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The Debt That Seemed Unpayable of Petrobras: In 2014, Expenses Reached Values of Around US$ 1.7 Billion Per Quarter; Significant Reduction Is a Demonstration of the Financial Rebalancing Process Achieved by the Brazilian Oil Giant
Petrobras informed the market, in a material fact, last Tuesday (11/16), that it is significantly reducing the amount with interest and charges of its financial debt. Expenses with these financings fell to US$ 669 million in Q3 2021, a figure about 31.1% lower than the US$ 971 million spent in Q3 2020. When comparing the first nine months of 2021 with the same period last year, the reduction achieved was also significant: a drop of approximately US$ 2.8 billion to about US$ 2.3 billion, a reduction of 17.9%.
See Also
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- Petrobras and Shell Brazil Enter the Competition for the Second Round of the Productive Transfer Which Will Offer the Areas of Sépia and Atapu of the Pre-Salt
For Many, the Debt Seemed Unpayable. Reduction of Debt Service Spending Is Yet Another Demonstration of the Financial Rebalancing Process Achieved by the Brazilian Oil Giant
“The reduction of debt service spending is yet another demonstration of the financial rebalancing process achieved by Petrobras. These refer to interest and charges related to the loans the company contracted, amounts that were being forwarded to creditors. Now, part of these resources are available for allocation in profitable projects that generate value for the company or to be distributed to shareholders, with Brazilian society being the biggest beneficiary, receiving about 37% of the returned amounts, which adds to the nearly R$ 180 billion in taxes we expect to pay in 2021,” emphasizes Rodrigo Araujo, Chief Financial Officer and Investor Relations Director.
In 2014, Petrobras Had a Debt of Over 160 Billion Dollars
The decrease in expenses with interest and charges is yet another reflection of the significant drop in the total amount of Petrobras’ debt. In 2014, these expenses reached values of around US$ 1.7 billion per quarter solely in financing costs, and the total amount of its debt exceeded US$ 130 billion, or over US$ 160 billion when including the charters of oil platforms and other assets that started being considered as debt starting in 2019 with the adoption of IFRS 16 (Leases).
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For many, this debt seemed unpayable. Petrobras, however, set a target to reduce its total gross debt (financings and leases) to US$ 60 billion, an amount considered healthy for a company like Petrobras, by the end of 2022. Recently, in the results for Q3 2021, Petrobras reported that it reduced its gross debt to US$ 59.6 billion, thus achieving the stipulated target more than a year in advance.
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