Petrobras Posts 2005 Net Profits of US$11.2bn, Up 40%

Brazil's federal energy company Petrobras (NYSE: PBR) posted net profits of 23.7bn reais (US$11.2bn) in 2005, up 40% from 16.9bn reais in 2004, the company said in a statement to the Sao Paulo stock exchange Bovespa late Friday.

In the fourth quarter of 2005, Petrobras posted net profits of 8.14bn reais, almost double the 4.24bn reais in the same period a year earlier, the company said.

The company's gross operating revenue rose to 179bn reais in 2005, up 19% from 150bn reais in 2004. Net operating revenues rose 23% 137bn reais from 2004. Petrobras' operating profits before financial revenues and expenses, equity income and taxes rose 33% to 39.7bn reais in 2005 from 29.9bn reais in 2004.

An 11% increase in total oil output in 2005 compared with 2004, a decline in oil imports, an increase in refining output and a 4% increase in sales of oil derivatives helped increase revenues.

Revenue was also helped by an increase in the amount of domestically produced oil compared to imported oil (to 80% from 76%) processed in Petrobras' 11 refineries in Brazil, the company said.

Petrobras' net financial expenses rose to 2.84bn reais in 2005 from 3.32bn reais in 2004 because of an appreciation of the local currency, which increased servicing costs of the company's 48.2bn-real gross debt.

The company's finances were also helped by an increase in the average price of oil, natural gas, fuels and other products sold. In 2005, Petrobras sold oil at an average price some 30% higher than 2004 prices; gas was sold at prices that were 13% higher on average and fuels were 20% more expensive in the same comparison.

Petrobras' oil and gas production in Brazil and overseas averaged 2.22 million barrels of oil equivalent per day in 2005, a 10% increase over 2004.

Petrobras' Ebitda rose 30% to 47.8bn reais in 2005, the company said.


Petrobras invested 25.7bn reais in all of its operations in 2005, up 14% from 22.5bn reais in 2004. Of the total, 22.9bn reais was spent directly by the company on its own operations, while 2.39bn reais was spent on special purpose ventures created to manage specific projects.

The company's direct investments in exploration and production in 2005 reached 13.9bn reais, up 12% from 2004. Investments in gas and power were significantly increased to 1.53bn reais in 2005, up 144% from 625mn reais invested in 2004.

Petrobras not only bought control of three gas-fired power plants but also started projects to expand its natural gas pipeline network in 2005.

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