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Petrobras (PBR) to Drop $1.1-B Braskem Divestment Plan?
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Per reports, Petróleo Brasileiro S.A. or Petrobras (PBR - Free Report) may abandon its plans to divest stakes in Brazilian petrochemical company, Braskem SA. In 2016, Petrobras had announced to offload its 36% interest in Braskem for $1.1 billion, in a bid to reduce its huge debt. Notably, Petrobras had been hit hard by the industry downturn and loss of goodwill, owing to the massive corruption scandal.
However, the situation has relatively eased for this state-owned Brazilian giant as of now. The company reaped the benefits of high crude prices, which have boosted its earnings. In fact, in the last reported quarter, Petrobras posted its best quarterly results since 2011, courtesy of crude price rally.
It also emerged from the multibillion-dollar money laundering and bribery case, settling all the claims against it. The company is entering into various strategic partnerships with foreign oil giants to drive exploration momentum. In this regard, Petrobras has inked deals with major players like TOTAL S.A. , Royal Dutch Shell plc and Equinor (EQNR - Free Report) .
The company is presently concentrating on improving its liquidity and operational performance. Petrobras’ successful cost-cut initiatives and aggressive divestment programs have helped it in its endeavor to trim the debt load. At the end of June 2018, the company had a net debt of $73,662 million, decreasing from $84,871 million at the end of 2017 and $96,381 million as of Dec 31, 2016.
Its net debt-to-capitalization ratio at the end of the first half of the year was approximately 50%, down from 51% six months ago. Notably, Petrobras targets in achieving net-debt-to-adjusted earnings before interest, tax, depreciation and amortization (EBITDA) ratio of 2.5 in 2018, which was as high as 5.3 in 2015.
With the company being confident of achieving its leverage target for 2018 without the divestment of interests in Braskem, Petrobras finds it prudent enough to retain stakes in the petrochemical company as of now. In fact, it also intends to double its stake in Braskem, as it reduces Petrobras’ exposure to commodity price fluctuations and acts as a natural hedge for oil prices. Petrobras currently sports a Zacks Rank #1 (Strong Buy). You can seethe complete list of today’s Zacks #1 Rank stocks here.
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Petrobras (PBR) to Drop $1.1-B Braskem Divestment Plan?
Per reports, Petróleo Brasileiro S.A. or Petrobras (PBR - Free Report) may abandon its plans to divest stakes in Brazilian petrochemical company, Braskem SA. In 2016, Petrobras had announced to offload its 36% interest in Braskem for $1.1 billion, in a bid to reduce its huge debt. Notably, Petrobras had been hit hard by the industry downturn and loss of goodwill, owing to the massive corruption scandal.
However, the situation has relatively eased for this state-owned Brazilian giant as of now. The company reaped the benefits of high crude prices, which have boosted its earnings. In fact, in the last reported quarter, Petrobras posted its best quarterly results since 2011, courtesy of crude price rally.
It also emerged from the multibillion-dollar money laundering and bribery case, settling all the claims against it. The company is entering into various strategic partnerships with foreign oil giants to drive exploration momentum. In this regard, Petrobras has inked deals with major players like TOTAL S.A. , Royal Dutch Shell plc and Equinor (EQNR - Free Report) .
The company is presently concentrating on improving its liquidity and operational performance. Petrobras’ successful cost-cut initiatives and aggressive divestment programs have helped it in its endeavor to trim the debt load. At the end of June 2018, the company had a net debt of $73,662 million, decreasing from $84,871 million at the end of 2017 and $96,381 million as of Dec 31, 2016.
Its net debt-to-capitalization ratio at the end of the first half of the year was approximately 50%, down from 51% six months ago. Notably, Petrobras targets in achieving net-debt-to-adjusted earnings before interest, tax, depreciation and amortization (EBITDA) ratio of 2.5 in 2018, which was as high as 5.3 in 2015.
With the company being confident of achieving its leverage target for 2018 without the divestment of interests in Braskem, Petrobras finds it prudent enough to retain stakes in the petrochemical company as of now. In fact, it also intends to double its stake in Braskem, as it reduces Petrobras’ exposure to commodity price fluctuations and acts as a natural hedge for oil prices. Petrobras currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Petroleo Brasileiro S.A.- Petrobras Price
Petroleo Brasileiro S.A.- Petrobras Price | Petroleo Brasileiro S.A.- Petrobras Quote
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Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
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