BRASILIA: Brazil’s state-controlled oil company saw its earnings surge in the second quarter, thanks to a rally in crude prices and a hydropower crunch in Brazil that boosted electricity demand.
Since late last year, Petrobras has sold more fuel oil domestically and increased output at its own thermal power plants, part of a wider policy in Brazil to conserve water levels at hydroelectric dams and avert power outages. Though the power division at Petroleo Brasileiro SA, as the company is formally known, represents a fraction of overall revenue, it was a standout.
Electricity generation more than tripled in the second quarter from a year ago.
Petrobras also got a boost from this year’s oil-price rebound, which has delivered robust earnings to energy giants, many of which are printing as much profit as before the pandemic.
As a result, many of Petrobras’s US and European peers have been using the cash to boost dividends and slash debt.
It’s a stunning turnaround for an industry that was on the ropes a year ago amid a pandemic-induced price crash.
Petrobras reported 42.86 billion reais (US$8.3bil or RM35.06bil) of net income, reversing losses made in the second quarter of last year at the height of the Covid-19 crisis.
The strong results will allow the company to bring forward shareholder payouts of 31.6 billion reais (US$6.11bil or RM25.81bil) for this year, about three times the average that was distributed in the past three years
“Considering our prospects for earnings and for cashflow generation in 2021, we approved the anticipated distribution of dividends,” chief financial officer Rodrigo Araujo said in a recorded video for investors.
Output from the so-called pre-salt region that holds Petrobras’s largest and most profitable discoveries continues to expand.
A 180,000-barrel-a-day production vessel is expected to start this month and gradually ramp up at the Sepia field.
This and other new units allow Petrobras to continue boosting output at ultra-deep fields. — Bloomberg