PETR4 Petroleo Brasileiro S.A. Petrobras

By Jeffrey T. Lewis

SAO PAULO--Brazilian oil major Petroleo Brasileiro SA's (PETR3.BR) profit jumped in the third quarter from a year earlier, boosted by a rise in the price of oil.

Net income attributable to Petrobras shareholders reached 6.6 billion reais ($1.8 billion), soaring from BRL266 million in the third quarter of 2017, while sales revenue rose to BRL98.3 billion from BRL71.8 billion, the company said.

Adjusted earnings before interest, taxation, depreciation and amortization came to BRL29.9 billion compared with BRL19.2 billion a year earlier.

Petrobras agreed at the end of September to pay $853.2 million to Brazilian and U.S. authorities to end years-long investigations into corruption centered on the company. Excluding the settlement costs, Petrobras would have had a net income attributable to shareholders of BRL10.3 billion and adjusted Ebitda of BRL33.4 billion, the company said.

With uncertainty related to the graft probes mostly over, the company is looking forward to ramping up output from its offshore fields in the pre-salt area, so called because the oil deposits are located in deep water off the coast of Sao Paulo and Rio de Janeiro states, under the ocean floor, beneath thick layers of salt.

Petrobras has been increasing production from the pre-salt wells while at the same time cutting costs, which will keep operations profitable even if the price of oil falls much lower than it has recently, analysts say.

The company's "cost advantage in pre-salt is its big ace in the hole," said Gabriel Francisco, an analyst at XP Investimentos in Sao Paulo.

Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com

(END) Dow Jones Newswires

November 06, 2018 05:48 ET (10:48 GMT)

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