Banking Market | 17,359 | 18,597 | (6.7) | 27,956 |
Development banks | 1,149 | 1,516 | (24.2) | 1,497 |
Export Credit Agencies | 3,210 | 3,424 | (6.3) | 3,683 |
Others | 206 | 214 | (3.7) | 237 |
Finance leases | 20,649 | 21,650 | (4.6) | 22,535 |
Gross debt | 70,966 | 75,538 | (6.1) | 89,237 |
Adjusted cash and cash equivalents | 12,542 | 12,370 | 1.4 | 16,106 |
Net debt | 58,424 | 63,168 | (7.5) | 73,131 |
Net Debt/(Net Debt + Market Cap) - Leverage | 51% | 47% | 8.5 | 67% |
Average interest rate (% p.a.) | 6.0 | 5.9 | 1.7 | 5.6 |
Weighted average maturity of outstanding debt (years) | 11.84 | 11.71 | 1.1 | 9.74 |
Net debt / LTM Adjusted EBITDA ratio | 2.03 | 2.22 | (8.6) | 2.15 |
Gross debt / LTM Adjusted EBITDA ratio | 2.47 | 2.66 | (7.1) | 2.63 |
R$ million | ||||
Financial Debt | 286,672 | 280,038 | 2.4 | 346,764 |
Finance Lease | 117,644 | 112,510 | 4.6 | 117,153 |
Adjusted cash and cash equivalents | 71,454 | 64,280 | 11.2 | 83,730 |
Net Debt | 332,862 | 328,268 | 1.4 | 380,186 |
13 |
Results by Segment
Exploration and Production
Table 14 – E&P results
Variation (%) | |||||
R$ million | 1Q21 | 4Q20 | 1Q20 | 1Q21 X 4Q20 | 1Q21 x 1Q20 |
Sales revenues | 63,952 | 48,467 | 47,575 | 31.9 | 34.4 |
Gross profit | 35,316 | 26,625 | 21,351 | 32.6 | 65.4 |
Operating expenses | (2,888) | 24,312 | (65,967) | − | (95.6) |
Operating income (loss) | 32,428 | 50,937 | (44,616) | (36.3) | − |
Net income (loss) attributable to the shareholders of Petrobras | 21,533 | 33,495 | (30,205) | (35.7) | − |
Adjusted EBITDA of the segment | 44,163 | 29,364 | 32,420 | 50.4 | 36.2 |
EBITDA margin of the segment (%) | 69 | 61 | 68 | 8.5 | 0.9 |
Average Brent crude (US$/bbl) | 60.90 | 44.23 | 50.26 | 37.7 | 21.2 |
Sales price - Brazil | |||||
Crude oil (US$/bbl) | 57.32 | 43.29 | 49.96 | 32.4 | 14.7 |
Lifting cost - Brazil (US$/boe)* | |||||
excluding production taxes and leases | 4.91 | 5.61 | 5.88 | (12.5) | (16.5) |
excluding production taxes | 6.66 | 7.19 | 7.51 | (7.4) | (11.3) |
Onshore and shallow waters | |||||
with leases | 12.37 | 12.87 | 20.30 | (3.9) | (39.1) |
excluding lease | 12.37 | 12.33 | 19.41 | 0.3 | (36.3) |
Deep and ultra-deep post-salt | |||||
with leases | 11.11 | 12.63 | 10.84 | (12.1) | 2.5 |
excluding leases | 9.39 | 11.23 | 9.26 | (16.4) | 1.4 |
Pre-salt | |||||
with leases | 4.63 | 4.47 | 4.52 | 3.5 | 2.4 |
excluding leases | 2.70 | 2.71 | 2.79 | (0.5) | (3.2) |
including production taxes and excluding leases | 16.11 | 13.06 | 12.85 | 23.3 | 25.4 |
including production taxes and leases | 17.87 | 14.64 | 14.47 | 22.1 | 23.5 |
Production taxes - Brazil | 12,934 | 8,255 | 8,200 | 56.7 | 57.7 |
Royalties | 6,520 | 4,582 | 4,254 | 42.3 | 53.3 |
Special participation | 6,366 | 3,620 | 3,899 | 75.9 | 63.3 |
Retention of areas | 48 | 53 | 47 | (9.4) | 2.1 |
In 1Q21, gross profit reached R$ 35.3 billion, an increase of 33% when compared to 4Q20. This increase was due to higher revenues and was partially offset by higher production taxes, both mainly due to higher Brent prices. Operating profit was 36% lower than in 4Q20, mainly due to the reversal of impairment losses, which occurred in 4Q20.
When compared to 1Q20, gross profit increased by 65% in 1Q21, mainly reflecting higher Brent prices. Operating profit was US$ 32.4 billion, a higher result mainly due to impairment losses occurred in 1Q20.
Lifting cost in 1Q21, without production taxes and without leases, was US$ 4.91/boe, which represents a 13% reduction compared to 4Q20. The result is due to lower expenses with integrity, such as maintenance and subsea inspections, which were concentrated in 4Q20.
When compared to 1Q20, lifting cost without production taxes and without leases decreased by 17%. This drop is explained by the 23% depreciation of the real against the dollar, the mothballing of shallow water platforms, divestments, and the start-up of P-70.
14 |
In the pre-salt, lifting cost remained stable in 1Q21. We continue to observe the maintenance of low unit costs, at levels below US$ 3/boe.
In the post-salt layer, lifting cost decreased 16% compared to 4Q20, due to lower expenses with maintenance and subsea inspections.
In onshore and shallow water assets, lifting cost in 1Q21 remained stable compared to the previous quarter.
Higher production taxes in 1Q21 are explained by higher Brent prices.
15 |
Refining, Transportation and Marketing
Table 15 - RTM results
Variation (%) | |||||
R$ million | 1Q21 | 4Q20 | 1Q20 | 1Q21 x 4Q20 | 1Q21 x 1Q20 |
Sales revenues | 76,741 | 65,163 | 68,160 | 17.8 | 12.6 |
Gross profit (Loss) | 11,766 | 6,615 | (2) | 77.9 | − |
Operating expenses | (2,186) | 266 | (4,080) | − | (46.4) |
Operating Income (Loss) | 9,580 | 6,881 | (4,082) | 39.2 | − |
Net income (loss) attributable to the shareholders of Petrobras | 6,939 | 5,109 | (3,397) | 35.8 | − |
Adjusted EBITDA of the segment | 12,464 | 6,495 | (1,292) | 91.9 | − |
EBITDA margin of the segment (%) | 16 | 10 | (2) | 627.4 | 1813.7 |
Refining cost (US$/barrel) - Brazil | 1.61 | 1.47 | 2.26 | 9.5 | (28.8) |
Refining cost (R$/barrel) - Brazil | 8.82 | 7.80 | 9.87 | 13.1 | (10.6) |
Domestic basic oil products price (R$/bbl) | 350.07 | 269.08 | 286.63 | 30.1 | 22.1 |
In 1Q21, gross profit was R$ 5.15 million higher than 4Q20 due to a higher inventory turnover effect between quarters, with a variation of approximately R$ 6.13 billion, which reflect the increase in Brent prices in 1Q21 (the positive inventory turnover effect was R$ 8.97 billion in 1Q21 and R$ 2.84 billion in 4Q20). Excluding the inventory turnover effect, gross profit would have been R$ 2.79 billion in 1Q21 and R$ 3.77 billion in 4Q20.
In 1Q20, there were higher margins for oil products in the domestic market, especially diesel and gasoline, partially offset by lower LPG margins and lower sales volumes. There were better margins in crude oil and fuel oil exports, partially offset by lower volumes of exported oil.
The increase in operating income reflects the higher gross profit. Operating expenses increased in 1Q21 due to the positive effect in 4Q20 relative to the impairment reversal of Comperj and gains on the sale of Liquigás. Excluding these effects, operating expenses were lower, mainly reflecting the reduction in sales expenses due to lower sales volumes.
16 |
Gas and Power
Table 16 - Gas and Power results
Variation (%) | |||||
R$ million | 1Q21 | 4Q20 | 1Q20 | 1Q21 X 4Q20 | 1Q21 x 1Q20 |
Sales revenues | 12,087 | 12,142 | 10,467 | (0.5) | 15.5 |
Gross profit | 4,816 | 5,329 | 4,562 | (9.6) | 5.6 |
Operating expenses | (4,103) | (3,969) | (3,016) | 3.4 | 36.0 |
Operating income (loss) | 713 | 1,360 | 1,546 | (47.6) | (53.9) |
Net income (loss) attributable to the shareholders of Petrobras | 558 | 1,061 | 937 | (47.4) | (40.4) |
Adjusted EBITDA of the segment | 1,784 | 2,315 | 2,200 | (22.9) | (18.9) |
EBITDA margin of the segment (%) | 15 | 19 | 21 | (4.0) | (6.0) |
Natural gas sales price - Brazil (US$/bbl) | 34.04 | 30.82 | 41.44 | 10.4 | (17.9) |
In 1Q21, gross profit was R$ 4.8 billion, a reduction of 10% when compared to 4Q20, as a result of lower margins in energy generation and lower margins in gas commercialization, both resulting from higher acquisition costs for gas, mainly due to the increase in the regasified LNG costs, given the increase in consumption due to the harsh winter and restrictions on supply.
In 1Q21, operating income was R$ 646 million lower than 4Q20, mainly due to (i) lower gross profit, (ii) higher tax expenses, (iii) reversal of impairment in Baixada Santista Energia S.A, occurred in 4Q20, and (iv) higher sales expenses due to contractual readjustment in transportation tariffs.
17 |
Reconciliation of Adjusted EBITDA
EBITDA is an indicator calculated as the net income for the period plus taxes on profit, net financial result, depreciation and amortization. Petrobras announces EBITDA, as authorized by CVM Instruction 527 of October 2012.
In order to reflect the management view regarding the formation of the company's current business results, EBITDA is also presented adjusted (Adjusted EBITDA) as a result of: investments, impairment, results with divestments and write-off of assets, and reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments.
Adjusted EBITDA, reflecting the sum of the last twelve months (Last Twelve Months), also represents an alternative to the company's operating cash generation. This measure is used to calculate the Gross Debt to Adjusted EBITDA metric, helping to evaluate the company's leverage and liquidity.
EBITDA and Adjusted EBITDA are not provided for in International Financial Reporting Standards (IFRS) and should not serve as a basis for comparison with those disclosed by other companies and should not be considered as a substitute for any other measure calculated in accordance with IFRS. These measures should be considered in conjunction with other measures and indicators for a better understanding of the company's performance and financial condition.
Table 17 - Adjusted EBITDA Reconciliation
Variation (%) | |||||
R$ million | 1Q21 | 4Q20 | 1Q20 | 1Q21 X 4Q20 | 1Q21 x 1Q20 |
Net income (loss) | 1,276 | 60,452 | (49,724) | (97.9) | − |
Net finance income (expense) | 30,748 | (6,812) | 21,178 | − | 45.2 |
Income taxes | 1,880 | 14,369 | (16,894) | (86.9) | − |
Depreciation, depletion and amortization | 15,630 | 12,102 | 15,758 | 29.2 | (0.8) |
EBITDA | 49,534 | 80,111 | (29,682) | (38.2) | − |
Share of earnings in equity-accounted investments | (1,019) | (173) | 1,439 | 489.0 | − |
Impairment losses / (reversals) | 508 | (30,970) | 65,301 | − | (99.2) |
Reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments | 183 | − | − | − | − |
Gains/ losses on disposal/ write-offs of non-current assets | (257) | (1,925) | 446 | (86.6) | − |
Foreign exchange gains or losses on material provisions for legal proceedings | − | − | − | − | − |
Adjusted EBITDA | 48,949 | 47,043 | 37,504 | 4.1 | 30.5 |
Total Adjusted EBITDA | 48,949 | 47,043 | 37,504 | 4.1 | 30.5 |
Adjusted EBITDA margin (%) | 57 | 63 | 50 | (6.0) | 7.3 |
18 |
FINANCIAL STATEMENTS
Table 18 - Income Statement - Consolidated
R$ million | 1Q21 | 4Q20 | 1Q20 |
Sales revenues | 86,174 | 74,972 | 75,469 |
Cost of sales | (42,141) | (34,612) | (43,854) |
Gross profit | 44,033 | 40,360 | 31,615 |
Selling expenses | (5,198) | (6,049) | (5,914) |
General and administrative expenses | (1,496) | (473) | (1,820) |
Exploration costs | (1,196) | (1,905) | (468) |
Research and development expenses | (639) | (536) | (422) |
Other taxes | (581) | (1,002) | (517) |
Impairment of assets | (508) | 30,970 | (65,301) |
Other income and expenses | (1,530) | 6,471 | (1,174) |
(11,148) | 27,476 | (75,616) | |
Operating income (loss) | 32,885 | 67,836 | (44,001) |
Finance income | 676 | 777 | 798 |
Finance expenses | (6,613) | (7,816) | (7,416) |
Foreign exchange gains (losses) and inflation indexation charges | (24,811) | 13,851 | (14,560) |
Net finance income (expense) | (30,748) | 6,812 | (21,178) |
Results in equity-accounted investments | 1,019 | 173 | (1,439) |
Income (loss) before income taxes | 3,156 | 74,821 | (66,618) |
Income taxes | (1,880) | (14,369) | 16,894 |
Net Income (Loss) | 1,276 | 60,452 | (49,724) |
Net income (loss) attributable to: | |||
Shareholders of Petrobras | 1,167 | 59,890 | (48,523) |
Non-controlling interests | 109 | 562 | (1,201) |
19 |
Table 19 - Statement of Financial Position – Consolidated
ASSETS - R$ million | 03.31.21 | 12.31.20 |
Current assets | 153,972 | 142,323 |
Cash and cash equivalents | 68,155 | 60,856 |
Marketable securities | 3,299 | 3,424 |
Trade and other receivables, net | 13,432 | 24,584 |
Inventories | 39,730 | 29,500 |
Recoverable taxes | 8,552 | 13,483 |
Assets classified as held for sale | 11,650 | 4,081 |
Other current assets | 9,154 | 6,395 |
Non-current assets | 844,311 | 845,096 |
Long-term receivables | 113,969 | 104,974 |
Trade and other receivables, net | 14,666 | 13,675 |
Marketable securities | 231 | 227 |
Judicial deposits | 38,881 | 37,838 |
Deferred taxes | 40,807 | 33,524 |
Other tax assets | 16,630 | 16,411 |
Other non-current assets | 2,754 | 3,299 |
Investments | 18,044 | 17,010 |
Property, plant and equipment | 634,712 | 645,434 |
Intangible assets | 77,586 | 77,678 |
Total assets | 998,283 | 987,419 |
LIABILITIES - R$ million | 03.31.21 | 12.31.20 |
Current liabilities | 124,469 | 136,287 |
Trade payables | 29,057 | 35,645 |
Finance debt | 18,755 | 21,751 |
Lease liability | 30,594 | 29,613 |
Taxes payable | 15,381 | 14,725 |
Dividends payable | 4,482 | 4,457 |
Short-term benefits | 9,655 | 10,150 |
Pension and medical benefits | 3,679 | 8,049 |
Liabilities related to assets classified as held for sale | 3,966 | 3,559 |
Other current liabilities | 8,900 | 8,338 |
Non-current liabilities | 553,569 | 539,982 |
Finance debt | 267,917 | 258,287 |
Lease liability | 87,050 | 82,897 |
Income Tax payable | 1,802 | 1,853 |
Deferred taxes | 1,205 | 1,015 |
Pension and medical benefits | 76,306 | 75,454 |
Provision for legal and administrative proceedings | 10,334 | 11,427 |
Provision for decommisioning costs | 96,637 | 97,595 |
Other non-current liabilities | 12,318 | 11,454 |
Shareholders´ equity | 320,245 | 311,150 |
Share capital (net of share issuance costs) | 205,432 | 205,432 |
Profit reserves and others | 107,963 | 102,978 |
Non-controlling interests | 6,850 | 2,740 |
Total liabilities and shareholders´ equity | 998,283 | 987,419 |
20 |
Table 20 - Statement of Cash Flows – Consolidated
R$ million | 1Q21 | 4Q20 | 1Q20 |
Net income for the period | 1,276 | 60,452 | (49,724) |
Adjustments for: | |||
Pension and medical benefits (actuarial expense) | 1,726 | (11,109) | 2,157 |
Results of equity-accounted investments | (1,019) | (173) | 1,439 |
Depreciation, depletion and amortization | 15,630 | 12,102 | 15,758 |
Impairment of assets (reversal) | 508 | (30,970) | 65,301 |
Inventory write-down (write-back) to net realizable value | (6) | − | 1,389 |
Allowance (reversals) for impairment of trade and other receivables | (86) | 105 | 474 |
Exploratory expenditures write-offs | 740 | 1,199 | 117 |
Disposal/write-offs of assets and remeasurement of investment retained with loss of control | (74) | (1,925) | 446 |
Foreign exchange, indexation and finance charges | 30,244 | (6,837) | 18,440 |
Deferred income taxes, net | 1,231 | 12,871 | (17,491) |
Revision and unwinding of discount on the provision for decommissioning costs | 1,062 | 2,418 | 858 |
PIS and COFINS monetary restatement - exclusion from VAT tax basis | − | 456 | − |
Early termination and changes on payments of lease agreements | (395) | (518) | (456) |
Decrease (Increase) in assets | |||
Trade and other receivables, net | (479) | 251 | 4,090 |
Inventories | (10,793) | (8) | 2,558 |
Judicial deposits | (839) | 252 | (1,961) |
Other assets | 137 | (1,481) | (1,523) |
Increase (Decrease) in liabilities | |||
Trade payables | 3,375 | 266 | (3,242) |
Other taxes payable | 6,106 | 6,437 | (2,143) |
Income taxes paid | (710) | (170) | (1,120) |
Pension and medical benefits | (5,253) | (1,231) | (1,614) |
Provision for legal proceedings | (1,159) | 65 | (645) |
Short-term benefits | (468) | (1,548) | (493) |
Provision for decommissioning costs | (887) | (909) | (546) |
Other liabilities | 203 | (2,293) | 2,922 |
Net cash from operating activities | 40,070 | 37,702 | 34,991 |
Cash flows from Investing activities | |||
Acquisition of PP&E and intangibles assets | (8,981) | (7,456) | (8,342) |
Investments in investees | (4) | (3) | 15 |
Proceeds from disposal of assets - Divestment | 1,054 | 4,983 | 1,168 |
Divestment (Investment) in marketable securities | 138 | 421 | 295 |
Dividends received | 366 | 220 | 200 |
Net cash (provided) used in investing activities | (7,427) | (1,835) | (6,664) |
Cash flows from Financing activities | |||
Investments by non-controlling interest | (102) | (25) | (186) |
Financing and loans, net: | |||
Proceeds from financing | 299 | 6,319 | 48,777 |
Repayment of finance debt - principal | (17,080) | (32,717) | (19,570) |
Repayment of finance debt - interest | (5,898) | (2,677) | (4,938) |
Repayment of lease liability | (8,040) | (8,110) | (6,822) |
Dividends paid to shareholders of Petrobras | − | (1,783) | (4,427) |
Dividends paid to non-controlling interests | (1) | (250) | (35) |
Net cash provided (used) in financing activities | (30,822) | (39,243) | 12,799 |
Effect of exchange rate changes on cash and cash equivalents | 5,408 | (7,355) | 9,556 |
Net increase / (decrease) in cash and cash equivalents | 7,229 | (10,731) | 50,682 |
Cash and cash equivalents at the beginning of the period | 60,930 | 71,661 | 29,729 |
Cash and cash equivalents at the end of the period | 68,159 | 60,930 | 80,411 |
21 |
SEGMENT INFORMATION
Table 21 - Consolidated Income Statement by Segment – 1Q21
R$ million | E&P | REFINING | GAS & POWER | CORP. | ELIMIN. | TOTAL |
Sales revenues | 63,952 | 76,741 | 12,087 | 836 | (67,442) | 86,174 |
Intersegments | 62,783 | 1,282 | 3,026 | 351 | (67,442) | − |
Third parties | 1,169 | 75,459 | 9,061 | 485 | − | 86,174 |
Cost of sales | (28,636) | (64,975) | (7,271) | (823) | 59,564 | (42,141) |
Gross profit | 35,316 | 11,766 | 4,816 | 13 | (7,878) | 44,033 |
Expenses | (2,888) | (2,186) | (4,103) | (1,943) | (28) | (11,148) |
Selling expenses | (1) | (1,839) | (3,301) | (29) | (28) | (5,198) |
General and administrative expenses | (178) | (180) | (94) | (1,044) | − | (1,496) |
Exploration costs | (1,196) | − | − | − | − | (1,196) |
Research and development expenses | (467) | (11) | (27) | (134) | − | (639) |
Other taxes | (91) | (220) | (127) | (143) | − | (581) |
Impairment of assets | (538) | − | − | 30 | − | (508) |
Other income and expenses | (417) | 64 | (554) | (623) | − | (1,530) |
Operating income (loss) | 32,428 | 9,580 | 713 | (1,930) | (7,906) | 32,885 |
Net finance income (expense) | − | − | − | (30,748) | − | (30,748) |
Results in equity-accounted investments | 126 | 616 | 215 | 62 | − | 1,019 |
Income (loss) before income taxes | 32,554 | 10,196 | 928 | (32,616) | (7,906) | 3,156 |
Income taxes | (11,025) | (3,257) | (242) | 9,956 | 2,688 | (1,880) |
Net income (loss) | 21,529 | 6,939 | 686 | (22,660) | (5,218) | 1,276 |
Net income (loss) attributable to: | ||||||
Shareholders of Petrobras | 21,533 | 6,939 | 558 | (22,645) | (5,218) | 1,167 |
Non-controlling interests | (4) | − | 128 | (15) | − | 109 |
Table 22 - Consolidated Income Statement by Segment – 1Q20
R$ million | E&P | REFINING | GAS & POWER | CORP. | ELIMIN. | TOTAL |
Sales revenues | 47,575 | 68,160 | 10,467 | 857 | (51,590) | 75,469 |
Intersegments | 46,658 | 1,328 | 3,336 | 268 | (51,590) | − |
Third parties | 917 | 66,832 | 7,131 | 589 | − | 75,469 |
Cost of sales | (26,224) | (68,162) | (5,905) | (830) | 57,267 | (43,854) |
Gross profit | 21,351 | (2) | 4,562 | 27 | 5,677 | 31,615 |
Expenses | (65,967) | (4,080) | (3,016) | (2,521) | (32) | (75,616) |
Selling expenses | (1) | (2,860) | (3,006) | (18) | (29) | (5,914) |
General and administrative expenses | (206) | (272) | (117) | (1,225) | − | (1,820) |
Exploration costs | (468) | − | − | − | − | (468) |
Research and development expenses | (274) | (12) | (13) | (123) | − | (422) |
Other taxes | (71) | (193) | (37) | (216) | − | (517) |
Impairment of assets | (64,304) | (208) | − | (789) | − | (65,301) |
Other income and expenses | (643) | (535) | 157 | (150) | (3) | (1,174) |
Operating income (loss) | (44,616) | (4,082) | 1,546 | (2,494) | 5,645 | (44,001) |
Net finance income (expense) | − | − | − | (21,178) | − | (21,178) |
Results in equity-accounted investments | (758) | (848) | (12) | 179 | − | (1,439) |
Income (loss) before income taxes | (45,374) | (4,930) | 1,534 | (23,493) | 5,645 | (66,618) |
Income taxes | 15,169 | 1,388 | (526) | 2,782 | (1,919) | 16,894 |
Net income (loss) | (30,205) | (3,542) | 1,008 | (20,711) | 3,726 | (49,724) |
Net income (loss) attributable to: | ||||||
Shareholders of Petrobras | (30,205) | (3,397) | 937 | (19,584) | 3,726 | (48,523) |
Non-controlling interests | − | (145) | 71 | (1,127) | − | (1,201) |
22 |
Table 23 - Consolidated Income Statement by Segment – 4Q20
R$ million | E&P | REFINING | GAS & POWER | CORP. | ELIMIN. | TOTAL |
Sales revenues | 48,467 | 65,163 | 12,142 | 1,281 | (52,081) | 74,972 |
Intersegments | 47,267 | 1,304 | 3,104 | 406 | (52,081) | − |
Third parties | 1,200 | 63,859 | 9,038 | 875 | − | 74,972 |
Cost of sales | (21,842) | (58,548) | (6,813) | (1,189) | 53,780 | (34,612) |
Gross profit | 26,625 | 6,615 | 5,329 | 92 | 1,699 | 40,360 |
Expenses | 24,312 | 266 | (3,969) | 6,887 | (20) | 27,476 |
Selling expenses | (1) | (2,710) | (3,286) | (24) | (28) | (6,049) |
General and administrative expenses | (139) | (14) | (100) | (220) | − | (473) |
Exploration costs | (1,905) | − | − | − | − | (1,905) |
Research and development expenses | (353) | (16) | (31) | (136) | − | (536) |
Other taxes | (86) | (264) | (66) | (586) | − | (1,002) |
Impairment of assets | 29,926 | 1,067 | 19 | (42) | − | 30,970 |
Other income and expenses | (3,130) | 2,203 | (505) | 7,895 | 8 | 6,471 |
Operating income (loss) | 50,937 | 6,881 | 1,360 | 6,979 | 1,679 | 67,836 |
Net finance income (expense) | − | − | − | 6,812 | − | 6,812 |
Results in equity-accounted investments | (129) | 627 | 248 | (573) | − | 173 |
Income (loss) before income taxes | 50,808 | 7,508 | 1,608 | 13,218 | 1,679 | 74,821 |
Income taxes | (17,318) | (2,340) | (463) | 6,322 | (570) | (14,369) |
Net income (loss) | 33,490 | 5,168 | 1,145 | 19,540 | 1,109 | 60,452 |
Net income (loss) attributable to: | ||||||
Shareholders of Petrobras | 33,495 | 5,109 | 1,061 | 19,116 | 1,109 | 59,890 |
Non-controlling interests | (5) | 59 | 84 | 424 | − | 562 |
23 |
Table 24 - Other Income (Expenses) by Segment – 1Q21
R$ millions | E&P | REFINING | GAS & POWER | CORP. | ELIMIN. | TOTAL |
Unscheduled stoppages and pre-operating expenses | (1,596) | (7) | (32) | (6) | − | (1,641) |
Pension and medical benefits - retirees | − | − | − | (1,189) | − | (1,189) |
Variable compensation program | (208) | (119) | (22) | (179) | − | (528) |
Equalization of expenses - Production Individualization Agreements | (244) | − | − | − | − | (244) |
Realization of comprehensive income due to the sale of equity interest | − | − | − | (183) | − | (183) |
Profit Share | (64) | (41) | (6) | (46) | − | (157) |
Gains/(losses) with Commodities Derivatives | − | − | − | (126) | − | (126) |
Result Related to Decommissioning | (35) | − | − | − | − | (35) |
PIS and Cofins recovered - VAT tax exclusion from PIS and Cofins tax basis | − | − | − | − | − | − |
Voluntary Separation Incentive Plan - PDV | (6) | (10) | 1 | 36 | − | 21 |
Fines imposed on suppliers | 129 | 11 | 10 | 10 | − | 160 |
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control | 675 | 66 | (489) | 5 | − | 257 |
Gains / (losses) related to legal, administrative and arbitration proceedings | (237) | 229 | − | 302 | − | 294 |
Early Contract Terminations | 411 | (19) | 10 | (7) | − | 395 |
Expenses/Reimbursements from E&P partnership operations | 552 | − | − | − | − | 552 |
Amounts recovered from Lava Jato investigation | − | − | − | 790 | − | 790 |
Others | 206 | (46) | (26) | (30) | − | 104 |
(417) | 64 | (554) | (623) | − | (1,530) |
24 |
Table 25 - Other Income (Expenses) by Segment – 1Q20
R$ millions | E&P | REFINING | GAS & POWER | CORP. | ELIMIN. | TOTAL |
Unscheduled stoppages and pre-operating expenses | (1,371) | (11) | (194) | (8) | − | (1,584) |
Pension and medical benefits - retirees | − | − | − | (1,327) | − | (1,327) |
Variable compensation program | 76 | 32 | 3 | 60 | − | 171 |
Equalization of expenses - Production Individualization Agreements | 111 | − | − | − | − | 111 |
Realization of comprehensive income due to the sale of equity interest | − | − | − | − | − | − |
Profit Share | − | (25) | − | − | − | (25) |
Gains/(losses) with Commodities Derivatives | − | − | − | 1,037 | − | 1,037 |
Result Related to Area Dismantling | (6) | − | − | − | − | (6) |
PIS and Cofins recovered - VAT tax exclusion from PIS and Cofins tax basis | − | − | − | − | − | − |
Voluntary Separation Incentive Plan - PDV | (87) | (63) | (3) | (34) | − | (187) |
Fines imposed on suppliers | 213 | 6 | 4 | 2 | − | 225 |
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control | (322) | (99) | (42) | 17 | − | (446) |
Gains / (losses) related to legal, administrative and arbitration proceedings | (636) | (257) | 334 | 278 | − | (281) |
Early Contract Terminations | 370 | − | 64 | 23 | − | 457 |
Expenses/Reimbursements from E&P partnership operations | 856 | − | − | − | − | 856 |
Amounts recovered from Lava Jato investigation | − | − | − | 96 | − | 96 |
Others | 153 | (118) | (9) | (294) | (3) | (271) |
(643) | (535) | 157 | (150) | (3) | (1,174) |
25 |
Table 26 - Other Income (Expenses) by Segment – 4Q20
R$ million | E&P | REFINING | GAS & POWER | CORP. | ELIMIN. | TOTAL |
Unscheduled stoppages and pre-operating expenses | (1,660) | (5) | (131) | (6) | − | (1,802) |
Pension and medical benefits - retirees | − | − | − | 8,119 | − | 8,119 |
Variable compensation program | (1,079) | (535) | (95) | (626) | − | (2,335) |
Equalization of expenses - Production Individualization Agreements | (39) | − | − | (1) | − | (40) |
Realization of comprehensive income due to the sale of equity interest | − | − | − | − | − | − |
Profit Share | (3) | 50 | − | − | − | 47 |
Gains/(losses) with Commodities Derivatives | − | − | − | (34) | − | (34) |
Result Related to Area Dismantling | (1,671) | − | − | − | − | (1,671) |
PIS and Cofins recovered - VAT tax exclusion from PIS and Cofins tax basis | − | 265 | 169 | (231) | − | 203 |
Voluntary Separation Incentive Plan - PDV | (172) | (63) | (15) | 279 | − | 29 |
Fines imposed on suppliers | 68 | (26) | 7 | 11 | − | 60 |
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control | (3) | 2,270 | (402) | 60 | − | 1,925 |
Gains / (losses) related to legal, administrative and arbitration proceedings | (555) | (149) | 55 | 110 | − | (539) |
Early Contract Terminations | 502 | (22) | − | 36 | − | 516 |
Expenses/Reimbursements from E&P partnership operations | 1,261 | − | − | − | − | 1,261 |
Amounts recovered from Lava Jato investigation | 50 | − | − | 232 | − | 282 |
Others | 171 | 418 | (93) | (54) | 8 | 450 |
(3,130) | 2,203 | (505) | 7,895 | 8 | 6,471 |
26 |
Table 27 - Consolidated Assets by Segment – 03.31.2021
R$ million | E&P | REFINING | GAS & POWER | CORP. | ELIMIN. | TOTAL |
Total assets | 614,115 | 187,980 | 54,522 | 172,412 | (30,746) | 998,283 |
Current assets | 19,705 | 73,782 | 12,283 | 78,948 | (30,746) | 153,972 |
Non-current assets | 594,410 | 114,198 | 42,239 | 93,464 | − | 844,311 |
Long-term receivables | 25,241 | 10,117 | 4,250 | 74,361 | − | 113,969 |
Investments | 2,308 | 2,783 | 3,310 | 9,643 | − | 18,044 |
Property, plant and equipment | 491,180 | 100,790 | 34,037 | 8,705 | − | 634,712 |
Operating assets | 435,760 | 87,478 | 21,632 | 7,209 | − | 552,079 |
Assets under construction | 55,420 | 13,312 | 12,405 | 1,496 | − | 82,633 |
Intangible assets | 75,681 | 508 | 642 | 755 | − | 77,586 |
Table 28 - Consolidated Assets by Segment – 12.31.2020
R$ million | E&P | REFINING | GAS & POWER | CORP. | ELIMIN. | TOTAL |
Total assets | 625,054 | 166,547 | 53,505 | 160,113 | (17,800) | 987,419 |
Current assets | 27,713 | 42,455 | 10,264 | 79,700 | (17,809) | 142,323 |
Non-current assets | 597,341 | 124,092 | 43,241 | 80,413 | 9 | 845,096 |
Long-term receivables | 24,657 | 13,196 | 5,070 | 62,042 | 9 | 104,974 |
Investments | 2,026 | 2,081 | 3,152 | 9,751 | − | 17,010 |
Property, plant and equipment | 494,838 | 108,308 | 34,373 | 7,915 | − | 645,434 |
Operating assets | 441,285 | 95,122 | 22,345 | 6,427 | − | 565,179 |
Assets under construction | 53,553 | 13,186 | 12,028 | 1,488 | − | 80,255 |
Intangible assets | 75,820 | 507 | 646 | 705 | − | 77,678 |
27 |
Table 29 - Reconciliation of Consolidated Adjusted EBITDA Statement by Segment – 1Q21
R$ million | E&P | REFINING | GAS & POWER | CORP. | ELIMIN. | Rever Tradução |
Net income (loss) | 21,529 | 6,939 | 686 | (22,660) | (5,218) | 1,276 |
Net finance income (expense) | − | − | − | 30,748 | − | 30,748 |
Income taxes | 11,025 | 3,257 | 242 | (9,956) | (2,688) | 1,880 |
Depreciation, depletion and amortization | 11,872 | 2,950 | 582 | 226 | − | 15,630 |
EBITDA | 44,426 | 13,146 | 1,510 | (1,642) | (7,906) | 49,534 |
Results in equity-accounted investments | (126) | (616) | (215) | (62) | − | (1,019) |
Impairment | 538 | − | − | (30) | − | 508 |
Reclassification of cumulative translation adjustment - CTA | − | − | − | 183 | − | 183 |
Results on disposal / write-offs of assets and on remeasurement of investment retained with loss of control | (675) | (66) | 489 | (5) | − | (257) |
Adjusted EBITDA | 44,163 | 12,464 | 1,784 | (1,556) | (7,906) | 48,949 |
Table 30 - Reconciliation of Consolidated Adjusted EBITDA Statement by Segment – 1Q20
R$ millions | E&P | REFINING | GAS & POWER | CORP. | ELIMIN. | Rever Tradução |
Net income (loss) | (30,205) | (3,542) | 1,008 | (20,711) | 3,726 | (49,724) |
Net finance income (expense) | − | − | − | 21,178 | − | 21,178 |
Income taxes | (15,169) | (1,388) | 526 | (2,782) | 1,919 | (16,894) |
Depreciation, depletion and amortization | 12,410 | 2,483 | 612 | 253 | − | 15,758 |
EBITDA | (32,964) | (2,447) | 2,146 | (2,062) | 5,645 | (29,682) |
Results in equity-accounted investments | 758 | 848 | 12 | (179) | − | 1,439 |
Impairment losses / (reversals) | 64,304 | 208 | − | 789 | − | 65,301 |
Reclassification of cumulative translation adjustment - CTA | − | − | − | − | − | − |
Results on disposal / write-offs of assets and on remeasurement of investment retained with loss of control | 322 | 99 | 42 | (17) | − | 446 |
Adjusted EBITDA | 32,420 | (1,292) | 2,200 | (1,469) | 5,645 | 37,504 |
Table 31 - Reconciliation of Consolidated Adjusted EBITDA Statement by Segment – 4Q20
R$ million | E&P | REFINING | GAS & POWER | CORP. | ELIMIN. | TOTAL |
Net income (loss) f | 33,490 | 5,168 | 1,145 | 19,540 | 1,109 | 60,452 |
Net finance income (expense) | − | − | − | (6,812) | − | (6,812) |
Income taxes | 17,318 | 2,340 | 463 | (6,322) | 570 | 14,369 |
Depreciation, depletion and amortization | 8,350 | 2,951 | 572 | 229 | − | 12,102 |
EBITDA | 59,158 | 10,459 | 2,180 | 6,635 | 1,679 | 80,111 |
Results in equity-accounted investments | 129 | (627) | (248) | 573 | − | (173) |
Impairment | (29,926) | (1,067) | (19) | 42 | − | (30,970) |
Reclassification of cumulative translation adjustment - CTA | − | − | − | − | − | − |
Gains / (losses) on disposal / write-offs of assets and in remeasurement of equity interests | 3 | (2,270) | 402 | (60) | − | (1,925) |
Adjusted EBITDA | 29,364 | 6,495 | 2,315 | 7,190 | 1,679 | 47,043 |
28 |
Glossary
ACL - Ambiente de Contratação Livre (Free contracting market) in the electricity system. ACR - Ambiente de Contratação Regulada (Regulated contracting market) in the electricity system. Adjusted cash and cash equivalents - Sum of cash and cash equivalents, government bonds and time deposits from highly rated financial institutions abroad with maturities of more than 3 months from the date of acquisition, considering the expected realization of those financial investments in the short-term. This measure is not defined under the International Financial Reporting Standards – IFRS and should not be considered in isolation or as a substitute for cash and cash equivalents computed in accordance with IFRS. It may not be comparable to adjusted cash and cash equivalents of other companies, however management believes that it is an appropriate supplemental measure to assess our liquidity and supports leverage management. Adjusted EBITDA – Net income plus net finance income (expense); income taxes; depreciation, depletion and amortization; results in equity-accounted investments; impairment, cumulative translation adjustment and gains/losses on disposal/write-offs of assets. Adjusted EBITDA is not a measure defined by IFRS and it is possible that it may not be comparable to similar measures reported by other companies, however management believes that it is an appropriate supplemental measure to assess our profitability. Adjusted EBITDA shall be considered in conjunction with other metrics for a better understanding on our performance. Adjusted EBITDA margin - Adjusted EBITDA divided by sales revenues. Basic and diluted earnings (losses) per share - Calculated based on the weighted average number of shares. Consolidated Structured Entities – Entities that have been designated so that voting rights or the like are not the determining factor in deciding who controls the entity. Petrobras has no equity interest in certain structured entities that are consolidated in the Company's financial statements, but control is determined by the power it has over its relevant operating activities. As there is no equity interest, the income from certain consolidated structured entities is attributable to non-controlling shareholders in the income statement, and disregarding the profit or loss attributable to Petrobras shareholders. CTA – Cumulative translation adjustment – The cumulative amount of exchange variation arising on translation of foreign operations that is recognized in Shareholders’ Equity and will be transferred to profit or loss on the disposal of the investment. Effect of average cost in the Cost of Sales – In view of the average inventory term of 60 days, the crude oil and oil products international prices movement, as well as foreign exchange effect over imports, production taxes and other factors that impact costs, do not entirely influence the cost of sales in the current period, having their total effects only in the following period. Free cash flow - Net cash provided by operating activities less acquisition of PP&E and intangibles assets, investments in investees and dividends received.. Free cash flow is not defined under the IFRS and should not be considered in isolation or as a substitute for cash and cash equivalents calculated in accordance with IFRS. It may not be comparable to free cash flow of other companies, however management believes that it is an appropriate supplemental measure to assess our liquidity and supports leverage management. Investments – Capital expenditures based on the cost assumptions and financial methodology adopted in our Business and Management Plan, which include acquisition of PP&E, including expenses with leasing, intangibles assets, investment in investees and other items that do not necessarily qualify as cash flows used in investing activities, primarily geological and geophysical expenses, research and development expenses, pre-operating charges, purchase of property, plant and equipment on credit and borrowing costs directly attributable to works in progress.
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Leverage – Ratio between the Net Debt and the sum of Net Debt and Shareholders’ Equity. Leverage is not a measure defined in the IFRS and it is possible that it may not be comparable to similar measures reported by other companies, however management believes that it is an appropriate supplemental measure to assess our liquidity. Lifting Cost - Crude oil and natural gas lifting cost indicator, which considers expenditures occurred in the period. LTM Adjusted EBITDA - Sum of the last 12 months (Last Twelve Months) of Adjusted EBITDA. This metric is not foreseen in the international accounting standards - IFRS and it is possible that it is not comparable with similar indexes reported by other companies, however Management believes that it is supplementary information to assess liquidity and helps manage leverage. Adjusted EBITDA should be considered in conjunction with other metrics to better understand the Company's liquidity. OCF - Net Cash provided by (used in) operating activities (operating cash flow) Net Debt – Gross debt less adjusted cash and cash equivalents. Net debt is not a measure defined in the IFRS and should not be considered in isolation or as a substitute for total long-term debt calculated in accordance with IFRS. Our calculation of net debt may not be comparable to the calculation of net debt by other companies, however our management believes that net debt is an appropriate supplemental measure that helps investors assess our liquidity and supports leverage management. Net Income by Business Segment - The information by the company's business segment is prepared based on available financial information that is directly attributable to the segment or that can be allocated on a reasonable basis, being presented by business activities used by the Executive Board to make resource allocation decisions. and performance evaluation.When calculating segmented results, transactions with third parties, including jointly controlled and associated companies, and transfers between business segments are considered. Transactions between business segments are valued at internal transfer prices calculated based on methodologies that take into account market parameters, and these transactions are eliminated, outside the business segments, for the purpose of reconciling the segmented information with the consolidated financial statements of the company. company.As a result of the divestments in 2019, the strategy of repositioning its portfolio foreseen in the Strategic Plan 2020-2024, approved on November 27, 2019, as well as the materiality of the remaining businesses, the company reassessed the presentation of the Distribution and Biofuels, which are now included in the Corporate and other businesses. PLD (differences settlement price) - Electricity price in the spot market. Weekly weighed prices per output level (light, medium and heavy), number of hours and related market capacity. Refining - includes crude oil refining, logistics, transportation, acquisition and export activities, as well as the purchase and sale of petroleum and ethanol products in Brazil and abroad. Additionally, this segment includes the petrochemical area, which includes investments in companies in the petrochemical sector, shale exploration and processing. Sales Price of Petroleum in Brazil - Average internal transfer prices from the E&P segment to the Refining segment. Total net liabilities - Total liability less adjusted cash and cash equivalents.
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29 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: May 13, 2021
PETRÓLEO BRASILEIRO S.A–PETROBRAS
By: /s/ Rodrigo Araujo Alves
______________________________
Rodrigo Araujo Alves
Chief Financial Officer and Investor Relations Officer