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Business

Brazil’s Petrobras posts record loss

Brazil's state-run oil giant, Petrobras, has posted its biggest ever quarterly loss. The steep fall in oil prices hurt results, although earnings continue to be impacted by a massive corruption case.

Petrobras' net loss widened to $10.2 billion (9 billion euros) in the last quarter of 2015, the oil giant reported Tuesday, as it struggled to cope with tumbling oil prices. Last year alone the price of a barrel of crude fell more than 40 percent.

The shortfall was steeper than predicted and turned Petrobras' full-year result - which had remained in the black until September 2015 - into an overall loss.

"It was an extremely difficult year for the oil industry in general, " Petrobras CEO Aldemir Bendine said.

The public company also attributed its losses to downgrades by credit rating agencies and the devaluation of Brazil's currency, the real.

Scandal still eats into earnings

By its own admission, a massive price fixing and bribery scandal which reached the highest rungs of government also impacted Petrobras' results, although not to the same extent as last year.

A year earlier, writedowns related to the fallout from the expanding corruption case, which fuelled calls for the impeachment of Brazillian President Dilma Roussef, were the overriding cause of the group's losses.

Roussef headed up the board of Petrobras from 2003 to 2010 when much of the corruption took place. She denies any involvement.

A former president,

Luiz Inacio Lula da Silva, is also under investigation

in connection to the allegations.

Economic woes deepen

Brazil is currently experiencing the worst economic recession in decades, which has severely impacted domestic demand for commodities including fuel products.

Petrobras' poor results will not help the country out of its weak economic situation: Brazil's biggest company and largest investor has been drastically cutting spending and laying off thousands in a bid to stay afloat.

In light of the results, CEO Bendine said that the company will not pay dividends to of any of its investors and employees will not receive bonuses.

hch/cjc (AFP, dpa, Reuters)

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