Petrobras joins global energy majors in posting surge in profits

Brazilian state-owned oil company made a net profit of 6.64 billion reais (Dh6.53bn), well above the 266 million reais it posted a year earlier

Brazil's Petrobras P-66 oil rig in the offshore Santos basin in Rio de Janeiro. The company' earnings rose in the latest quarter. Reuters

Brazil's state-controlled oil company Petroleo Brasileiro (Petrobras) reported a surge in third-quarter net profit, helped by a pick-up in oil prices and the weakening of the real currency, the company said on Tuesday.

Petrobras made a net profit of 6.64 billion reais (Dh6.53bn), well above the 266 million reais it posted a year earlier. Adjusted earnings before interest, taxes, depreciation and amortization (ebitda) rose to 29.85bn reais from 19.22bn in the same period last year.

The company said its growing share of the domestic diesel market also contributed to the strong earnings, as a diesel subsidy programme put in place in June to quell a truckers' strike over rising fuel costs hit the company's competitors.

Petrobras said it received 1.6bn reais from the government as part of the second phase of the subsidy programme, which is set to end in December.

But the state oil group said its performance was hit by the payment of a $853.2m fine to settle charges by US authorities that former executives and directors of the company broke US anti-corruption laws.

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Still, the deal represented another major step for the oil company in removing legal uncertainty left over from the so-called Car Wash investigation which revealed a graft scheme that cost the state-run company billions of dollars.

Net debt at the world's most indebted listed oil company rose slightly to 291.83bn reais from 284.02bn reais in the second quarter. Petrobras managed to lower its net debt to ebitda ratio to 2.96 from 3.23 in the second quarter, as it seeks to reach 2.5 by year-end.

The company's efforts to sell off $21bn in assets in the 2017-2018 period have been hampered by legal hurdles and union resistance, but it could offload another $20bn through 2019, a source said last month.

Petrobras said cash flow reached 21.92bn reais in the quarter while sales revenue grew to 98.26bn reais, up from 71.82bn in the same period last year.