Brazil’s Oil-company Petroleo Brasileiro SA Petrobras (ADR)(NYSE:PBR) which was under spotlight for all wrong reasons after massive corruption scandal, has reported its biggest ever quarterly loss due to the dropping oil prices and rising borrowing costs.
Petrobras said it has a fourth-quarter loss of BRL36.94 billion ($10.19 billion) was 39% more than a year before, when its earnings were slaughtered by write-downs linked to a vast bid-rigging and bribery scheme.
Revenue go up slightly 0.1% from the same period in 2014 to BRL85.1 billion.
The massive damages, in consecutive years, increased the doubt about Petrobras’ capacity to pay off its hefty debt, which is the largest in the oil industry. With the rising dollar value, Petrobras’s gross debt increased to BRL799.25 billion at the end of 2015, 10% more than a year earlier, even as the company managed to cut costs and spent the second half of the year trying, to sell off assets without considerable success.
Company’s Chief Executive Aldemir Bendine said in a separate statement on Monday that the company’s results might disappoint investors, but the Petrobras has showed that it can survive in the face of low oil prices.
He further said that talks for asset sales are ongoing swiftly but he declined to offer details. The company recently said that it aimed to strip $15.1 billion in assets in 2015-16.
Plummeting crude prices had been anticipated to hurt Petrobras’s balance sheet and force write-downs, but the results still bettered many analysts’ forecasts.
Most of the weakening charges came on assets in Petrobras’s inspection and production division, reflecting the reduced value of oil and gas fields at current prices.
However the company reportedly also wrote-off BRL5.28 billion on its Comperj refinery, a massive compound on the suburbs of Rio de Janeiro. The company is reportedly in search for a partner to help finish the project. The company said in last statement that refinery would now be postponed until 2023.
Petrobras’s adjusted earnings before interest, taxes, depreciation and amortization, dropped 15% to BRL17.06 billion.
Petroleo Brasileiro SA Petrobras (PBR) stock was down -2.57% to reach $5.50 in early trading on Tuesday. The company with the market capitalization of 33.28 billion has 7.44 billion outstanding shares.
