Economic and financial results In 2011, Petrobras System’s net income was R$ 33.3 billion - equivalent to R$ 2.55 per share - 5% less than in 2010 (R$ 35.2 billion). While growth in domestic sales was 6% above 2010 - with emphasis on oil product sales - operating expenses rose due to higher oil acquisition costs and oil product imports, which contributed to reduce the result. In turn, the net financial income of R$ 122 million was lower than that calculated in 2010, reflecting the 12.6% exchange rate depreciation on the debt, which generated a foreign exchange expenditure of R$ 3.99 billion and increased revenue with higher financial investments in Brazil. In the same period, operating cash flow
CONSOLIDATED NET REVENUE
CONSOLIDATED INCOME
R$ MILLION
(R$/SHARE)
2007
2007
21,512
2008 2009
32,988
2011 Net Revenue
35,189 33,300
2008
3.76 3.43
2010 2011
3.57 2.55
Revenue/Share
BUSINESS SCENARIO
Possible risks arising from the range of oil and oil product prices, in addition to the amounts related to fees and financial liabilities, expose Petrobras to a number of factors that can have a negative effect on the value of its assets and financial liabilities or of its profits and cash flows. However, the company adopts a policy of not passing on the short term external price fluctuations to its products on the Brazilian market. 2011 SUSTAINABILITY REPORT
2.45
2009
30,051
2010
54
(EBITDA, earnings before interest, taxes, depreciation and amortization) rose 5%, to a record of R$ 62.2 billion. This indicator shows the strength of the Petrobras’ internal cash flow generation capability. The company’s stock kept pace with the continued ups and downs and with the uncertainty in the global economic scenario and closed the year in a slump. In Brazil, the common shares (PETR3) slipped 24.71%, while the preferred ones (PETR4) 21.25%. At the New York Stock Exchange (NYSE), which trades the common (PBR) and preferred (PBR/A) receipts, devaluation was 34.31% and 31.23% respectively. With the slump in its stock quotes, Petrobras’ market value was US$ 158 billion in late 2011.
Throughout 2011, oil prices were strongly influenced by the so-called “Arab Spring,” a series of demonstrations and civil protests in North African and Middle Eastern countries that had international impact and resulted not only in policy changes, but also in overturns. Moreover, the slowdown in the U.S. economy and the debt crisis in several European nations also influenced oil and oil product prices. As a result, fluctuations caused by these macroeconomic conditions have raised the