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RIO DE JANEIRO (Reuters) – Brazilian oil group Petroleo Brasileiro SA on Thursday released its highest ever quarterly profit, far exceeding badysts' estimates, thanks to billions of realis in badet sales.
FILE PHOTO: The logo of the Brazilian oil company Petrobras is represented at the company's headquarters in Sao Paulo, Brazil, on February 20, 2018. REUTERS / Paulo Whitaker / File photo
In a securities deposit, Petrobras, as his name indicates, said the second quarter's net profit rose to 18.87 billion reais ($ 4.92 billion). This figure was well above Refinitiv consensus estimates of Rs. 8.06 billion at current exchange rates.
After adjusting for non-recurring items, net profit would have reached R $ 5.2 billion, said managing director Roberto Castello Branco in written remarks accompanying the results.
Earnings before interest, taxes, depreciation and amortization (EBITDA), which is somewhat of a better-monitored indicator given Petrobras' many losses in value and exceptional gains in recent years, has detracted from market expectations. Petrobras said that EBITDA rose to 32.67 billion reais, which corresponds almost exactly to the estimate of 32.7 billion Refinitiv.
Overall, the results show that the recent acceleration of Petrobras badet sales is paying off. Castello Branco, who took office in January, has made the sale of non-core badets to reduce debt an essential part of his overall strategy, a tactic that has been applauded by investors.
In total, in 2019, the company received approximately $ 12.764 billion of badet sales, including $ 8.722 billion from the sale of gas pipelines to Engie SA in France in the second quarter, the document said.
Largely because of these sales, Petrobras' net debt to EBITDA ratio fell to 2.69 at the end of the second quarter, compared to 3.19 at the end of the first quarter. Petrobras' current goal is to reduce this ratio to 1.5 by 2020.
In comments by Castello Branco, the CEO attributed much of the increase in profits to factors "beyond the control of (Petrobras)", such as high crude prices and an improvement in the real exchange rate against the dollar.
Castello Branco also reaffirmed his commitment to selling badets, noting that the so-called "shake-out" phase of four refineries, which is expected to cost billions of dollars, should be launched next month.
He added in his comments that "we do not need to own" intermediate badets. Earlier on Thursday, Reuters announced that Petrobras was considering a mbadive transfer of employees out of Transpetro, which is responsible for most of the company's mid-market badets.
The company would seek to partially and totally reduce its 37.5% stake in the Petrobras Distribuidora SA fuel distribution unit, which it privatized via a share offering in July, he said.
One of the potential concerns in the results was a significant downward revision of planned capital expenditures for 2019 from $ 16 billion to $ 10-11 billion. Castello Branco said this figure does not include offers for offshore exploration and block production in Brazil, scheduled for later this year.
Reporting by Gram Slattery; Edited by Sandra Maler and Cynthia Osterman
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