Petrobras Q4 profit beats outlook, debt passes limit
Brazil's state-led oil company, Petroleo Brasileiro SA, said on Monday that fourth-quarter net profit rose 53 percent from a year earlier as unexpected financial gains made up for rising operational costs.
Consolidated net income attributable to shareholders was 7.75 billion reais ($3.89 billion) in the three months ending Dec. 31, the Rio de Janeiro-based company said in a filing with Brazil's CVM securities regulator.
While profit beat the 6.21-billion-real outlook in a Reuters survey of 12 analysts, Petrobras said debt also rose to 2.77 times earnings before interest, taxes, depreciation and amortization (EBITDA).
That's above the company's own limit of 2.5 times EBITDA, as Reuters reported Dec. 18 after Moody's Investors service put Petrobras debt on watch for a possible downgrade.
The result comes as Chief Executive Maria das Graças Foster promises to find savings of more than $15 billion to prevent a $237 billion five-year investment plan from ballooning. That plan, the world's largest corporate investment program, aims to develop giant offshore reserves and make Petrobras one of the world's largest oil companies by 2020.
"It's good to see the company reporting a higher profit and beating expectations, but the numbers also raise a lot of questions and doubts," said Pedro Galdi, oil company analyst with SLW Corretora, a Sao Paulo securities brokerage. "It's hard to see how this result shows a company improving its operations and fiscal discipline."
In a note accompanying results, Foster said management knows the company's operational problems, is working to fix them, and believes Petrobras has good medium and long-term
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