RIO DE JANEIRO: Brazil’s state-run oil company, Petroleo Brasileiro SA, said on Monday it expects to save about 10 billion reais (US$4.5 billion) by 2018 after one in eight employees agreed to quit under an early retirement plan.
Petrobras, as the company is known, said in a statement that 8,298 employees signed up for the plan and that their departure will cut labour costs by 13 billion reais over five years.
Petrobras will write off the 2.4 billion-real cost of the voluntary dismissal programme’s incentives in the first quarter, or almost 290,000 reais (US$129,000) per retiring employee. When 815 million reais of related tax credits are included, the programme will reduce earnings by 1.6-billion reais in the period, the company said. Petrobras plans to announce first quarter results May 9 after markets close.
"We expect a negative result essentially as a consequence of the provision," said Auro Rozenbaum, oil company analyst with Bradesco BBI Equity Research in Sao Paulo, adding that the provision should erase much of the impact of a fuel-price increase.
The Rio de Janeiro-based company turned to layoffs after other efforts to raise money or cut costs faltered. Its earnings have also come under pressure from the government, which forces the company to subsidise fuel costs by keeping domestic gasoline and diesel prices below world levels.
With cash tight, production stagnant and the government, its controlling shareholder, pressuring the company to complete a five-year, US$221 billion expansion programme, Petrobras’ debt has soared. Among the world’s largest oil companies, Petrobras debt levels are the highest and its profitability the lowest.
Petrobras preferred shares, the company’s most traded class of stock, fell 0.2 per cent to 17.57 reais on Monday, slipping back from Friday’s five-month high.
The employee departures are likely to impact the company’s oldest and most experienced workers. The company did little or no hiring in the 1990s and early 2000s, which will leave many of the workers who remain with more limited experience as the company moves ahead with one of the most complex, expensive and technically challenging offshore investment programmes.
The company said that the programme aims to retain knowledge necessary to Petrobras.
Petrobras said 55 per cent of the workers who have agreed to the programme will likely leave this year.
REUTERS
