Petroreconcavo (RECV3) Q4 2024 earnings summary

Executive summary

• Achieved record net revenue of R$3.3 billion in 2024, up 16% year-over-year, driven by oil and gas sales indexed to Brent prices and favorable exchange rates.

• EBITDA reached R$1.6 billion, up 29% year-over-year, with EBITDA margin improving to 50.3%.

• Adjusted net income was R$681 million in 2024, down 4% year-over-year due to higher costs, depreciation, and mark-to-market effects.

• Free cash flow totaled R$1 billion, supporting a dividend payout of R$2.75 per share (14.5% yield).

• Strategic focus on operational resilience, capital structure reform, and flexibility in capital allocation between dividends and M&A.

Financial highlights

• Net debt at year-end was R$1.3 billion, with a leverage ratio of 0.80x net debt/EBITDA.

• CapEx for 2024 ranged from R$822 million to R$1.09 billion, focused on drilling, reserve development, and digital transformation.

• Lifting cost averaged US$13.60–13.77/boe in 2024, up 4% year-over-year.

• Dividend yield for 2024 was 14.5%, with total payout exceeding twice the period's profit.

• Gross profit reached R$1.19 billion, up from R$897.7 million year-over-year.

Outlook and guidance

• Expect robust production growth and a downward trend in lifting costs for 2025.

• Continued focus on operational efficiency, reserve development, and flexibility in capital allocation.

• Ongoing evaluation of M&A opportunities and potential for further dividend payments.

• NGPU Miranga project approved, with US$60 million investment and operations expected by end of 2027.

• Hedging strategies in place to mitigate commodity and FX volatility.