Rio De Janeiro: Brazilian state oil company Petrobras said net income for the third quarter rose 3% from the previous quarter, missing analysts’ expectations, as a stronger currency lowered financial expenses and sales volumes rose within Brazil.
Profit reached 8.6 billion reais ($5 billion), below the 9.3 billion reais ($5.5 billion) predicted for the quarter by six analysts. In the second quarter, the company earned 8.3 billion reais.
Earnings before interest, taxes, depreciation and amortization, a gauge of operational profitability known as Ebitda, fell 7% to 14.7 billion reais from the second quarter as oil production slipped 1%.
Net revenue rose 2% from the previous quarter, the company said in a securities filing.
On a year-over-year basis, profit was up 8%, though markets have been focused on the sequential quarter comparison, in part because of an accounting change last year that made it difficult to project the year-on-year change. The company strengthened its balance sheet in the third quarter with a $70 billion stock offer -- the world’s largest -- that involved an oil-for-shares swap with the Brazilian government, Petrobras’ controlling shareholder.
Brazil’s real currency appreciated 6% during the third quarter. A stronger real reduces servicing costs for debt denominated in foreign currency and makes it cheaper for the company to buy or lease equipment produced outside Brazil.
The company’s $224 billion, five-year investment plan calls for production in Brazil to rise to around 3 million barrels per day (bpd) by 2014 from the current levels near 2 million bpd as it ramps up production in subsalt discoveries such as Guara and the giant Tupi.