By Brazil Stock Guide – Petrobras (PETR4.SA, PETR3.SA, PBR) reported net income of R$32.7 billion in the first quarter of 2026, more than doubling from the previous quarter, as foreign-exchange gains, higher oil and gas production and resilient cash generation supported earnings.
The state-controlled oil producer said adjusted EBITDA excluding one-off items reached R$61.7 billion, while recurring net income attributable to shareholders totaled R$23.8 billion. Operating cash flow was R$44 billion, and free cash flow reached R$20.1 billion, according to the company’s first-quarter performance report.
“Entregamos resultados financeiros consistentes no primeiro trimestre de 2026, mantendo a forte geração de caixa com Fluxo de Caixa Operacional de US$ 8,4 bilhões, sustentado pela excelente performance dos nossos ativos e por recordes de produção de óleo e gás. Nossos investimentos estão se convertendo em crescimento da produção, demonstrando a solidez e a eficácia da nossa estratégia de criação de valor,” Chief Financial and Investor Relations Officer Fernando Melgarejo said in the report.
Translated, Melgarejo said: “We delivered consistent financial results in the first quarter of 2026, maintaining strong cash generation with operating cash flow of $8.4 billion, supported by the excellent performance of our assets and record oil and gas production. Our investments are turning into production growth, demonstrating the strength and effectiveness of our value-creation strategy.”
Sales revenue came in at R$123.7 billion, up 0.4% from a year earlier and down 2.9% from the fourth quarter. Gross profit reached R$59.6 billion. Net income excluding one-off items fell 7.2% from the previous quarter but rose 0.9% from a year earlier.
Petrobras said the quarterly performance reflected a 3.7% increase in oil and gas production from the fourth quarter and the appreciation of the Brazilian real against the US dollar. Including one-off effects, net income rose 109.9% from the previous quarter.
The company said some of the recent increase in oil prices and record production had not yet been fully reflected in first-quarter revenue. Petrobras cited the lag between cargo shipment and sales recognition, which occurs when ownership is transferred at destination ports.
The company also said pricing for a significant share of exports, especially to Asia, is often based on quotations from the month before cargo arrival. As a result, the impact of higher oil prices after the start of the conflict in the Middle East is expected to appear in second-quarter exports.
Investments totaled $5.1 billion in the quarter, down 19.1% from the fourth quarter but up 25.6% from the same period in 2025. Exploration and Production accounted for 87.4% of capital expenditure, with $4.5 billion invested.
Year over year, Exploration and Production investments rose 27.4%, driven by pre-salt projects in the Santos Basin, especially Búzios and Sépia, and by projects in the Campos Basin, including the Marlim revitalization program.
Petrobras also highlighted the early start-up of the FPSO P-79 platform at Búzios 8 on May 1, 2026. The unit has capacity to produce 180,000 barrels of oil per day and will be able to export gas to shore through the Rota 3 pipeline, with the potential to increase Brazil’s gas supply by as much as 3 million cubic meters per day.
Exploration and Production remained the company’s main earnings driver. The segment posted R$84 billion in sales revenue, R$25.4 billion in net income attributable to Petrobras and R$54.2 billion in adjusted EBITDA.
Operating profit in the segment rose 51.5% from the fourth quarter to R$38.4 billion. Petrobras attributed the increase mainly to higher Brent prices and the absence of significant impairment and field decommissioning expenses that affected the previous quarter.
The Refining, Transportation and Marketing segment reported net income of R$12.1 billion and operating profit of R$18.4 billion, up 186.2% from the previous quarter. Gross profit reached R$23.8 billion, helped by inventory turnover effects amid higher Brent prices.
Petrobras said a higher refinery utilization factor and stable output of middle distillates and gasoline supported increased sales of domestically produced fuels, reducing the resale of imported derivatives in a period of elevated international prices.
The Gas and Low-Carbon Energies segment posted R$630 million in net income attributable to Petrobras. Adjusted EBITDA was R$1.75 billion, down 23.9% from the fourth quarter but up 234.2% from a year earlier.
At the end of March, Petrobras had gross debt of $71.2 billion, up 2% from the end of 2025. Net debt stood at $62.1 billion, up 2.5%. The net debt-to-adjusted EBITDA ratio was 1.43 times, broadly stable from the previous quarter.
Cash and cash equivalents totaled R$34.3 billion at the end of the quarter, while adjusted cash and marketable securities stood at R$47.6 billion. Petrobras said it paid R$72.4 billion in taxes to federal, state and municipal governments in the quarter and approved R$9 billion in shareholder distributions related to first-quarter results.
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