By Jeffrey T. Lewis
SÃO PAULO -- Petróleo Brasileiro SA, or Petrobras, said profit jumped in the second quarter after the oil company sold assets including a gas distribution unit.
Net income attributable to shareholders jumped 87% from the same period a year earlier to 18.87 billion reais ($4.92 billion), Petrobras said Thursday. Sales declined 3% to 72.57 billion reais and adjusted earnings before interest, taxes, depreciation and amortization increased 8.6% to 32.65 billion reais, Petrobras said.
Net income would have been 5.02 billion reais in the quarter without one-time items, and adjusted EBITDA would have been 33.4 billion reais, Petrobras said.
Petrobras has been working to sell off nonstrategic assets and pay down its debt. During the second quarter, the company sold its 90% stake in gas pipeline operator Transportadora Associada de Gas SA for 33.5 billion reais, and also sold a refinery in Texas while continuing the process of unloading other assets.
Petrobras said it used part of the proceeds from those sales to cut its debt, which was 80% dollar-denominated as of June 30. Net debt fell to $83.67 billion at the end of the second quarter, from $95.53 billion at the end of the first quarter, Petrobras said.
While the asset sales boosted Petrobras's bottom line, the focus of investors will be on the company's operations to judge how healthy its business is, according to Gabriel Francisco, an analyst at São Paulo-based brokerage XP Investimentos.
"The market is really looking at fundamentals right now," he said.
The company is also in the process of selling off older, less productive wells in order to focus on production in its offshore fields in the pre-salt area, where the deposits lie under salt layers that are themselves under the ocean's floor.
Petrobras is still ramping up production from the pre-salt area, and said last week that output from those fields increased nearly 13% from the first quarter. At the same time, production from post-salt offshore fields fell 4.1%, largely because of the closure of production on some platforms, and output from shallow water and onshore wells fell 10%.
"No one controls the price of oil, but the company controls its production numbers, so that's the emphasis of shareholders and analysts, " said Pavel Molchanov, an analyst at Raymond James.
The company also said last week it had cut its production target for the full year to 2.7 million barrels of oil equivalent per day, from 2.8 million barrels.
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