Possible Extra Dividends Ahead

Petrobras, Brazil’s state-run oil giant, might consider extraordinary dividends if the right opportunity arises, according to CFO Fernando Melgarejo during a recent call with investors. He hinted that while they’re not making any promises, 2024 could see some special payouts depending on their cash flow and ability to generate revenue.

Quarterly Results Fall Short

In a not-so-great twist, Petrobras recently reported a net loss of 2.6 billion reais (about $472 million) for the second quarter, disappointing many. The company also cut back on its investment projections, which has some analysts scratching their heads.

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Dividends Do Keep Coming

Despite those not-so-stellar earnings, Petrobras still managed to dish out dividends totaling a whopping 13.57 billion reais, tapping into a capital reserve of 6.4 billion reais to do so. It’s a bold move, but one that shows commitment to shareholders.

Analysts Feel Reassured

Investment firm Jefferies found the earnings call gave a “reassuring message.” They noted that despite some setbacks like maintenance shutdowns and environmental permits being hard to come by, production levels remain on track with company forecasts.

Adjustments in Spending

Petrobras’ shift in strategy has led to a reduction in their 2024 capital expenditure estimates, which they attribute to a change in focus regarding exploration and production, as well as delays in refining investments. Interestingly, Melgarejo mentioned that investment levels are expected to increase next year.

Market Reactions

If things go as planned, analysts from BTG believe that lowering the 2024 investment outlook could be a good sign for extraordinary dividends. Meanwhile, preferred shares of Petrobras saw some fluctuations, dipping nearly 3.4% in the morning before settling down by just 0.5% by early afternoon.

($1 = 5.5059 reais)