Petrobras surprises and closes 2020 with a R$7 billion profit

RIO DE JANEIRO, BRAZIL – Petrobras recorded profits of R$59.8 (US$10.9) billion in the 4th quarter last year and closed the year with a profit of R$7.1 (US$1.3) billion. The result contrasts with the losses expected by the experts.

Low oil prices and a production drop in the 4th quarter had been expected to lead to a net loss for the state-owned company.

In the year, revenue totaled R$272 (US$50.3) billion. It was R$74.9 billion in the last quarter.

EBITDA (earnings before interest, taxes, depreciation, and amortization) reached R$112.8 billion in the year. In the 4th quarter, it was R$47 billion.

Net debt over EBITDA dropped from 2.4 to 2.2 times. This indicator is useful to predict the company’s capacity to fulfill its financial commitments, taking into account its current EBITDA. The value of 2.2 is considered good.

The 2020 result coincided with the week in which the company’s Board of Directors agreed to take the first step in replacing the state-owned company’s CEO Roberto Castello Branco, following president Jair Bolsonaro’s decision.

Jair Bolsonaro announced the replacement of Castello Branco last Friday, after criticizing the company’s pricing policy.

Last Monday, Petrobras’ shares plummeted 20%, but recovered slightly over the next few days as the government is trying to signal the market that it will not compromise Petrobras’ cash flow with any pricing policy, such as the one made during ex-president Dilma Rousseff’s administration.

Production

Petrobras’ production in 2020 was strong, as the company had already announced in January. Annual production records were set, with 2.28 million barrels of oil and gas per day and 2.84 million barrels of oil equivalent per day of total production. Record marks were last set in 2015.

Source: Exame

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