Brazil's Petrobras beats profit expectations as uncertainty looms

The logo of Brazil's state-run Petrobras oil company is seen on a tank in at Petrobras Paulinia refinery in Paulinia
The logo of Brazil's state-run Petrobras oil company is seen on a tank in at Petrobras Paulinia refinery in Paulinia, Brazil July 1, 2017. REUTERS/Paulo Whitaker/File Photo

SAO PAULO, Nov 3 (Reuters) - Brazil's state-run oil firm Petrobras (PETR4.SA) on Thursday posted a stronger than expected 48% surge in third-quarter profit, the latest in a string of stellar quarters under market-friendly managers whose days may be numbered.

Petroleo Brasileiro SA, as it is formally known, reported net profit of 46.1 billion reais ($9.01 billion) or 3.56 reais a share, beating the Refinitiv forecast of 3.52 reais per share,

As with U.S. giants Exxon Mobil (XOM.N) and Chevron (CVX.N), which have posted vast profits for this quarter, Petrobras' bottom line was boosted by surging fuel and natural gas prices following Russia's invasion of Ukraine.

The average price of Brent crude over July to September was $100.85, Petrobras said, significantly higher than the $73.47 it recorded a year earlier.

In recent years under a management team installed by economic advisers to outgoing Brazilian President Jair Bolsonaro, Petrobras has streamlined its operations to focus on more profitable assets, mainly in the oil formation known as pre-salt on Brazil's southwest coast.

However, with leftist Luiz Inacio Lula da Silva winning a presidential election runoff on Sunday and a change in its management expected early next year, the firm's future looks uncertain.

Since Lula's election, Petrobras' preferred shares have fallen by about 8%. The stock is down about a fifth from its high this year.

Earlier on Thursday, Petrobras had said it would distribute some 43.68 billion reais ($8.5 billion) in dividends. The company's huge payouts have prompted critics to argue it is underinvesting in its core business.

Petrobras' revenue jumped 40% to 170.08 billion reais. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 50.5% to 91.42 billion reais, also beating analysts' estimate of 88 billion reais.

"These results demonstrate, once again, the high level of performance achieved by Petrobras," its chief executive Caio Paes de Andrade said in a statement.

"With capital discipline, investing in resilient assets with adequate rates of return, the company has been able to present performance in a sustainable manner," he said.

($1 = 5.1160 reais)

Reporting by Peter Frontini; Editing by Christian Plumb and Cynthia Osterman

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