State-controlled oil giant Petrobras said it posted net income of 21.18 billion reais ($10.61 billion) in 2012, down 36 percent from the prior year.
Profits in the fourth quarter, however, hit 7.74 billion reais ($3.88 billion), up 53 percent from the same period in 2011, thanks to improved financial results.
The company's sharp drop in profits last year was caused by fuel prices that are out of step with the market, an increase in imports and the appreciation of the dollar against the real, Petrobras CEO Maria das Graças Foster said Tuesday.
"The drop in the company's profits to their lowest level since 2004 can be explained by the rise in imports of derivatives and a reduction in profit margins from marketing due to prices that are out of line," Foster said in a teleconference with investors.
Lower production due to technical problems and strong fuel demand in Brazil forced Petrobras to increase its imports of petroleum derivatives from 749 million barrels per day (bpd) in 2011 to 779 million bpd in 2012, Foster said.
Gasoline imports soared 112 percent, the Petrobras CEO said.
Petrobras's exports, meanwhile, fell 13 percent to 548 million bpd, leaving the company with a deficit that rose from 118 million bpd in 2011 to 231 million bpd last year. EFE