Petrobras disappoints on 3rd-qtr profit, non-recurring charges
Rodrigo Viga Gaier
RIO DE JANEIRO
Petroleumworld 11 14 2017
Petróleo Brasileiro SA's third-quarter profit missed analysts' forecasts for a big rise as the Brazilian state-controlled oil company blamed weak margins in refining and non-recurring charges for the lackluster result.
Petrobras posted a net profit of 266 million reais ($81.1 million) in the quarter compared with a profit of 316 million reais in the prior three months, far below the average consensus estimate of 3.21 billion reais compiled by Thomson Reuters.
Earnings before interest, tax, depreciation and amortization - a gauge of operational profit known as EBITDA - came in at $19.223 billion, just above the 19.094 billion in the prior quarter.
“The result was lower than what the market expected, but this was due to extraordinary items,” Chief Executive Pedro Parente said at a news conference.
Petrobras executives said results were hit by a total of 2 billion reais in non-recurring charges in the quarter, including a 900 million real outlay linked to a tax renegotiation plan.
Weaker refining margins and a loss in market share for fuel sales also contributed, executives said.
Petrobras unveiled a plan in June to review fuel prices more frequently in a bid to regain market share it lost by keeping wholesale prices to retailers above global benchmarks.
The quarterly results painted a picture of a company that appears to be slowly turning around its balance sheet despite many headwinds.
Petrobras cut debt by 11 percent from 2016 to 279.237 billion reais ($85.15 billion) in the quarter, but remains the world's most indebted oil company, scarred by years of poor management, a deep slump in oil prices and a massive corruption scandal.
The company has promised to sell off $21 billion in assets this year and next but has been hamstrung by court decisions freezing asset sales.
Petrobras lowered its capital expenditure goal for the year to $16 billion from $17 billion and boasted positive free cash flow for the 10th consecutive quarter in the July to September period.
The oil giant snapped up three blocks in an auction last month for offshore areas in Brazil's coveted offshore pre-salt layer.
Executives said current extraction costs for pre-salt stood at $7 per barrel of oil equivalent and Petrobras CEO Pedro Parente touted a 196 meter oil column discovered in the Marlim field which he described as the best in the Campos basin.
Net revenue reached 71.822 billion reais, above consensus estimates for 67.123 billion reais.
$1 = 3.28 reais W
Story by Rodrigo Viga Gaier ; Writing and Additional Reporting by Alexandra Alper, Additional Reporting by Marcelo Teixeira, Marta Nogueira and Roberto Samora; Editing by Tom Brown from Reuters.
reuters.com 11 13 2017
We invite all our readers to share with us
their views and comments about this article.
Write to email@example.com
By using this link, you agree to allow PW
to publish your comments on our letters page.
Any question or suggestions,
please write to: firstname.lastname@example.org
Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels