Petrobras reports unexpected Q3 loss
November 12, 2016, 9:21 am

Petrobras is going ahead with plans to fire thousands of employees by 2020 [Xinhua]

Weak prices in the oil market worldwide hit the company hard resulting in a net loss of $4.9 billion in the last quarter, five times more than a year earlier.

Chief Financial Officer Ivan Monteiro told reporters that operational and cash flow trends improved – which would have lead to a largely profitable quarter without any impairments.

The company’s revenues were also hit by the weaker reais currency.

“The message we want to convey is that these impairments are non-recurring, and that we don’t expect them to happen, not at least in this magnitude, in the coming future,” Monteiro said at an event to discuss the results in Rio de Janeiro.

The company is currently going through a massive restructuring to deal with crippling debt, low oil prices, and a massive corruption investigation that has seen a number of its executives arrested.

In 2015, the company suffered record consolidated net losses of 36.9 million reais ($10.4 billion). That year, it also began a massive divestment plan worth $98.4 billion to pay down its debt, generate more cash liquidity and face the crisis sparked by low oil prices.

Petrobras is the world’s most indebted major oil firm, marred by a crippling corruption scandal that will soon lead to the transfer of its ownership to the private sector.

A number of prominent Brazilian officials, including former President Lula Da Silva, have been charged with some form of corruption or impropriety related to the Petrobras corruption probe.

Media reports suggest the government is seeking a price of $9 bln – $13 bln.

Although it is the country’s largest employer, the company is going ahead with plans to layoff 12,000 employees by 2020 in a bid to save around 33 billion reais ($9.25 billion) by 2020.

The BRICS Post with inputs from Agencies