Pierre Perrin-Monlouis Dernière mise à jour: 20 octobre 2021
With regard to stories published today in the O Globo and Valor Econômico newspapers about the Company’s financial health, the Company informs that the 2008-2012 Business Plan calls for investments in the order of $112.4 billion (annual average of $22.5 billion), with an annual need to raise $4.0 billion in funds.
With an extensive project portfolio and excellent growth perspectives, Petrobras has increased its investments sharply. Through September, $20.2 billion were invested in the Petrobras system (results in compliance with the Brazilian legislation converted based on the average Dollar exchange rate in the period), a 32% surge (in Dollars) over a year ago.
In the course of its operating and financial activities, Petrobras always accesses the domestic and international capital and bank markets. The Company always analyzes all financing alternatives, always in search of the options that are most appropriate for the profile of its debt, both in costs and in terms.
Due to the current conditions in the international financial market and to the solidity of the National Financial System, Brazilian companies, including Petrobras, have been using the domestic market more often to supply their normal funding needs. Additionally, the evolution in the exchange rate allows for better conditions to raise funds in the internal market, and, thus, reduces the company’s exposure to debt in Dollars.
The record profits reached in third quarter of 2008 and in the first nine months of 2008 attained on account of the excellent operating results (increased oil and natural gas production, larger derivatives sales, and better prices).
Through September, cash generation in its operating activities totaled R$34.7 billion, plus R$4.4 billion in net financing. A total of R$35.2 billion were used in investment activities and to pay R$6.2 billion in dividends, resulting in a negative net generation of R$2.3 billion and a cash flow of R$10.8 billion in late September. These amounts appear in the Company’s accounting statements filed with the Securities and Exchange Commission (CVM) and widely announced to the market.
However, a major portion of the net profit is a reflex of the more expensive dollar. In the third quarter of 2008, there was a financial profit of R$3.5 billion (exchange variations on exposed net equity), against a loss of R$1.2 billion in second quarter of 2008. This did not represent, however, more cash generation for the Company.
In October, the Company had higher expenses with taxes and fees, having paid upwards of R$11.4 billion in the month. Part of these payments were for Income Tax and Social Contribution on Profit on account of the higher Net Profit calculated in the third quarter of 2008 and special participations calculated based on the peak oil price. The average Gross Sales in the first nine months of the year was R$17.3 billion.
It must be emphasized that the funds that has been raised are part of the normal course of the Company’s activities, which currently has low financial leverage levels, allowing for an increase in funding without affecting the optimal capital structure and the financability of its projects.