Petrobras profit misses forecasts, oil output increase eyed

Brazilian state-run oil firm Petroleo Brasileiro SA posted quarterly results that missed expectations on Tuesday, although management flagged a potential production boost in the second quarter as new platforms ramp up output.
Petrobras, as the firm is known, posted a quarterly profit of 4.03 billion reais ($1.02 billion), down 42 percent from the same period a year ago. That was well below the Refinitiv estimate of 5.36 billion reais. As in previous quarters, results were clouded by judicial contingencies and other one-off items that have become commonplace at the company, which in recent years has been at the center of one of the world's largest-ever corruption probes.
When adjusted for those one-off items - including 1.3 billion reais in judicial contingencies due to an ongoing dispute with a bankrupt rig lessor - Petrobras said it would have reported a quarterly profit of 5.1 billion reais. Quarterly oil production at Petrobras fell 4 percent from the previous quarter, a figure that was previously reported in part by Brazil's oil regulator. Petrobras attributed the decline in part to a series of stoppages.
The firm said that its April oil production grew to 2.61 million barrels per day (bpd), and the firm's P-74 oil platform completed its ramp-up period on May 2, reaching 150,000 bpd. "The expectation is that oil production will increase in the second quarter as new complexes advance in the ramp-up process," Petrobras wrote.
In comments accompanying the results, Chief Executive Roberto Castello Branco continued to emphasize the firm's focus on asset sales, which has emerged as the key focus of his mandate. He also emphasized a number of cost-saving measures at the firm, including the shuttering of several international offices and the gutting of the company's Houston office, which was at the center of a major corruption scandal in December.
Earnings before interest, taxes, depreciation and amortization adjusted for certain one-off items, known as adjusted EBITDA, came to 27.5 billion reais in the quarter, though the firm said that figure would have been 25.2 billion reais if not for an adjustment in Petrobras' accounting practices.
Both figures missed the Refinitiv estimate of 28.9 billion reais. Net debt increased some 38 percent in the quarter, though Petrobras said debt would have in fact fallen marginally if not for the adjustments to its accounting methods.