Petrobras Q3 profit falls 39 pct, misses market outlook

October 25, 2013


By Jeb Blount and Sabrina Lorenzi

RIO DE JANEIRO, Oct 25 (Reuters) - Brazil's state-run oil company, Petrobras, said on Friday that third-quarter profit fell 39 percent as rising exploration and administrative costs drove up spending while fuel subsidies choked revenue growth.

The Rio de Janeiro-based company, formally known as Petroleo Brasileiro SA, said net income in the three months ending Sept. 30 was 3.40 billion reais, missing the average 5.84 billion real ($2.68 billion) estimate of 10 analysts surveyed by Reuters.

Net sales in the third quarter rose 5.3 percent to 77.7 billion reais, below the average analyst estimate of 78.7 billion reais. Net fuel and crude imports soared 57 percent during the quarter to 425,000 barrels a day.

Brazil's government has not allowed Petrobras to raise domestic fuel prices in line with international prices. Thus, imported fuel is sold at a loss.

Earnings before interest, taxes, depreciation and amortization (EBITDA) fell 8.9 percent to 13.09 billion reais in the quarter, short of the 15.6 billion real average estimate. EBITDA is a measure of a company's ability to generate cash and profit from operations.