By Leo Byrne, Contributing Reporter

RIO DE JANEIRO, BRAZIL – Petrobras, Brazil’s majority-state-owned oil producer continued its downward trajectory as it announced profits of R$21.1 billion in 2012, a 36.6 percent slump when compared to the previous year. The figure marks the company’s lowest profit margin for eight years.

Maria das Graças Silva Foster, president of Petrobras, Rio de Janeiro, Brazil News
Maria das Graças Silva Foster, president of Petrobras at an August 2012 financial presentation, photo by Tânia Rêgo/ABr.

In a statement the oil giant attributed the losses to “the effects of foreign exchange depreciation, greater share of imported oil products on sales volume and higher operating expenses driven by more write-offs of dry or sub-commercial wells.”

The company also saw its operating cash flow dip, measured by EBITDA (earnings before interest, taxes, depreciation and amortization) the figure was adjusted to R$53.439 billion, 14 percent lower than during the same period in 2011.

The news wasn’t all bad however as Petrobras managed to recover from its trying third quarter with net income figures totaling R$ 7.7 billion, marking a 39 percent increase.

The company was also quick to point out that it reached it operational targets for the year, producing 1.98 million barrels per day of oil and NGL (natural gas liquids) in Brazil.

Nonetheless the numbers come at difficult time for Petrobras. Last week the company saw its share value plunge by 3.2 percent after long awaited increases in fuel prices fell short of expectations. Although prices at the pump for gasoline and diesel jumped by 6.6 percent and 5.4 percent respectively last week, analysts were concerned that the hikes would be insufficient to make up the shortfalls generated by its beleaguered refining division.

At the same time, the oil giant also slipped behind Colombia’s Ecopetrol as Latin America’s largest listed energy company by market capitalization. Petrobras dropped two places on the PFC energy fifty, to number seven and in terms of year-on-year share price was the worst performing top fifteen company.

Read more (in Portuguese).

* The Rio Times Daily Updates feature is offered to help keep you up-to-date with important news as it happens.


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