By Sabrina Valle and Gram Slattery
RIO DE JANEIRO (Reuters) – Brazilian state oil company, Petroleo Brasileiro SA
The result, down from a record quarterly profit of 18.9 billion reais a year ago, came when the company pursued an aggressive volume-over-cent strategy to boost sales as crude oil prices slumped, reaching multi-decade lows in April.
In filing securities, Petrobras, as the company is known, said its cash earner, or EBITDA, was 24.99 billion reais in the April to June quarter.
This is ahead of Refiniti’s consensus estimate of 20.9 billion reais, but that number is driven by the main non-recurring items, namely the court’s victory in a major tax dispute, the company said. Without a one-time item, EBITDA will come in 17.7 billion reais, he said.
The swing to loss illustrates how Petrobras’s record exports and stable production levels are not enough to isolate Rio-based companies from the long-term effects of the new corona virus on the oil industry.
“The price of Brent at $ 65 per barrel in February fell to $ 19 per barrel in April 2020 due to a 25% contraction in global demand, threatening the sudden cessation of cash flow,” Petrobras Chief Executive Roberto Castello Branco said in a letter to investors.
Crude oil inventories built in the first quarter of this year were sold at a discount in the second quarter, contributing to a loss of 1.1 billion reais, the company said.
Exports reached a record in terms of volume in April, with more than 1 million barrels per day sold. China is a destination of 87% oil.
When demand for fuel plummeted, Petrobras sought to place its products in an effort to avoid costly stoppages amid a planned increase in highly productive deep-water fields, but revenue figures show that the product was exported with thin margins.
Petrobras sales revenue fell more than 44% compared to the second quarter of 2019, to 27.7 billion reais.
(Reporting by Sabrina Valle and Gram Slattery; additional reporting by Roberto Samora. Editing by Richard Pullin)
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