Aug 16, 2019   SOURCE: BusinessWire

Petro Rio S.A. Announces 2Q19 Earnings

Petro Rio S.A. (“Company” or “PetroRio”) (B3:PRIO3) announces its 2Q19 earnings.

Quarter Highlights

  • Highest ever Net Revenue of R$ 547.9 MM, a 129% increase vs 2Q18.
  • R$ 262.3 MM adjusted EBITDA (ex-IFRS 16), 184% vs 2Q18 and 643% higher than 1Q19.
  • Company lifting cost reduced to US$ 24/bbl, 30% lower than 2Q18 (US$ 34/bbl).
  • R$ 287 MM in free cash flow, the highest ever recorded by the Company.
  • Significant decrease in net debt and fast deleveraging for the next quarters.

Click here for the Earnings Release.

Management Letter

"The second quarter of the year was the first period fully incorporating the 51.74% operating interest in Frade in the Company's results. The field is now the largest asset operated by PetroRio, and buoys PetroRio to the position of 5 th largest oil and gas operator in Brazil and the largest independent company in the industry. As Frade's new operators, we've had success in several short-term initiatives to manage the Field's natural decline.

Regarding cost reductions, talks with suppliers have progressed to capture the synergies between Polvo and Frade through the second quarter. We estimate there will be further positive impacts from these reductions in the third quarter, which will be fully realized in 4Q19.

This quarter also saw some significant operational and financial achievements, such as record sales volumes, production, revenues, EBITDA and lifting cost, which cemented the success of the asset's acquisition and integration. These achievements were accomplished through the diligent effort of our operational and procurement teams. Our free cash flow in the quarter also illustrates this excellent performance, as evidenced by our rapid deleveraging compared to the previous quarter.

Looking forward, we are focused on extracting maximum potential of our two operated fields and on searching for new acquisitions, where we hope to create even more value for our shareholders."

Conference Call: August 15, 2019 (Thursday).

Conference Call in English

Conference Call in Portuguese

2:00 p.m. (NY Time)
3:00 p.m. (Brasília Time)
Phone: +1 646 828 8246
Toll Free (USA): +1 800 492 3904
Password: PetroRio
Webcast: click here

3:00 p.m. (Brasília Time)
2:00 p.m. (NY Time)
Phone: +55 (11) 3193 1070
+55 (11) 2820 4070
Password: PetroRio
Webcast: click here

The Conference Call will be held in Portuguese with simultaneous translation into English.

For additional information, please contact PetroRio's Investor Relations Department.

 

Proforma Income Statement
(R$ thousands)

2Q19

2Q18

Δ

2Q19 ex-
IFRS16

Δ

Revenues

547,875

239,405

128.8%

547,875

128.8%

Cost of goods sold

(153,597)

(104,336)

47.2%

(202,040)

93.6%

Royalties

(49,844)

(17,097)

191.5%

(49,844)

191.5%

Gross Profit

344,433

117,972

192.0%

295,990

150.9%

G&A, G&G and Project expenses

(32,412)

(25,739)

25.9%

(33,693)

30.9%

Other revenues/expenses

(32,570)

(6,890)

372.7%

(32,570)

372.7%

EBITDA

279,451

85,343

227.4%

229,727

169.2%

EBITDA Margin

51.0%

35.6%

15,4 p.p.

41.9%

6,3 p.p

Adjusted EBITDA

312,021

92,233

238.3%

262,297

184.4%

Adjusted EBITDA Margin

57.0%

38.5%

18,5 p.p

47.9%

9,4 p.p

Depreciation and amortization

(72,716)

(26,633)

173.0%

(27,424)

3.0%

Financial results

(8,077)

12,175

n/a

(12,846)

n/a

Income tax and social contribution

(35,679)

(325)

10867.3%

(35,679)

10867.3%

Profit (loss) for the period

162,980

70,560

131.0%

153,779

117.9%