The Rising Influence of Rising Affluence

[DewDiligence]

Petrobras 2Q09 EPS and EBITDA Beat Consensus

[Oddly, PBR does not hold its 2Q09 CC until Tuesday despite its having released the financials on Friday. Maybe they want to give the analysts a few days to think about the CC questions they will ask so they won’t sound as stupid as the analysts on other companies’ CC’s :- )]

http://www.reuters.com/article/marketsNews/idAFN1445914220090814

›Fri Aug 14, 2009 7:16pm EDT
By Brian Ellsworth

RIO DE JANEIRO, Aug 14 (Reuters) - Brazilian state-run oil company Petrobras' second-quarter net profit fell 20 percent from the year earlier on lower global oil prices and higher finance costs, the company said on Friday.

Petroleo Brasileiro SA (PBR) said net earnings were 7.73 billion reais ($4.16 billion) compared with 9.72 billion reais in the second quarter of 2008.

Earnings before interest, taxes, depreciation and amortization (EBITDA) were 17.51 billion reais compared with 18.63 billion reais the year before.

"A lower price for Brent (crude oil), which fell 53 percent in the (semester), falling from $109 in the first semester of 2008 to $52 in the first semester of 2009, had a strong influence on the result" the company said in a statement.

"Greater volumes of financing, of commercial hedge operations and the effect of exchange rate on foreign assets also contributed to this result."

The oil giant had been expected to post a net profit of 6.97 billion reais ($3.81 billion) and EBITDA of 14.50 billion reais according to the average forecast of five analysts surveyed by Reuters.

Financial costs of 1.4 billion reais in the first semester, sparked by greater total financing, cut into the bottom line.

Total debt rose to $35 billion at the end of the quarter, up 16 percent from the first quarter of 2009, as the company boosted leverage to develop the massive offshore sub-salt fields believed to contain billions of barrels of oil.

Production of oil and liquids rose 6 percent compared with the year earlier quarter as new oil projects, including the Frade field under development with Chevron Corp came online.

Investments totaled $32 billion for the first semester. Finance Director Almir Barbassa told reporters at an earnings news conference that the 2009 investment target of $60 billion could be increased.

Petrobras intends to invest $174 billion through 2013 in a broad plan to develop areas in the little-explored Santos Basin where the massive Tupi field lies.

In May, it pumped the first oil from Tupi as part of a 15-month test that will produce between 15,000 and 30,000 barrels per day, although the test was suspended in July due to equipment failure.

The company hopes to turn Brazil into a major energy exporter by developing sub-salt reserves discovered in 2007 that are believed to contain billions of barrels of crude.

New sub-salt exploration has been halted as the government prepares an overhaul of existing oil legislation expected to boost Petrobras' role in offshore development and give the state a greater percentage of revenues.

Energy Minister Edison Lobao said on Friday Petrobras would have at least a 30 percent stake in the future sub-salt projects.

President Luiz Inacio Lula da Silva was originally slated to present a proposal for the oil overhaul on Wednesday, but a press advisor said on Friday the government needed more time further consultations.‹