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Petrobras reports 42.2% decline in third quarter profits

Petrobras reported a profit of R$26.6 billion in the third quarter of 2023, down 42.2% compared to the same period last year. The performance reflects low oil prices in the domestic market and selling prices of derivatives.

In the quarter, the company sold its oil products at an average price of R$464.1 per barrel, a 33% decline compared to the third quarter of 2022. The average price of Brent oil, which determines the value of the company’s exports, fell 14% to US$86.76 per barrel.

For the year, Petrobras made a profit of R$93.5 billion, down 35.5% from the previous year. The company ended the quarter with revenues of R$124.8 billion, 26.6% less than the same period last year. Ebitda, an indicator that measures cash generation, fell 27.6% to R$66.2 billion.

In the third quarter, Petrobras reported strong growth in its oil and gas production, reaching 2.88 million barrels per day, about 9% more than the same period in 2022. Its fuel sales rose 1.3% to 1.82 million barrels per day.

This was the first full quarter under the company’s new pricing policy, introduced in May, which no longer follows international price parity. The company’s refining sector, responsible for fuel production, saw a 45% decline in profit, to R$4 billion.
Profit margins in the segment have improved compared to the previous quarter, rising from 8% to 9%, but still remain at lower levels than in previous years.

The exploration and production sector, hit by cheap oil, had a profit of R$30.6 billion, a decline of 23%.

The company is now preparing to launch its first five-year strategic plan under the third term of Luiz Inácio Lula da Silva (PT), who has re-introduced a more developmental role for the company with investments in areas abandoned by the previous administration. Had promised to start.

Given the high forecasts of investment in renewable energy, union representatives have opposed approving the budget. In addition to the decarbonization of operations, there is approximately US$20 billion in a range of segments: wind, biofuels and hydrogen.

In total, the proposed plan exceeds US$100 billion, significantly more than the US$78 billion approved by former President Jair Bolsonaro (PL) last year.

Sources say the main hurdle is the company’s ability to finance the plan within its US$65 billion debt limit and maintaining its commitment to distribute 45% of its free cash flow in dividends. (Nicola Pamplona/Folhapress)

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