Petroleo Brasileiro S.A.- Petrobras (NYSE:PBR) Q2 2020 Earnings Conference Call - Final Transcript
Jul 31, 2020 • 10:30 am ET
Good morning ladies and gentlemen. Welcome to Petrobras Webcast with Analysts and Investors about the Second Quarter 2020 Results. We would like to inform you that all participants will follow the transmission by Internet as listeners. After introduction, a Q&A session will begin. You can send us questions by email at firstname.lastname@example.org.
Today we have with us Roberto Castello Branco, Petrobras CEO; Andrea Almeida, Chief Financial and Investor Relations Officer; Anelise Lara, Chief Refining and Natural Gas Officer; Andre Chiarini, Chief Logistics Officer; Carlos Alberto Pereira de Oliveira, Chief Exploration and Production Officer; Marcelo Zenkner, Chief Governance and Compliance Officer; Nicolas Simone, Chief Digital Transformation and Innovation Officer; Roberto Ardenghy, Chief Institutional Relations Officer; and Rudimar Lorenzatto, Chief Production Development Officer.
The presentation will be available on our website and today, we will start by listening to Roberto with the main highlights of our results. Roberto, please go ahead.
Roberto Castello Branco
Thank you, Carla. Good day, everybody. It's a pleasure to talk to you. Well, the current crisis contains ingredients of important events of the last century, the Spanish Flu in 1918 to 1920 and the Great Depression of 1929 to 1933. Of course, both medical and economic science are much better equipped to deal with this type of event, however, even with that, we had powerful shock, powerful public health and economic shock suffered by the world. With steep recessions typically affect more strongly investments in the manufacturing industry. This time, it's different. We face a non-traditional recession and it has hit more severely consumption and service. And service includes transportation service, which is the main channel of the shock on the oil industry. Last quarter was on the most challenging, if not the most, for the global economy in the oil industry, particularly April 2020 is a month to be always remember in the history of our industry, given the unprecedented strength of demand contraction, price collapse, and a spike in maritime freight price.
Cash is all [Indecipherable] but now became God over the last few months. It was God to us. We are very happy to say that there was no cash burn. On the contrary, we managed to reduce net debt, operational cash flow reached $5.5 billion and free cash flow $3.4 billion. Given our liquidity position, we are able to start the prepayment of the revolving credit lines withdrawn in last March. It's an important move. So it's the restart of the leveraging process. It's a movement to cut costs, interest cost to improve risk perception. And by the end of the day, the lines will remain available. So, we have liquidity out at our disposal. As an in a war, the unprecedented scale and speed of the global pandemic compelled us to move swiftly. We are working hard, fast and focused to be a winner. Our goal is to engineer a J shaped recovery. We are asking not only to survive in this short term, but to promote the structural transformation in order to try and generate