Brazil’s Petrobras obtained in 2021 the highest net profit in its history

RIO DE JANEIRO, BRAZIL – Petrobras, Brazil’s largest oil company, obtained in 2021 a record net profit of US$19.9 billion, the highest in its history, thanks to the increase in crude oil prices and the rise in fuel sales, the company reported on Wednesday, February 23.

The company’s profits last year exceeded by 1,641.9% those of 2020 (US$1.1 billion) and more than doubled those of 2019 (then R$40.1 billion or US$8 billion at the current exchange rate), which were so far the highest in the company’s history.

According to the balance sheet in dollars disclosed to external markets by the company, controlled by the State but with shares traded on the São Paulo, New York, and Miami stock exchanges, the sharp jump in profits was because the average price of a barrel of Brent-type oil (currently close to US$100) jumped 69.7%, from US$41.67 in 2020 to US$70.73 in 2021.

In addition to the sharp rise in the international oil price, the jump in profit also contributed to the 8.5% increase in fuel sales in Brazil, from 1.66 million barrels per day in 2020 to 1.8 million barrels per day in 2021.

Similarly, the price of oil derivatives sold in Brazil rose 54.1%, to US$77.3 per barrel, due to the policy of setting domestic prices in line with the international variation of crude oil.

These three factors caused the Brazilian giant’s sales revenues to jump by 56.4%, from US$53.7 billion in 2020 to US$84 billion in 2021.

Similarly, gross operating profit (Ebitda) rose by 53.4%, from US$28.4 billion in 2020 to US$43.6 billion in 2021.

The company highlighted in its balance sheet that it managed to reduce its debt by 22.2% last year, from US$75.5 billion in December 2020 to US$58.7 million in December 2021.

The value of the debt is practically half of what the company had in 2014, a record US$130 billion, which led the company to announce an additional dividend distribution to its shareholders.

The company had warned that if it managed to reduce its debt to less than US$60 billion, which it achieved 15 months in advance, it would reward its shareholders with an additional dividend.

So far, the company has distributed to its shareholders some US$13 billion in dividends for the 2021 results, a value ten times higher than that of 2020 and a third of which was delivered to the government, which is the majority shareholder.

The state-owned company had already anticipated that between 2022 and 2026, it intends to distribute between US$60 billion and US$70 billion in dividends among its shareholders.

Petrobras’ CEO Joaquim Silva e Luna said that the solid operational and financial results for 2021 show that the oil company “is a healthy company committed to society, capable of growing, investing, generating jobs, paying taxes, and returning money to its shareholders.”

“None of that would be possible for a company in debt and without the capacity to generate value,” he added.

The company also highlighted that it met the operational goals for 2021, raising its oil production to 2.77 million barrels per day and adding 1.97 billion barrels to its proven reserves.

Such a rise was made possible by an 8.9% increase in investments to US$8.8 billion last year, primarily directed to exploration and production in the company’s giant offshore reserves.

It also said that its ambitious divestment plan, mainly aimed at obtaining resources to reduce debt, allowed it to obtain US$4.8 billion last year, a large part of which came from the sale of a refinery that has 13% of Brazil’s total refining capacity.

With information from EFE