Brazilian state-led oil company Petrobras posted a loss of 3.76bn reais ($1.01bn) in the third quarter as lower oil prices, a weaker Brazilian currency against the dollar and the country’s worst recession in decades crimped revenue.
It was the third loss in five quarters at Petroleo Brasileiro, as Petrobras is formally known, and widely missed market expectations for a loss of about 800mn reais. A year earlier, Petrobras recorded a 5.34bn-real loss.
“Our strong operational result was consumed by a decline in the exchange rate,” Chief Financial Officer Ivan Monteiro told reporters in Rio de Janeiro.
He said Petrobras is “working every day to cut costs and improve our operations” and find ways to raise new cash and restructure its debt profile.
Monteiro and the company’s chief executive, Aldemir Bendine, who joined earlier this year from Banco do Brasil, are struggling to cut costs and sell assets as they seek to maintain key investments in giant offshore oilfields and cut the company’s debt, the largest in the oil industry.
Petrobras’ total debt expanded 44% to 506.6bn reais since the end of 2014, largely as a weaker real drove up the local currency value of its mostly dollar debts. In dollars, its debt shrank 4% to $127.5bn, still among the biggest of any industrial company on the planet.
The company hopes to end 2015 with $22bn in cash and has about $25bn of credit offers from lenders to try and cover its spending needs, Monteiro said.
Despite little progress on a plan to sell $15.1bn of assets by the end of 2015, Monteiro said investor interest is strong and he’s confident planned trips to Mexico, the US, the United Kingdom, Canada and China will find buyers to help meet the target. Without asset sales, Bendine has said it will be hard to finance the company’s debt.
Efforts to boost revenue and control debt have been complicated by falling oil prices, lower demand for fuel in a weak Brazilian economy and the fallout from Petrobras’ central role in the largest corruption scandal in Brazil’s history. Net sales, or total sales minus sales taxes, fell 6.9% to 82.2bn reais compared with 88.4bn a year earlier. The price of Benchmark Brent crude was 50% lower in the third quarter than a year earlier.
Earnings before interest, taxes, depreciation and amortization, a key measure of cash generation known as EBITDA, rose 82% to 15.5bn reais from 8.49bn reais.
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