Petrobras back to making profit after years of losses
Petrobras reported profits after four years of losses. The information was disclosed Wednesday (Feb. 27) by the government-controlled oil giant in its yearly report. The company’s net profit in 2018 stood at $6.91 billion, the highest since 2011.
“The first positive yearly result in five years, and also the highest since 2011,” a note released by Petrobras reads.
In a letter to the market, Petrobras CEO Roberto Castello Branco talked about the good outcome of the company. “Petrobras’s 2018 performance was doubtless the best in many years, which includes the achievement of a few historic records, involving free cash flow and adjusted EBITDA [earnings before interest, taxes, depreciation, and amortization],” he said.
The result is believed to reflect such factors as a higher margin of sales of by-products in Brazil and oil exports, coupled with an increase in the Brent rate and the dollar. “There was also a recovery in the market share for diesel and a reduction in general administrative expenditures stemming from lower indebtedness and the regularization of credit with Eletrobras [Brazil’s state-run firm in the electricity sector].”
Earnings by shareholders for 2018 are estimated to total $1.9 billion, considering forecasts made throughout the year. Last year, Petrobras made $40.5 billion in municipal, state, and federal taxes, in addition to governmental revenues. Employees are also to be paid extra proportionate to the profits.
Production
The company’s oil and natural gas output reached 2.63 million barrels of oil equivalent per day, 2.53 million of which in Brazil and 101 thousand in other countries, down five percent from 2017.
“This performance reflects divestment efforts and the natural decline of mature fields. Another highlight is the eight new production system that were brought into operation, five of which pre-salt systems—P-74, P-75, and P-76 in the Búzios field, and P-69 and P-67 in the Lula field—and another in Tartaruga Verde, in the Camps basin,” the company reported.
“The advent of new platforms gives us confidence about our five-percent output growth target by 2023,” said Castello Branco. Exploration was also reported to bounce back, as 11 new blocks were contracted in 2018.
