Petrobras earnings slide continues in Brazil

[RIO DE JANEIRO] Brazil's state oil company Petrobras reported a first-quarter loss of US$318 million Thursday, extending its streak in the red after the worst year in its history.

The result, which was worse than market expectations, came on the same day president Dilma Rousseff was suspended by the Senate pending an impeachment trial.

She was felled partly by a wide-reaching scandal at Petrobras that has upended the business and political worlds in Brazil.

The company said rising interest payments and falling production and sales had hit its bottom line.

Petrobras is coming off a rough 2015 in which it lost US$9.6 billion, its second year in the red and worst performance since its founding in 1953.

Anti-corruption investigators have uncovered a massive fraud scheme in which Petrobras executives colluded with contractors to embezzle more than US$2 billion from the company over the course of a decade, bribing politicians and political parties along the way.

Ms Rousseff has not been implicated in the scheme, but she was chair of the Petrobras board during much of the period under investigation.

The company has also been hit hard by the collapse in global oil prices and a deep recession in Brazil.

Acting president Michel Temer vowed Thursday to improve the business environment and revive the economy.

Petrobras is cutting back investments and expenses in a bid to get its books back in order. It slashed investment by 25 per cent in the first quarter, it said.

AFP