Profits Soar for Petrobras, Q1 Net Profit Up 68%

Petrobras reported the company's first quarter results for 2008, with net profits growing 68%. The growth resulted from the improved operating results (lower operating expenses and increased sales and prices) and lower financial expenses.

The improved sales performance in the internal market, up 8% compared to a year ago, linked to better prices both in Brazil and abroad, and increased oil & gas production drove the net operating revenue, which was up 21%. With the lower financial and operating expenses, particularly those related to the pension plan, the net profit rose 68% in the same period.

Compared to the 4th quarter 2007, the net profit was 37% higher, due, mainly, to the lower operating expenses, among which the general and administrative costs, exploratory costs, tax costs, and to the loss with assets abroad which had been provisioned in the 4th quarter 2007. The higher sales prices and the effects derived from the lower appreciation of the Real on assets abroad, denominated in Dollars, also contributed. On the other hand, the net profit did not have the fiscal benefits derived from the payment of interest on equity capital which had occurred in the previous quarter.

The Net Operating Revenue (R$46.9 billion) was up 21%, driven by the internal economic growth. Fulfilling the goals set forth in its strategic planning, Petrobras continues investing prioritarily in developing its oil & natural gas production capacity. Total investments in the quarter were above R$10 billion, a 23% growth over a year ago. The EBITDA rose 26% to R$13.9 billion, ensuring the resources that are necessary to augment investments.

Average oil and gas production rose 2% over a year ago due to new platforms going online. Operations were kicked-off at FPSOs Cidade do Rio de Janeiro (Espadarte), Piranema (Piranema), and Cidade de Vitoria (Golfinho), and at platforms P-52 (Roncador) and P-54 (Roncador).

The Market Value rose 69% in 12 months, to R$364 billion. The Company achieved a significant increase in its market value in the 4th quarter of 2007, driven in part by the gas and light oil discoveries in the pre-salt region, in the Santos Basin, and by the perspective of increased production. The Company’s shares and receipts kept pace with the market fall trend. In spite of the 15% decrease in the market value compared to the last quarter of 2007, appreciation reached 69% in 12 months.