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Petrobras, the Brazilian state-controlled oil producer, has reported its first quarterly loss in 13 years after the sharp depreciation of the real added to existing problems at one of the region’s biggest companies.
The Rio de Janeiro-based group posted a net loss of R$1.35bn ($665m) in the second quarter, compared to a net profit of R$10.9bn in the same period a year earlier.
It was the group’s first quarterly loss since the first three months of 1999, according to Reuters’ data, and fell far short of analysts’ forecasts of a net profit of about R$3.7bn for the period.
“The principal factor that impacted net income was the depreciation of the real against the dollar,” said Petrobras in an accompanying statement late on Friday.
Brazil’s real, which has been battered by a weaker domestic and global economic outlook, fell about 11 per cent against the US dollar over the second quarter, hitting the country’s largest companies which have most of their debt in dollars.
Last month, Vale, the Brazilian miner, posted a quarterly drop in net income of nearly 60 per cent after the real’s sharp declines earlier this year increased the company’s US dollar-denominated debt and raised debt servicing costs.
However, just as Vale’s shares have been dragged down by concerns over other issues aside from Brazil’s weakening currency, Petrobras has also fallen out of favour with investors for more fundamental reasons.
The oil company’s preferred shares, the most widely traded class of stock, were quoted at just under R$20 earlier on Friday, below the R$23 they were worth at the time of Brazil’s huge oil discoveries in early 2007.
After discovering offshore reserves five years ago comparable in size to the 60bn some barrels of oil found in the UK’s North Sea, Brazil’s government has enforced rigorous local content rules, raising Petrobras’s operational costs.
Government policy to cap inflation by preventing Petrobras from raising domestic fuel prices has also been blamed for eroding the company’s profits by forcing it to import fuel at a loss to meet rampant demand from Brazil’s growing middle classes.
Petrobras’s earnings before interest, taxation, depreciation and amortisation fell to R$10.6bn from R$16.5bn in the first three months of the year and from R$15.9bn in the first quarter of last year, the company said on Friday.
Net revenue edged up only 2.9 per cent to R$68bn from the previous quarter and rose 11.5 per cent from the same quarter last year.