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By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – The oil giant of Brazil, Petrobras, registered a net income during the fourth quarter of 2016, despite registering a loss for the overall year, according to company officials. The results, presented on Tuesday night, show that the cuts in investments and selling off of assets have helped the company decrease its overall billion-dollar debt.

Brazil,Petrobras President Pedro Parente during Tuesday's press conference,
Petrobras President Pedro Parente during Tuesday’s press conference, photo by Andre Motta/Agencia Petrobras.

The oil giant reported a net income for its Q4 2016 of R$2.5 billion, after registering a loss of R$16.4 billion in the previous quarter. Overall the loss for 2016 was of R$14.8 billion, a more than fifty percent reduction from 2015 when the loss was of R$34.8 billion.

“Petrobras results in 2016 were marked by a significant improvement in its operational performance over the course of the year, reflected in a reversal from the loss posted in 3Q16 to a net profit of R$2.51 billion in 4Q16, and a reduction in indebtedness,” said the company in its press release.

According to company officials, despite the lower oil prices in 2016, an eight percent decline in sales of oil products in the Brazilian market, and the reduced power generation, the company obtained higher diesel and gasoline margins last year than in 2015.

Officials at the press conference said they were pleased with the results and would continue to focus on reducing costs.

“It is the seventh quarter [fourth quarter of 2016] followed by positive cash generation, a very positive operating cash generation margin of around 31 percent. A number that leaves us quite well situated, compared to the global oil and gas industry,” said Petrobras President, Pedro Parente on Tuesday.

According to Parente, Petrobras will continue to work towards reducing the company’s debt, which is a little under US$100 billion, despite the 22 percent reduction in 2016 in comparison to 2015.

“Bringing this number to below US$100 billion is an important milestone, but it is still close to $100 billion. We need to keep our focus, our focus on reducing that number. The company’s leverage, that is, the comparison of this debt with our operating income is still a high level, especially in Brazilian conditions where real interest rates are high,” concluded the official.

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