Tuesday, March 22nd 2016 - 06:25 UTC

Petrobras losses in 4Q climb to US$ 10bn; more staff cuts expected

Brazil's state-run oil company, Petrobras, reported a record quarterly loss of $10.2 billion on Monday due to a large reduction in the value of some assets amid lower oil prices. Petrobras has been at the center of a sprawling corruption scandal that has ensnared some of Brazil's most powerful lawmakers and business executives.

Once the crown jewel of Brazil's government, Petrobras' image quickly lost its luster amid mismanagement and corruption.

Petrobras is also reportedly planning to cut another 15% of its staff, just two months after slashing its management headcount by 30%.

Happier days when oil helped finance extravagant programs, fantasy dreams and widespread corruption

The embattled company said it lost 36.9 billion reais, or $10.2 billion, in the fourth quarter. That brought its full-year 2015 result to a $9.6 billion loss. Net sales, or total sales minus sales taxes, was $23.5 billion for the quarter. Adjusted earnings before interest, taxes, depreciation and amortization totaled $4.7 billion.

Once the crown jewel of Brazil's government, Petrobras' image quickly lost its luster amid mismanagement and corruption.

The discovery of huge offshore oil reserves in 2007 had been supposed to vault Brazil into the top tier of oil and gas producing nations. Then President Lula da Silva hailed the discoveries as an economic salvation for Brazil's millions of poor.

But the investigation into widespread bribery at Brazil's biggest company has eroded Brazilians' trust in the political and business elite.

Police questioned Silva earlier this month as part of the investigation. The once highly popular former president has said he committed no wrongdoing and suggests the probes are part of a political smear campaign.

Petrobras is also reportedly planning to cut another 15% of its staff, just two months after slashing its management headcount by 30%. The cut would be through a voluntary lay off program that will be announced sometime in the middle of 2016. The program is expected to result in up to 12,000 job cuts.

Last January Petrobras announced a plan to slash its management headcount in non-operational areas by 30%, a move the company hopes will save it about $442 million per year. That same month, Petrobras adjusted its 2015 to 2019 spending plan down to $98.4 billion, a $32 billion reduction from its previous $130.3 billion budget.

8 comments Feed

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1 L0B0MAU (#) Mar 22nd, 2016 - 09:08 am Report abuse
REF: “Petrobras' image lost its luster amid Mismanagement AND Corruption”: Which State-Owned Company is NOT infested with these two and Many Other Problems?
2 Brasileiro (#) Mar 22nd, 2016 - 10:57 am Report abuse

The West is every day more bankrupt! The crisis in Brazil and yet their currency (euro / dollar) continues to depreciate.

Brazil is forced to drive real of our economy to sell to speculators in exchange for dollars that fill our market. With the inauguration in May/2016 of the BRICS Bank this will not happen anymore.

It will be the end of the dollar as convertible currency!
3 Skip (#) Mar 22nd, 2016 - 11:29 am Report abuse

Why will this change anything for Brazil?

It is Russian, Chinese and Brazilian government debt that is climbing. Government debt in the west has mostly stabilised and even started dropping.

No one is forcing Brazil to do anything. You are too busy stealing from each other for us to care about your economy.
4 Lucifer (#) Mar 22nd, 2016 - 11:45 am Report abuse
“Investors will test the central bank until knowing what it actually intends to do, and understand it if is intended to tackle it either the exaggerated appreciation of the real or to purchase back outstanding contracts,” said Italo Abucater, the head of currency trading at ICAP Brasil Ctvm in Sao Paulo.

There's only so much currency manipulation they can do before the maket dings them for it.

They're doing a lot of damage to their markets screwing around like this.
5 Brasileiro (#) Mar 22nd, 2016 - 11:58 am Report abuse
The truth is that the QE-4 has begun! As the exaggerated increase in liquidity in the euro area.

The Currency War is declared!

And this time, unlike 2011, we did not stay neutral.

Brazil is fighting alongside the BRICS!

6 Lucifer (#) Mar 22nd, 2016 - 01:20 pm Report abuse
If there's a currency war Brazil will lose.
Your very meahger reserves are all tied up with crazy cross swaps and future contracts already.
If a group of hedge funds want to bring the currency down there's little to stop them.
7 L0B0MAU (#) Mar 22nd, 2016 - 01:38 pm Report abuse
Hyper-Super-Mega Inflation is likely to return to Brazil. The Current Currency Rate & the accompanying Share-Prices is a mere speculation and in a couple of weeks, the investors are very likely to get disillusioned.
A very old saying is: “BUY the rumor, SELL the news”
8 Jack Bauer (#) Mar 25th, 2016 - 05:53 pm Report abuse
@2 Brasshole
do you really think that by attacking the rest of the world will solve Brazil's problems ? but tell me, from which hole are you spaeking, the one in your face or the one you sit on ?

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