RIO DE JANEIRO (Reuters) – Petrobras Brazil posted unexpected losses thanks to non-recurring fiscal costs, even as operating income was supported by a recovery in fuel sales and oil revenues.
In Wednesday’s securities filing, Petroleo Brasileiro SA PETR4.SA, the official title of the state-owned oil company, recorded a third-quarter loss of 1.546 billion reais ($ 275 million). Income before interest, tax, depreciation and amortization (EBITDA), adjusted for one-time items, was 33.4 billion reais, above Refinitiv’s estimate of 29.7 billion reais.
Among the one-time charges the company highlighted were a 1.9 billion reais payment to two state governments to settle unpaid tax disputes, as well as a significant bond buyback program. The decline in the Brazilian real against the US dollar helped amplify some of the losses, the company added.
Petrobras said that, excluding one-time items, the company will post a net profit of 3.2 billion reais, beating Refinitiv’s estimate of 736 million reais.
Among the positives for the company is significant sales growth, especially gasoline and diesel. Net revenue was 70.7 billion reais in the quarter, up 39% from the previous period.
“The recovery in sales of diesel and gasoline is prominent,” the company said. “These products were severely affected by COVID-19 in the second quarter and the recovery is the strongest in our portfolio, both in terms of volume and price.”
Crude oil exports to China – which have skyrocketed in recent quarters as production increased as the worst pandemic passed – slowed to pre-pandemic levels. Meanwhile, exports to other markets such as the United States, Spain and Indonesia have grown significantly since the second quarter.
Even Chinese demand may have recovered later in the quarter.
Brazil jumped to become China’s third-largest crude supplier in September, import data showed on Sunday, as independent Chinese refiners scooped up cheap supplies of relatively high-quality South American exporter oil.
Petrobras said that average production costs fell from $ 7.90 per barrel of oil equivalent in the second quarter to $ 4.50 in the third, thanks in part to increased efficiency and partly due to real depreciation.
($ 1 = 5.62 reais)
Reporting by Gram Slattery and Sabrina Valle; Edited by Christian Plumb and Sam Holmes