By Jay Forte, Contributing Reporter
RIO DE JANEIRO, BRAZIL – Petrobras closed the third quarter of the year with a net profit of R$6.6 billion, more than 25 times higher than the R$266 million obtained in the same period last year. It is a good sign that the troubled South American oil giant is turning things around.
According to a government news agency, the state-owned company closed the first nine months of the year with net income of R$23.6 billion, an increase of 371 percent over the same period of 2017.
The figures were released today (November 6th) by company president Ivan Monteiro and indicate that adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) reached a record high of R$85.7 billion, with a margin of 33 percent.
Monteiro was named president of the Brazilian state-controlled oil company Petrobras in June this year on an interim basis, replacing Chief Executive Officer Pedro Parente who resigned.
The result reflects higher margins in the trading of derivatives in the domestic market and the increase in exports, as well as the increase in the price of oil on the foreign market and the depreciation of the real against the dollar.
According to Petrobras, “results from higher margins in exports and sales of derivatives in Brazil, driven by the increase in Brent crude oil and by the depreciation of the real.” In addition, this result contributed to “the increase in diesel sales, the discipline of controlling expenses and lower interest expenses, due to the reduction of debt.”
Monteiro explained the result would have been even better if not for settlements needed in September to close investigations initiated in the U.S. totaling R$3.5 billion. Excluding these, as well as the effects of other lawsuits, net income would be R$10.3 billion in the quarter and R$28 billion in the accumulated of the year.
Still the general view of Monteiro is that the company cleaned house. “The resumption of our growth is positive not only for Petrobras, but also for the country, since the company generates resources for society through taxes and profit sharing, contributing to the development of Brazil through the value chain of our business,” he said.
Petrobras has had a few difficult years, with a R$14.8 billion loss in 2016, which at the time was a more than fifty percent reduction from 2015 when the loss was of R$34.8 billion. In 2017 the company sold off a number of assets and settled lawsuits related to the Lava Jato mega-corruption scandal.