Despite reporting worse-than-expected results last year, Petrobras is doing well in terms of cash flow, thanks to asset divesture and cost-cutting measures. Its free cash flow (FCF) at the end of June 2016 totaled at $3.07 billion, up from $1.87 billion at the end of June 30, 2015, while cash balance and cash equivalents stood at $19.61 billion.
The commodity market crash in June 2014 forced many companies to adopt cost-cutting measures to preserve cash and bolster their balance sheets. Petrobras slashed its capital investment by 38% in 2015. It also suspended dividends and is looking to cut jobs.
Despite difficult market conditions, the company was able to trim its gross indebtedness by 2% to $123.92 billion from US$126.26 billion as at December 31, 2015. At the end of the second quarter, the company reported total liabilities at $169.18 billion and liabilities on assets, classified as held for sale, at $26.07 billion.
-Petroleo Brasileiro SA - Petrobras's buy rating reiterated at Morgan Stanley.
PBR $8.81 (0.14) - 1.61%
