Petrobras Profit is Down 42 Percent in the First Quarter

By Richard Mann, Contributing Reporter

RIO DE JANEIRO, BRAZIL – Petrobras has recorded a net profit of R$4.031 (US$1) billion in the first quarter, representing a 42 percent decrease in comparison to the profits of R$6.961 registered in the same quarter in 2018, but also an increase of 92 percent regarding the R$2.102 billion obtained in the fourth quarter of last year.

The net income totaled R$79.999 billion, an increase of 7.4 percent increase over the value recorded in the first quarter of last year.

The adjusted EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization) was of R$27.487 billion, an increase of 6.7 percent in the annual comparison.

The gross debt of the company reached values of US$78.8 billion (R$307.1 billion) by the end of March, a decrease of US$23.6 billion (23 percent) regarding March 2018, when the gross debt totaled US$102.4 billion.

Oil production reached 2,460 million of barrels of oil equivalent per day (MBOED) in the first quarter, 5 percent less than in the same period of 2018, as a consequence of maintenance interrupting production and delays at the beginning of operations of some platforms, according to the state company.

Petrobras explained that the results in the first quarter were impacted by the adoption of a new accounting law regarding the leasing of equipment (IFRS 16 – Leases).

According to the company, “IFRS 16 eliminated the classification of financial and operating leases, with a single model going forward under which all leases result in the recognition of assets referring to the rights of use of leased assets and a leasing liability.”

Without that adjustment, the state company’s net profit would have been R$5.142 billion in the first quarter, compared to the profit of R$5.400 billion registered in the same quarter of 2018 and to the profit of R$8.035 billion in the fourth quarter of last year.

Also as a consequence of the accounting adjustment, net debt increased to a total of R$372.2 billion by the end of the first quarter, an increase of R$103.4 billion in comparison to the previous quarter.

Disregarding the effects of this rule, which was adopted by all companies open this year, net debt would have been R$266.3 billion, slightly less than the R$268.8 billion recorded in the last quarter of 2018, says the company.