By Lise Alves, Senior Contributing Reporter

RIO DE JANEIRO, BRAZIL – After four years registering losses, Brazil’s oil giant, Petrobras, announced the company registered a net income of R$25.8 billion in 2018. This is the first positive result in five years and also the highest since 2011, according to officials.

Brazil,Petrobras' CEO Roberto Castello Branco announces closing of international offices.
Petrobras’ CEO Roberto Castello Branco announces closing of international offices, photo by Fernando Frazão/Agencia Brasil.

“Petrobras’ performance in 2018 was undoubtedly the best in many years, which includes obtaining some historical records, involving free cash flow and adjusted Ebitda, and the interruption of four years of losses,” president of Petrobras, Roberto Castello Branco, stated in a letter sent to the market on Wednesday.

According to officials the company recorded two financial records: an adjusted Ebitda (Earning Before Interest, Taxes, Depreciation and Amortizations) of R$114.9 billion and a positive free cash flow of R$54.6 billion.

For Castello Branco the results presented by the company in 2018 reflect factors such as higher margins in sales of derivatives and oil exports; a recovery of market share in diesel and a decrease in general and administrative expenses; a reduction of interest expenses, due to the decrease in indebtedness; the regularization of credits with Eletrobras and the selling of assets.

The 2018 Petrobras results, however, showed that oil and gas production reached 2.63 million barrels of oil equivalent per day (Mboed), five percent lower than in 2017.

In 2019, Petrobras forecasts an increase in oil and natural gas production to 2.8 million boed. This growth, says Petrobras officials, will be made possible by the increase in production from the newly installed platforms, as well as the start-up of the P-77 and P-68.

To further reduce costs Petrobras’ new CEO, Roberto Castello Branco, announced that the company would close international offices in New York, Japan, Iran and the African continent, as well as vacating the seven floors that the company has occupied in a building on São Paulo’s iconic Avenida Paulista.

“Of course we will preserve those (offices) we think are indispensable, like the ones in Houston, London, the Netherlands, Singapore and China,” said Castello Branco in a video to employees earlier this week.

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