Brazil's Petrobras shares dive as late results released

SAO PAULO – Shares of Petrobras tumbled more than 10 percent Wednesday after long-delayed earnings results were published without including promised figures on losses to corruption at the scandal-racked oil giant.

Brazil’s state-run oil company released third-quarter results for 2014 that were initially expected in November but delayed after auditors from PricewaterhouseCoopers refused to sign off on the figures.

Wednesday's results were delivered unaudited, as the company sought to minimize financial repercussions of further delaying the figures.

The results showed profits fell 9 percent year-on-year, and 38 percent form the previous quarter, to $1.2 billion (3.1 billion reais).

To the dismay of investors and contrary to previous announcements, however, the company report did not factor in losses suffered as a result of a multibillion-dollar corruption scandal.

Petrobras shares on the Bovespa stock exchange had fallen 10.91 percent at 1 p.m. in São Paulo (GMT1500); company shares in the U.S. have also been impacted. The exchange's key index, the Ibovespa, also fell sharply when it opened Wednesday morning and was still down by more than 2 percent at 1 p.m.

The country’s largest company is at the center of Operation Car Wash, set up to investigate a vast corruption scheme in which company executives, contractors and senior politicians are alleged to have bloated third-party contracts, taken bribes and laundered the proceeds.

Petrobras Chief Executive Maria das Graças Foster said Wednesday that the company had concluded it was "impracticable to quantify exactly" the funds illegally diverted from Petrobras.

"(The) payments were made by external suppliers and cannot be tracked on the company's accounting books," Foster said in a statement sent to shareholders and investors as the results were published.

A rough estimate made by the company and reported by local media Tuesday put the losses at $34.3 billion (88.6 million reais), but Foster said the calculations were "inadequate."

Corruption allegations have severely damaged the company's once-envied reputation, as well as that of President Dilma Rousseff, who was a chairperson at Petrobras when part of the wrongdoing is alleged to have taken place. Rousseff has repeatedly denied all knowledge of the scheme but several members of the president’s Workers' Party have also become embroiled in the scandal.

Three former Petrobras executives and about 40 business figures from leading Brazilian companies have been arrested in recent months as part of the ongoing investigations.

The investigation began last March and by December, 23 companies had been named as under investigation by Federal Police.

The Folha de S.Paulo newspaper reported Wednesday that 10 more companies were now set to be investigated, including major construction company Andrade Gutierrez.

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