Petrobras (the Brazilian state-owned oil company) reported disappointing results for the fourth quarter, with a loss of $2.8 billion, compared to the profit of $31 billion the year before.
Reuters stated that this current cycle of decline is primarily caused by one-time events, the volatility in Brent oil prices, and a future more volatile diesel markets.
Petrobras is expecting to pay out 9.1 billion Reais as ordinary dividends, despite its poor financial performance.
Petrobras’ net revenue for the third quarter was 121.3 billion reals ($24.04billion), a decline of 10% and below analysts’ estimates of 127.8 reais.
Petrobras bottom-line impact
Petrobras posted a loss of 31 billion reals for the third quarter. This is a stark contrast from the net profit of 31 billion reals recorded one year ago.
This decline was attributed by the company to changes in exchange rates affecting debt between state-owned oil companies and their international subsidiaries.
Petrobras said that despite the loss reported, these financial transactions had no impact on its cash flow.
If these effects were excluded, the company’s net profit would still have been 17.7 billion Reais. However, this represents a decline of 53% compared with the same time last year.
In a recent statement, Fernando Melgarejo, the Chief Financial Officer of the Company, noted that while these transactions had an impact on net profits, they also directly impacted equity.
Petrobras dividend fell by half in the last quarter. This disappointed investors.
The company is a good cash-generator despite political pressures at the beginning of the Lula da Silva presidency.
Analyst Regis Cardoso of XP Inc. highlighted dividends and free cash flow as the two biggest disappointments. He cited higher than expected capital expenditures.
In a letter to clients, he said that it would take several quarters with solid cash flows to make up for the disappointment. He also added that this issue was likely to cause further discussion.
Other Metrics
Petrobras has spent more than $16.6 billion dollars in 2024. This is a 31 percent increase over the year before and exceeds its own expectations.
It attributed this to the accelerated payment of contractors on the Buzios field offshore, which was aimed at reducing supply chain risks.
Analysts had predicted a profit of 61.9 billion reals. However, the adjusted EBITDA came to 41 billion reais.
The adjusted EBITDA of the company was 34%. Its net debt to adjusted EBITDA ratio, which had been projected at 1.17, actually reached 1.29, a higher value than expected.
The quarter’s free cash flow was 21.70 billion reals, while net debt reached 52.24 milliards reais. This exceeded the expected 47.98 trillion reais.
The post Brazil’s Petrobras reports $2.8B loss in Q4, Revenue down 10%, may be updated as new developments unfold.
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