Petrobras Nine Month Net Profits Rise 23% to US$7bn on Year

Brazil's federal energy company Petrobras (NYSE: PBR) posted net profits of 15.6bn reais (US$7.07bn) in the first nine months of 2005, up 23% from 12.7bn reais in the same period a year earlier, the company said in a statement.

Gross operating revenue rose to 129bn reais in the first nine months of this year, up 16% from 111bn reais in the same period of 2004. Operating profits were 29bn reais, up 32% from 21.9bn reais a year earlier. Ebitda rose to 34.8bn reais, up 30% from 26.8bn reais in the same comparison, the company said. Higher sales and prices of oil and oil derivatives were behind the increase, Petrobras said.

The company sold crude oil domestically at an average price of US$45.17 a barrel in 2005, which compares with US$32.94/b last year, the company said. Internationally oil was sold at US$34.25/b against US$26.01/b in 2004.

Sales of oil derivatives in Brazil rose 2% by volume in first nine months, year-on-year.

Domestic and international oil and natural gas output rose 9% to 2.2 million barrels of oil equivalent a day (Mboe/d) in the first nine months of 2005, up from 2.02Mboe in the same period a year earlier. This was mainly due to a 12% increase in domestic output, which also reduced Petrobras' spending on oil imports to supply local refineries and oil derivative markets.

The increase in sales and prices offset a rise in costs, including a surge in lifting and refining costs, which rose to US$5.54/b and US$1.93/b in the first nine months of 2005 respectively.

By comparison lifting and refining costs in the first nine months of 2004 were US$4.18/b and US$1.29/b respectively. Lifting costs rose because of an appreciated local currency and higher leasing costs of equipment and platforms due to a heated global oil market, the company said.

Refining costs rose because of scheduled maintenance stoppages at four of Petrobras' 11 refineries and higher personnel costs because of salary increases, the company said.

All the company's operational units except gas and power posted profits, Petrobras said. The loss in the gas and power unit, however, was reduced to 148mn reais in the first nine months of 2005 from 424mn reais in the same period a year earlier.

The company's overall direct investments in its operations rose to 14.8bn reais in the first nine months of the year, up 2% from 14.5bn reais in the year-ago period.

Investments in upstream exploration and production operations also rose by 2% to 8.91bn reais in first three quarters of 2005. Investments in supplies operations including refining and petrochemicals fell to 2.18bn reais in the first nine months of 2005, down 18% year-on-year from 2.67bn reais. Investments in gas and power operations, which include pipelines and investments in gas-fired power plants, surged to 1.1bn reais in the first nine months of 2005, up from 235mn reais a year earlier.

Petrobras officials will hold a webcast on November 14 to explain the results.

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