Petrobras Cuts Payout to $1.6B after Shock Loss

Petrobras introduced 9.1 billion reais ($1.6 billion) in dividends on Wednesday that trailed estimates after a shock loss within the fourth quarter.

The payout fell in need of anticipated dividends of $2.8 billion, the common of 5 analyst estimates reviewed by Bloomberg. The Brazilian oil producer has joined different majors together with Exxon Mobil Corp. and Chevron Corp. who continued to reward shareholders regardless that free money circulate has turn out to be strained at present oil costs. 

The Rio de Janeiro-based producer reported a internet lack of 17 billion reais ($2.9 billion) within the fourth quarter attributable to “unique occasions” together with the accounting impression of a pointy forex devaluation, it mentioned in a submitting. With out the one-off occasions internet revenue would have been 17.7 billion reais, it mentioned.

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The dividend fell by about half from the earlier quarter in a disappointment to traders. Petrobras has been a money cow regardless of political assaults on its dividend coverage at first of President Luiz Inacio Lula da Silva’s time period. 

“Petrobras’ ends in 2024 had been impacted primarily by an merchandise of an accounting nature,” Chief Monetary Officer Fernando Melgarejo mentioned within the submitting, the place he cited “the change charge variation in money owed between Petrobras and its subsidiaries overseas.” 

Analysts had been anticipating 18.35 billion reais in internet revenue, in accordance Bloomberg consensus. Brazil’s actual was the worst performing main forex in 2024. Adjusted earnings earlier than curiosity, taxes, depreciation and amortization, or Ebitda, was 41 billion reais, trailing the 61.9 billion-reais estimate. 

Petrobras’ American depositary receipts had been down 3.6 % in after-hours buying and selling.

About 83 % of analysts presently suggest shopping for Petrobras, in contrast with 39 % when CEO Magda Chambriard started her time period final 12 months final Could, in line with Bloomberg information. The payouts have additionally helped shore up the funds of the federal authorities, Petrobras’s controlling shareholder. Petrobras made 103 billion reais in dividend funds in 2024, it mentioned.

Petroleo Brasileiro SA, as it’s formally identified, reported earlier this month a decline in oil and fuel manufacturing and weaker gross sales and exports throughout the quarter. Upkeep-related stoppages at offshore platforms and pure declines at mature fields prompted the drop in output. 

The corporate’s success at reversing its manufacturing decline will have an effect on international oil provides at a time when OPEC and its allies try to gauge once they can begin unwinding output cuts. After lackluster manufacturing at Petrobras in 2024, and a few drilling setbacks throughout the first quarter, output is anticipated to start out rising once more in 2025 on the large deep-water tasks which have made Brazil a big supply of non-OPEC exports. The corporate expects manufacturing to extend 100,000 barrels a day on common this 12 months. 

Buyers proceed to trace the tempo of investments at Petrobras, together with acquisitions and investments in less-profitable renewables tasks. Whereas the spending hasn’t picked up but, there may be concern that renewables investments might erode Petrobras’s potential to pay dividends. 

In a message to traders, Chambriard vowed to replenish oil and fuel reserves and pursue a “worthwhile diversification” of its portfolio. Petrobras’s prime boss mentioned the corporate is making progress at learning partnerships with main gamers for the manufacturing of ethanol.  

A January enhance in diesel costs despatched a optimistic sign to traders who had been involved concerning the firm subsidizing gas to assist the federal government include inflation. 

Chambriard has mentioned Petrobras will proceed to return money to shareholders so long as it doesn’t damage its monetary well being and talent to take a position. She has vowed to “step on the accelerator” with investments in oil gear and companies, corresponding to increasing a fleet of help vessels and increasing refining capability. The oil producer spent $16.6 billion a 31 % enhance in comparison with 2023. 

The chief govt has appeared with Lula to announce infrastructure investments and is clearly dedicated to assist the federal government develop the financial system. Analysts have expressed concern that the corporate might come below political strain forward of the 2026 presidential election, making its shares extra unstable.