Petroleo Brasileiro SA Petrobras (ADR)(NYSE:PBR) reported that the exchange rate environment was better compared to the same quarter, a year earlier. In terms of Brent, the company posted a jump in 2Q2016 compared to 1Q2016 averaging at $46 per barrel.
The performance
Petroleo Brasilerio reported that the gross results showed an increase of BRL22.2 billion. The major factor that resulted in this increase was the higher production of gas and oil, which resulted in an improvement in the exports of crude oil and oil products. There was a decline in the sales of gasoline though the total sales led to decline in power and gasoline. It was due to increased expenses and lower power generation.
The operating results showed a decline of 12% reduction compared to 1Q2016. This decline can be attributed to some non-recurring costs and expenses related with the voluntary incentive plan. Also, there was an impairment charge of BRL1.2 million due to the re-assessment of the new. The other factors include exploratory blocks and higher expenses due to low economies. The company is downsizing and it’s a development of BRL2.2 million.
The highlights
Petroleo Brasilerio reported that in 2Q2016, there was a 38% decline in finance costs due to dollar appreciation compared to the euro. The company added that in the present scenario their highest net exposure is in U.S. dollar terms compared to euro. It is the prime reason the company was able to record decline in finance expenses.
When this improvement is compared to the performance in the first semester of this year, the depreciation resulted in increased finance costs. In net result terms, Petroleo Brasilerio witnessed a reversal in growth losses, when compared to the same period, a year earlier. This decline can be attributed to better bet financial performance and lower expense, which more than balances this decline in operating results.
