Petrobras Net Profit Falls 68%

By Paul Kiernan Features Dow Jones Newswires

Brazilian state-controlled oil company Petróleo Brasileiro SA, or Petrobras, on Thursday reported a decline in its second-quarter earnings amid lower sales and a higher tax bill.

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Petrobras said its net profit dropped 68% from the second quarter of 2016 to 292 million Brazilian reais (about $92.3 million), the company said in a filing.

"We have a number of nonrecurring factors...that substantially affected that number," Chief Executive Pedro Parente said at a news conference.

The biggest were unfavorable rulings in tax cases that forced Petrobras to shell out 6.23 billion reais. The company also had to provision 818 million reais due a dispute involving an offshore drilling vessel.

Those issues aside, Petrobras executives said the company posted a decent result. Free cash flow was positive for the ninth-consecutive quarter, Mr. Parente said, allowing Petrobras to continue chipping away at the global oil industry's largest debt load.

The company's total debt stood at $113.84 billion dollars as of June 30, down from $115.12 billion at the end of the first quarter.

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Its revenue fell 6.1% to 67 billion reais, driven by lower fuel sales in the domestic market, where demand remains subdued after Brazil's worst recession on record.

Earnings before interest, taxes, depreciation and amortization fell 6.6% to 19.09 billion reais.

Write to Paul Kiernan at paul.kiernan@wsj.com

(END) Dow Jones Newswires

August 10, 2017 19:38 ET (23:38 GMT)