Petrobras posts US$4.82bn loss

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Tuesday, November 15, 2016

Brazil's state-run oil company Petrobras reported a 16.5bn-real (US$4.82bn) loss in the third quarter, impacted by higher-than-expected impairment charges.

The result was the third-largest in the company's 63-year history and was around five times bigger than the US$997mn shortfall in the year-ago quarter, according to the earnings statement.

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Among the devalued assets were oil and gas fields, equipment, the Abreu e Lima refinery and the Suape petrochemical complex.

Petrobras said the write-downs corrected the unrealistic value of its investments amid a corruption scandal and prolonged oil price slump.

In addition to trimming the value of assets by 15.3bn reais, the company said it pruned investments by 417mn from July to September.

Despite the poor overall result, cash flow rose 52% year-on-year to 16.4bn reais in Q3 while the company's net debt dipped to 326bn, down 17% on the end-2015 figure.

CFO Ivan Monteiro said that Petrobras would have made a profit of 600mn reais without the asset devaluation.

"The result of the impairment had a significant impact on the company's profit, that is the message," Monteiro said. "This was a non-recurring event and we do not expect further impairment charges of this magnitude."

Petrobras said it has raised US$9.8bn from asset sales since January 2015, around 65% of its target.

In September, the company said it planned to receive US$19.5bn from divestments in 2017 and 2018, having previously set a US$15.1bn goal for 2015-16.