In this report, we provide our read of Petrobras’ 2Q17 results and update ourforecast model and sensitivity tables, as well as relative value charts. We arenot changing our views on Petrobras’ credit profile and prospects or our Holdrecommendation on the company’s fixed-rated USD bonds due 2019 andbeyond. 2Q results were somewhat soft in our view, driven mainly by weakerdownstream top line and E&P production relative to LTM figures. But recentcost-cutting efforts, capex discipline and asset sale proceeds have helped thecompany keep its deleveraging pace, ending the quarter with net leverage of3.15x in USD terms (-0.3x qoq). Our base-case forecasts point to sustainingfree cash flow in the USD+6bn handle in upcoming years and net leveragedropping further to 2.8x in 2019, assuming a flat Brent price of USD50/bbl. Wealso forecast a 2019 Brent-equivalent cash flow breakeven per boe ofproduction in the high USD30s / low USD40s area, which provides animportant cushion to downside risks to near-term oil prices and the executionof the company’s divestment program, as well as risks to E&P productiontrajectory due to lower capex. Despite the company’s positive standalonefundamental momentum and positive bond relative value to EM peers in the 5-and 10-year areas, in our view, we justify our Hold recommendation withcurrent tight bond spreads on a historical basis, our conservative stance onnear-term oil prices, and Brazil’s fragile macro, political and fiscal situation.    Soft quarter relative to LTM figures on the back of lower E&P production,weaker downstream prices, and lower oil products sale volume; recurring FCFassuming USD17bn annual sustaining capex was -54% vs. LTM, at USD+1.0bnPetroleo Brasileiro (Petrobras, PETBRA) reported somewhat soft 2Q17 resultsrelative to its recent quarterly figures, with reported adjusted (companyadjusted)EBITDA of USD5.94bn that was 16% below the average for the lastfour quarters in USD terms (no meaningful seasonality), and 6% lower thanBloomberg consensus estimates. EBITDA adjusted by additional non-recurringand non-cash items1 (DB-adjusted EBITDA) was 12% lower than the averagefor the last four quarters (USD terms), at USD7.16bn. The key drivers of theweaker DB-adjusted EBITDA (compared to the last four quarters) include: 1)E&P production that was 1.6% lower than the last-twelve-month (LTM)average, at 2.66 Mboepd; 2) lifting costs 4% above the LTM average (in USDterms), at USD11.2/boe; 3) domestic oil products sales volume 3% lower thanthe LTM average (and 8% lower yoy), at 1.93 Mboepd; and 4) domestic oilproduct realization price 2% below the LTM average (in USD terms), atUSD68.2/boe, compared to a flat Brent price (vs. LTM average). The domesticE&P business’ adjusted EBITDA was 3% below the LTM average, at USD4.9bn(USD19.3/boe, or 68% of total DB-adjusted EBITDA), while the domesticdownstream business’ adjusted EBITDA was 20% below the LTM average, atUSD2.4bn (33% of DB-adjusted EBITDA).    The operational cash flow before working capital variation and after interestwas 28% below the LTM average (in USD terms), at USD4.3bn, as a result oflower EBITDA and higher net interest and cash tax charges; while the recurringfree cash flow (FCF), assuming USD17bn of annualized sustaining capex, was54% lower than the LTM average (in USD terms), at USD+1.0bn. The realized

声明：如本站内容不慎侵犯了您的权益，请联系邮箱：wangshiyuan@epins.cn 我们将迅速删除。