Petrobras' (PBR) Q2 Results Viewed as In-Line at Deutsche Bank

Deutsche Bank maintained a Hold rating on Petrobras (NYSE: PBR) with a price target of $12.10. Analyst Alexander Burgansky characterized Q2 results as in-line.

"Revenues of BRL 79.9bn exceeded our estimates by 5% mostly as a result of much higher than expected crude exports, following a sell-off in inventories. This had a similarly positive impact on EBITDA (BRL 18.5bn), which was 6% ahead of our estimates and 4% ahead of Valor consensus. Stronger operational performance (both lifting and refining costs were down 4% and 7% QoQin $-terms, respectively) was offset by BRL 3.2bn higher tax costs, following recentsettlement of contingent liabilities with the Brazilian government. Net income further suffered from higher financial expenses (following lower level of capitalized interest costs and higher debts) and a bigger than expected forex loss, resulting in disappointing net income of BRL 531mn, 79% below our forecast and down 89% YoY," said Burgansky.

"Operating cash flow surprised by a BRL 5.9bn gain (lower tax payments as Petrobras took advantage of tax loss carryforwards when settling tax contingencies), resulting in positive FCF of BRL 5.7bn after an in-line capex of $6.0bn. The company’s Net Debt/EBITDA ratio stood at 4.64 as of quarter-end – a ratio that we expect should increase in 3Q15 following a sharp reduction in both crude prices and BRL in the recent weeks," added the analyst.

For an analyst ratings summary and ratings history on Petrobras click here. For more ratings news on Petrobras click here.

Shares of Petrobras closed at $6.49 yesterday.

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