Petroreconcavo (RECV3) Q1 2026 earnings summary

Executive summary

• Q1 2026 was marked by global macroeconomic shifts, including rising geopolitical tensions and oil price volatility, driving Brent to $127/bbl at quarter-end and a quarterly average of $81/bbl, resulting in cost and CapEx reductions and improved financial performance.

• Net revenue reached R$684 million, down 3% sequentially and 20% year-over-year, with EBITDA at R$310 million (up 5% sequentially, down 27% YoY), and net income at R$124 million, more than doubling sequentially but 46% lower YoY.

• Production averaged 24.4k boe/day, down 3% sequentially and 11% YoY, mainly due to operational shutdowns and maintenance, especially in Bahia.

• Free cash flow was R$80 million, enabling a R$100 million interest on equity distribution (R$0.334/share), scheduled for May 28, 2026.

• Advanced ESG initiatives included emissions reduction, social programs, and maintained Great Place to Work certification.

Financial highlights

• Net revenue: R$684 million, down 3% sequentially and 20% YoY.

• EBITDA: R$310 million, up 5% sequentially, down 27% YoY; margin improved to 45.3%.

• Net income: R$124 million, more than doubled sequentially, down 46% YoY.

• Free cash flow: R$80 million, a 492% increase from 4Q25.

• Net debt: R$1.38 billion, leverage at 1.04x net debt/EBITDA.

• CapEx: R$197 million, down 26% sequentially and 21% YoY.

Outlook and guidance

• Strategy remains unchanged for 2026 despite oil price volatility; portfolio under review but no CapEx acceleration planned.

• Focus on production stability, operational efficiency, and long-term value creation through water injection and mature field management.

• Expectation to maintain flat production and disciplined CapEx for the year.

• Next natural gas price adjustment scheduled for May 2026, reflecting Brent prices from Jan–Mar 2026.

• Continued focus on risk management, operational safety, liquidity, and balance sheet health.