Brazilian oil giant Petrobras lost 26.6 billion reais ($8.8 billion) in the fourth quarter after taking a write-down of 50.8 billion reais ($16.8 billion) due to corruption and other disruptions, the company said on Wednesday, according to Reuters.
Write-downs linked to a corruption scandal amounted to 6.19 billion reais (about $2 billion), while remaining losses came from cost overruns at refineries and oil price pressures, among other factors, Reuters said.
U.S.-listed shares in Petrobras were choppy in extended trading after the company released heavily-anticipated audited fourth-quarter financials. Markets eyed the results for impairments to the company’s assets.
The delayed release was Petrobras’ first audited financial statement since August. It marked a key step for the state-controlled oil company’s future in international stock and credit markets and held implications maybe even for the future course of the world’s seventh-biggest economy.
“The audited results are likely to improve overall expectations and reduce the risk of further downgrade from credit rating agencies for the time being,” the Eurasia Group, a political consulting firm, wrote in a Wednesday note.
Petrobras is engulfed in what’s probably the largest financial scandal in Brazil’s history—a high bar, given the country’s record of corruption.
The scandal started with the arrest early last year of a company director, who subsequently struck a deal with prosecutors in September. Since then, details have emerged almost daily of a decade-long, alleged bribery scheme involving company officials.
The executive alleged to investigators that for nearly 10 years, Petrobras contracts were routinely padded by 3 percent, with the extra money used for bribes and kickbacks. Much of that money was supposedly funneled to the country’s ruling political parties.
If the earnings report is deemed credible by markets, the next step will be to convince investors that the company has a plan to establish a positive cash flow. Petrobras started a borrowing binge years before the price of oil began plunging in 2014, and it quickly became the most indebted company in the world.
Petrobras commands oil and gas reserves of about 13 billion barrels.
—CNBC’s Michelle Caruso-Cabrera contributed to this report.