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RIO DE JANEIRO - Brazilian oil giant Petrobras (NYSE:PBR) reported mixed first quarter 2025 results, with improved upstream performance offset by weaker refining margins. The company’s shares edged up 0.5% following the announcement.
Petrobras posted adjusted recurring EBITDA of $10.7 billion for the first quarter, up 8% sequentially but about 3% below Bloomberg consensus estimates.
The upstream division saw a 50% quarter-over-quarter increase in adjusted EBITDA to $10 billion, helped by a 5% YoY rise in production volumes. However, this was partially offset by higher lifting costs, which increased 7% sequentially to $6.79 per barrel of oil equivalent due to increased maintenance across pre-salt blocks.
The refining segment underperformed, with adjusted EBITDA falling 29% quarter-over-quarter to $1.07 billion. This decline was attributed to lower plant utilization of 90% due to the revamp of the RNEST refinery, which has now been completed, and a contraction in refining margins, particularly for gasoline.
Petrobras declared a dividend of 0.909 Brazilian reais per share ($0.32 per ADR), totaling $2.04 billion. This was approximately 7% below the company-collated consensus dividend estimate of $2.19 billion.
"Our first quarter results demonstrate the resilience of our upstream operations, even as we faced challenges in the downstream segment," said Petrobras CEO [Name]. "We remain focused on executing our strategic plans and delivering value to our shareholders."
Free cash flow improved to $4.5 billion, up 20% quarter-over-quarter, supported by a 29% sequential decrease in capital expenditure to $4.1 billion and a $0.8 billion working capital release.
The company reaffirmed that construction of new FPSOs remains on track, with two new units set to be connected over the remainder of 2025, which should enable gradual production increases in the coming quarters.
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