Petróleo Brasileiro S.A. shares are trading lower after the company reported first-quarter FY24 financial results.

Sales of $23.77 billion (-11.2% Y/Y) missing the consensus of $24.35 billion.

Net revenue fell 12% Q/Q, mainly owing to lower revenue from diesel sales in the domestic market and exports.

Oil products revenue fell 13.4% Y/Y to $14.0 billion. Total domestic market revenues declined 12.9% Y/Y to $17.1 billion, while foreign market revenues fell 6.5% Y/Y to $6.66 billion.

Revenue from oil products in the domestic market fell due to lower prices, the seasonality of consumption, the increase in the biodiesel content in the diesel blend, and the loss of competitiveness of gasoline to hydrated ethanol.

In the quarter, Petrobras reported an oil and natural gas production increase of 3.7% Y/Y, aided by the ramp-up of the FPSOs Almirante Barroso, P-71, Anna Nery, Anita Garibaldi, and Sepetiba, start-up of 19 new wells from complementary projects in the Campos (11) and Santos (8) basins.

Adjusted EBITDA declined 13.1% Y/Y to $12.13 billion. Adjusted EBITDA was down 10% Q/Q, owing to lower sales volumes of oil and oil products and the reduction in the price of oil and diesel margins. 

Earnings per ADS of $0.74 missed the consensus of $0.84.

Capex totaled $3.0 billion, down 14.5% Q/Q, in the quarter. As of March 31, 2024, net debt reached $43.6 billion, and cash and cash equivalents totaled $11.5 billion.

In March, two Brazilian cabinet members said that a proposed extra dividend suddenly axed by state-run Petrobras will be kept in reserve for future disbursement.

Price Action: PBR shares are down 2.52% at $16.61 at the last check Tuesday.