Brazil's Petrobras Posts Loss Following Settlement Charges -- 2nd Update
March 15 2018 - 10:11AM
Dow Jones News
By Jeffrey T. Lewis and Luciana Magalhaes
SÃO PAULO -- Brazilian state-controlled oil company Petróleo
Brasileiro SA, or Petrobras, said Thursday it posted a net loss in
the fourth quarter and in 2017 as the state-controlled oil company
continues to suffer from the side effects of the Car Wash
corruption scandal.
The company had a loss of 5.5 billion reais ($1.7 million) in
the last three months of 2017, the Rio de Janeiro-based company
said. For the full year, Petrobras reported a net loss of 446
million reais.
Petrobras said it would have had a net profit of 7.1 billion
reais in 2017 without the extraordinary payments, including a
settlement of $3.4 billion to end a class-action suit in the
U.S.
Petrobras is recovering from the damage done by the corruption
scheme known as Car Wash, in which suppliers overcharged it and
funneled part of the money to politicians and their parties.
Petrobras in 2015 wrote off 6.2 billion reais due to the graft and
another 44.6 billion reais for overvalued assets, including
refineries, because of the scam.
The company announced at the start of this year an agreement to
settle the class-action suit filed by disgruntled shareholders, who
calculated the corruption scheme helped erase about $271 billion,
or almost 90%, billion from Petrobras's market value between 2009
and 2015.
The earnings figures show that "Petrobras is turning the page on
problems related to Car Wash," said Shin Lai, an investment
strategist at São Paulo-based research company Upside Investor.
"The change is happening and it's consistent."
Petrobras has been working to cut costs throughout its
operations, and its efforts are starting to show results.
General and administrative expenses fell 19% in 2017 to 9.3
billion reais, mostly because of lower personal costs, after
Petrobras cut staff through employee buyouts and reduced
expenses.
The company said it also agreed last year to settle a 10.4
billion-real debt with the Brazilian government.
Petrobras said it cut its net debt to $84.9 billion at the end
of 2017, the lowest level for the figure since 2012, lengthened the
average life of the debt to 8.6 years from 7.5 years and reduced
the average interest rate to 5.9% from 6.2%. Those changes helped
cut full-year debt payments to 22.3 billion reais from 25.6 billion
reais in 2016, Petrobras said.
Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com and Luciana
Magalhaes at Luciana.Magalhaes@wsj.com
(END) Dow Jones Newswires
March 15, 2018 09:56 ET (13:56 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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