Company Trend Analysis - Petrobras - Q1 2018 - JAN 2018

BMI View : Improving results affirm the gradual recovery currently underway at Petrobras. Though the company will face continued headwinds, further deleveraging and operating improvements will boost investor confidence in the company over the coming year.

On November 14, Brazilian national oil company (NOC) Petrobras posted a BRL5bn profit through 9M17. This represents a significant y-o-y recovery from a BRL17.3bn loss over 9M16, which was largely due to a 91% y-o-y increase in operating income from a stronger domestic currency, higher crude prices and reduced workforce expenses.

Petrobras' more positive results underline our view regarding the company's gradual turnaround. Though 9M17 results suffered from a weaker Q2 and Q3, we believe continued efforts to reduce development costs and boost output will yield further upside momentum into 2018.

Further Improvement Ahead
Petrobras - Net Income (BRLbn)
Source: Petrobras

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