Petrobras' Profit Declines On Lower Prices, Charges
RIO DE JANEIRO, Aug 11 (Reuters) - State-led oil company Petrobras reported second-quarter profit that fell by nearly a third from a year earlier, missing analysts' expectations as oil prices fell and it took charges for layoffs and the impairment of a refinery.
Petroleo Brasileiro SA, as the company is formally known, said net income fell 30 percent to 370 million reais ($118 million) in the three months ended June 30 compared with a profit of 531 million reais a year earlier, the company said in a statement.
Last year's profit was one of the most anemic quarterly results in the company's recent history. The second-quarter 2016 profit comes after a 1.25 billion reais loss in the first quarter of this year.
The average profit estimate of eight analysts surveyed by Reuters was 1.81 billion reais. Estimates, though, ranged from a 5.56 billion real profit to a 1.25 billion real loss, as analysts struggled again with a lack of clear Petrobras guidance.
Part of the problem for analysts trying to chart the company's progress is Petrobras' huge debt, Chief Financial Officer Ivan Monteiro told reporters on Thursday. This requires the company to make quick changes to preserve enough cash to pay its obligations.
While total debt has eased 2 percent since the end of 2015, at $124 billion it is still the largest in the oil industry.
"From our point of view the company is becoming more predictable," Monteiro said. "Clearly we're still facing difficulty because the company's debt level is still very high ... still at a level where we are required to maintain a very high level of liquidity."
After a 26 percent decline in the average price of benchmark Brent crude oil compared with a year earlier, Petrobras net sales, or total sales minus sales taxes fell 11 percent from a year earlier to 71.3 billion reais, missing the average survey estimate of 73.8 billion reais.
The 1.21 billion real cost of a voluntary dismissal program and 1.12 billion real impairment charges for the Comperj refinery, whose construction was halted last year after eating up $13.5 billion of investment, kept costs high even as revenue fell.
As a result, operating profit fell 25 percent to 7.18 billion reais. If a scaled back Comperj opens as now planned in 2023, it will be more than a decade late and nearly triple its original $5.2 billion budget.
Contract fixing, bribery and political kickbacks from the refinery are part of a giant corruption scandal that implicated, and resulted in jail terms for a number of its former senior executives and contractors.
Earnings before interest, taxes, depreciation and amortization, or EBITDA, a measure of a company's ability to generate cash from operations, was little changed rising 2.8 percent to 20.3 billion reais, in line with analysts estimates.
($1 = 3.14 Brazilian reais)
(Reporting by Jeb Blount; Additional reporting by Marcelo Teixeira in Sao Paulo; Editing by Bernard Orr)
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