Petrobras posts 1Q03 net profits of US$1.85bn

Brazil's federal energy company Petrobras reported Thursday consolidated net income of 5.55bn reais (today US$1.85bn) for the first quarter 2003, up 540% from 866mn reais in 1Q02. "This result not only reflects Petrobras' appropriate pricing policy, but is also indicative of an improving outlook for the Brazilian economy, with the foreign exchange rate registering significant appreciation, positively impacting not only our debt but also boosting our already growing export business," Petrobras president Jose Eduardo de Barros Dutra said. Petrobras said gross margins grew 49% driven by higher international oil prices and an increase in exports. Results were also impacted by the appreciation of the real in relation to the US dollar (5.1%), which positively affected total debt by 627mn reais for the quarter. The effects were offset by conservative provisioning for liabilities related to the energy segment exposure, the company said. Consolidated gross revenue was 33.4bn reais for the quarter, up 88% from 17.8bn reais in 1Q02, while consolidated net operating revenue was 24.5bn reais, up 118% from 11.2bn reais, reflecting higher international oil prices, the company said. EBITDA was 9.5bn reais in 1Q03, up 107.8% on 4Q02. Total investments in 1Q03 were 3.59bn reais, up 44% from 1Q02, and were spent mainly on developing oil and natural gas capacity. As of March 31, 2003, the company's market value was 53.5bn reais. As of March 31, 2003, Petrobras's net debt was 34.9bn reais, down 9%from December 31, 2002, principally due to the appreciation of the real and the increase in its cash position during the quarter. Total oil, NGL and natural gas grew about 5% year-over-year to reach an average of 1.9 million barrels of oil equivalent a day (boe/d) for the quarter. The boost came largely from the start-up of new wells in the Marlim field (P-35 and P-37), in Espadarte (ESPF) as well as the new wells comprising the P-38/P-40 system in the Marlim Sul field, Dutra said. "The company is on the right track to achieve a trade surplus in the medium term," Dutra said. Dutra said a new oil find in the Campos Basin at well 9-MLL-3, close to the Marlim Leste field, contains estimated reserves of 270 million barrels of oil equivalent.