Company Trend Analysis - Petrobras - Q4 2017 - NOV 2017

BMI View : Favourable H117 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 August 11, Brazilian national oil company (NOC) Petrobras posted a BRL4.8bn (USD1.5bn) profit over H117. This represents a significant y-o-y recovery from a BRL0.9bn loss over H116 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 H117 results suffered from a weaker Q2, we believe continued efforts to reduce development costs and boost output will yield further upside momentum over the remainder of 2017 ( see ' Petrobras: Turning A Corner, But Challenges Remain ', September 23 2016).

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

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