Petrobras Posts Record Loss on Oil Price Slump, Write Downs
The bigger-than-expected shortfall was 48% larger than the 26.6 billion-real loss a year earlier, the previous record.
New York: Brazil’s state-controlled oil company Petrobras posted its biggest-ever quarterly loss on Monday after booking a large writedown for oil fields and other assets as oil prices slumped and refinery projects faltered.
Petróleo Brasileiro SA, as the company at the epicenter of Brazil’s massive corruption scandal is commonly known, had a consolidated net loss of 36.9 billion reais (US$10.2 billion) in the fourth quarter, according to a securities filing.
The bigger-than-expected shortfall was 48% larger than the 26.6 billion-real loss a year earlier, the previous record.
The result caught analysts and investors by surprise. The largest fourth-quarter loss expected in a Reuters survey of analysts was 9.7 billion reais. Petrobras common shares fell 5.8% in after-hours electronic trading in New York, after the results were released.
The red ink at Petrobras was driven by a 46% decline in the price of benchmark Brent crude oil LCOc1, a drop that has driven up losses and caused writedowns throughout the global oil industry.
Of the 46.4 billion reais written off in the quarter, 83% was for oil fields. A year earlier, writedowns were also the cause of Petrobras losses, although they were largely related to the giant price-fixing, bribery and political kickback scandal that has roiled the company and help fuel calls for the impeachment of Brazilian President Dilma Rousseff.
Rousseff, who was chairwoman of the board of Petrobras from 2003 to 2010 when much of the corruption took place, has denied any wrongdoing.
Net sales, or sales minus sales taxes, totaled 85.1 billion reais in the quarter and adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, were 17.1 billion reais.
The fourth quarter result pushed the company’s full-year 2015 result to a 34.8 billion-real loss.
The company, though, did manage to increase its cash position at the end of the period to 97.8 billion reais from 44.2 billion reais by cutting investments. That provided it a bigger cushion to pay its 492.8 billion reais, or US$126.2 billion dollars, of debt at the end of the quarter.
The company, chief executive officer Almir Bendine told reporters on Monday, can generate enough cash to make all its debt payments through the end of 2017 without needing to borrow new money.
Total debt in reais, though, was 40% greater at the end of 2015 than a year earlier.
The biggest non-oil-field write-off was 5.28 billion reais for the company’s unfinished Comperj refinery near Rio de Janeiro, whose ballooning costs and repeated delays were one of the key focuses of the Petrobras corruption scandal.
Start-up of the refinery has been pushed back to at least 2023 because Petrobras has been unable to find a partner to help finance the plant’s completion, company officials said on Monday.
