RIO DE JANEIRO—Brazilian state-run oil firm Petroleo Brasileiro SA on July 30 posted a loss of 2.7 billion reais ($524 million) in the second quarter, hurt by tumbling oil prices despite record export volumes to China.
The result, down from a record quarterly profit of 18.9 billion reais a year ago, came as the company pursued an aggressive volume-over-cents strategy to drive sales as crude prices slumped, hitting multi-decade lows in April.
In a securities filing, Petrobras, as the firm is known, said its cash generation, or EBITDA, was 24.99 billion reais in the April to June quarter.
This was ahead of a Refinitiv consensus estimate of 20.9 billion reais, but the figure was boosted by major non-recurring items, namely a court victory in a major tax dispute, the company said. Without one-off items, EBITDA would have come in at 17.7 billion reais, it said.
The swing to a loss illustrates how record exports by Petrobras and fairly steady production levels were not enough to insulate the Rio de Janeiro-based company from the far-reaching effects of the novel coronavirus on the oil industry.
“Brent prices of $65 per barrel in February tumbled to $19 per barrel in April 2020 due to a 25% contraction in global demand, threatening a sudden halt to cash flow,” Petrobras CEO Roberto Castello Branco said in a letter to investors.
Crude inventories built in the first quarter of the year were sold at a discount in the second quarter, contributing to 1.1 billion reais in losses, the company said.
Exports hit a record in terms of volume in April, with more than 1 million barrels a day sold. China was the destination of 87% of the oil.
As demand for fuel plummeted, Petrobras strived to place its products in a bid to avoid costly production halts amid a ramp-up plan at highly productive deep-water fields, but revenue figures show it exported at thin margins.
Petrobras sales revenue fell more 44% compared to the second quarter of 2019, to 27.7 billion reais.
U.S. energy firms cut the number of oil and gas rigs over the past week to a record low for a 14th week even as higher oil prices prompt some producers to start drilling again.
The move comes as the November presidential election looms and the Trump administration aims to complete several more deregulatory actions on the spring Unifed Agenda, a list of its policy priorities.
The U.S. oil and gas rig count fell by four to an all-time low of 247 in the week to Aug. 7, according to data from energy services firm Baker Hughes Co.