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Brazil’s state oil and gas major Petrobras, once the company with the biggest debt pile in the global oil and gas industry, booked the highest quarterly profit on record for the second quarter of 2019 on the back of asset sales, Reuters reports citing a regulatory filing by the Brazilian company.
At almost US$5 billion (18.87 billion reias), the net result was substantially higher than the analyst consensus, which stood at US$2.1 billion (8.06 billion reias). However, were it not for the one-off income from asset sales, the net profit of Petrobras would have come in lower than the analyst estimate, at US$1.35 billion (5.2 billion reias).
One potential red flag in the filing was a downward revision of capex for this year, from US$16 billion to US$10-11 billion.
Since the start of this year, Petrobras has generated almost US$12.8 billion from asset sales as its new management made divestments a top priority in a bid to shrink the debt load further and streamline the business. The largest deal so far in 2019 has been the sale of a gas pipeline network to France’s Engie, which wrapped up in the second quarter, positively affecting results.
High oil prices also helped, as chief executive Roberto Castello Branco said, as quoted by Reuters. The executive, who took the helm at Petrobras this January after the change in government in Brazil, added that most of the strong performance was the result of factors beyond the control of the company.
Even so, the result will no doubt help Petrobras’ spending plans: in June, Castello Branco announced the major would increase its investment plan for the next five years to US$105 billion from US$84.1 billion. Divestment plans for the period to 2023 were revised upwards to US$35 billion from US$27 billion.
Petrobras’ net debt stood at US$72.888 billion as of the end of the third quarter of 2018.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.