Petroleo Brasileiro Petrobras SA reported fiscal year 2015 first quarter earnings result on Friday after market close. The Brazilian oil giant posted a 1.2% decline in net profit during the period but was able to post 50% increase in non-GAAP earnings, as new management of the company tried to reduce costs and move on after corruption outrage which surrounded the company and cost it around $17 billion in asset write-down.
Petrobras reported $1.78 billion ( 5.33 billion reais) in net income slightly less than 5.39 billion reais in the similar quarter in 2014. The revenue of the company accounted for 74.3 million reais during the quarter drop by 9% from the similar quarter previous year. EBITDA surged by 50% on year over year basis and reach 21.52 million reais.
CFO, Ivan Monteiro said,“We’re very satisfied with the results we’ve presented but we know there are a lot of challenges ahead,”
As Petrobras works to take itself out of the write-off and negative effects of the corruption, it is cutting its budget and seeking for ideas to ct its huge debt. during the 1Q, the company reduces its expenditure by 13% to almost 17.8 billion reais, and emphasizing on slashing costs in downstream segment, in which capital expenditure fell by 64%.
The downstream segment, which approximately lost 60 million reais because of fuel subsidies provided by government between 2011 to 2014, posted a profit of 6.18 billion reais in the January to March 15 period as the company kept diesel and gasoline domestic price stable in spite of tumbling crude oil prices in global market.
Petrobras is the largest indebted energy firm of the world. earlier in March, the company said that it is looking to sell $13.7 billion of fixed assets in the year 2015-16. the company has $133 million of debt burden.
Federal prosecutor of Brazil says that Petrobras suppliers together with cartel of construction firms conspired to inflate the project prices and using the amount to bribe former company's officials and local politicians.
Four former Petrobras executives have been charged with crimes including corruption and money laundering. One former executive, Paulo Roberto Costa, was sentenced last month to six months under house arrest after he made a deal with prosecutors in exchange for telling what he knew of the alleged scheme.
Company's four former officials have been alleged with crimes like money laundering and corruption. Paulo Roberto -a former executive of Petrobras was sentenced to 6 months house arrest last month in exchange of details regarding corruption which he provided to federal prosecutors.
Petrobras stock was up 2.01% to $10.13 at market close on Friday May 15.
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