Brazil's Petrobras posts $9 billion profit as Bolsonaro rails against company

Gram Slattery and Roberto Samora
Thu, May 5, 2022,


RIO DE JANEIRO (Reuters) - Brazil's Petrobras posted a first-quarter net income that beat forecasts on Thursday, just minutes after Brazilian President Jair Bolsonaro railed against the state-run oil company's profitability, saying its executives had no sympathy for ordinary people.

In a securities filing, Petroleo Brasileiro SA, as the company is formally known, posted a quarterly net income of 44.56 billion reais ($8.86 billion), above a Refinitiv consensus estimate of 43.5 billion reais and almost 40 times greater than the same quarter last year.

Earnings before interest, taxes, depreciation and amortization, or EBITDA, came in at 77.71 billion reais, slightly above the Refinitiv estimate of 76.3 billion reais.

In comments accompanying the results, Petrobras attributed the profit jump to factors including high Brent crude oil prices, wider margins in its diesel business and reduced liquefied natural gas imports. It noted that its divestment program had slowed from the previous quarter.

The first-quarter results, however, were largely overshadowed by comments made by Bolsonaro during a weekly broadcast on multiple social media platforms, just minutes before the results were published.

In a particularly free-wheeling address, he said Petrobras was committing a "crime" and a "rape" against Brazil by posting bumper profits, while squeezing Brazilian consumers at the gas pump.

The far-right Bolsonaro said he would not interfere with Petrobras' operations, but implored the company not to raise fuel prices any further.

Bolsonaro faces a tough fight in his bid for a second term as president in the October election and has been trailing the left-wing former President Luiz Inacio Lula da Silva in opinion surveys.

Petrobras has a policy of pegging domestic fuel prices to international rates, a policy which has come under fire as prices have skyrocketed amid the war in Ukraine.

In a statement accompanying Petrobras' results, Chief Executive José Mauro Coelho, who took the reins in April after his predecessor was fired amid a spat over domestic fuel prices, said the company was contributing to society though taxation and dividends.

"All of this generates economic development throughout the entire chain of production, creating employment, wealth and tax income for the nation," Coelho wrote.

"This quarter, we will pay to federal, state and municipal governments an amount equal to one and a half times our net income in taxes."

The company announced ordinary dividend payments of 3.715 reais per share early on Thursday. The government is by far its largest shareholder.

($1 = 5.03 reais)

(Reporting by Gram Slattery in Rio de Janeiro and Roberto Samora in Sao Paulo; editing by Richard Pullin and Leslie Adler)