Brazil's Petrobras Posts Loss Following Settlement Charges -- Update

By Jeffrey T. Lewis and Luciana Magalhaes 

SÃO PAULO -- Brazilian state-controlled oil company Petróleo Brasileiro SA, or Petrobras, said Thursday it posted a net loss in the fourth quarter and in 2017 as the state-controlled oil company continues to suffer from the side effects of the Car Wash corruption scandal.

The company had a loss of 5.5 billion reais ($1.7 million) in the last three months of 2017, the Rio de Janeiro-based company said. For the full year, Petrobras reported a net loss of 446 million reais.

Petrobras said it would have had a net profit of 7.1 billion reais in 2017 without the extraordinary payments, including a settlement of $3.4 billion to end a class-action suit in the U.S.

Petrobras is recovering from the damage done by the corruption scheme known as Car Wash, in which suppliers overcharged it and funneled part of the money to politicians and their parties. Petrobras in 2015 wrote off 6.2 billion reais due to the graft and another 44.6 billion reais for overvalued assets, including refineries, because of the scam.

The company announced at the start of this year an agreement to settle the class-action suit filed by disgruntled shareholders, who calculated the corruption scheme helped erase about $271 billion, or almost 90%, billion from Petrobras's market value between 2009 and 2015.

The company said it also agreed last year to settle a 10.4 billion-real debt with the Brazilian government.

Petrobras said it cut its net debt to $84.9 billion at the end of 2017, the lowest level for the figure since 2012, lengthened the average life of the debt to 8.6 years from 7.5 years and reduced the average interest rate to 5.9% from 6.2%.

Write to Jeffrey T. Lewis at [e-mail] and Luciana Magalhaes at [e-mail]

(END) Dow Jones Newswires

March 15, 2018 09:18 ET (13:18 GMT)

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