Petrobras (PETR4) Should Pay Over R$100 Billion in Dividend, Citi Says By Investing.com

Written by Marianne Pym and Jessica Bahia Milo

Investing.com — Petrobras is expected to pay shareholders more than R$100 billion in dividends in 2023 and another R$84 billion in 2024, according to projections released Monday (4) by Citibank. The financial institution factored in estimates of the federal government’s dividend income for its stake in the company.

“We believe the company will remain focused on its current dividend policy and there may be potential additional dividends, depending on the cash and leverage situation at the end of the year, and depending on the CARF decision. If there are indeed additional dividends, that may be approved on February 24, but “CARF risk” may continue to influence PBR’s upward dividend risk story,” say the bank’s analysts.

At 12:20 am (Brasilia time), common shares (BVMF:) were up 2.44%, at R$36.06, while preferred shares (BVMF:) were up 1.73%, at R$32.84.

Petrobras is out of the rating

Petrobras (BVMF:), the world’s largest payer last year, recorded the largest dividend cut in the second quarter of this year and left the list of top 10 dividend payers in the 39th edition of the Janus Henderson Global Earnings Index.

In Brazil, it was a seasonally quiet quarter for Brazilian earnings, with “an underlying decline of 53% primarily reflecting a cut by Petrobras,” according to a JHGDI report. The total annual distributions amounted to $4.3 billion in the second quarter of this year, compared to $7.7 billion in the same period of 2022.

Looking at emerging markets, banks increased payments by half in the year-on-year comparison, a positive effect that could have been “offset by much lower earnings, especially in Brazil and Colombia”. In total, the annual values ​​reached 45.2 billion US dollars, up 1.9% compared to the second quarter of 2022.

Dividends at the international level

Worldwide profits added up to $568.1 billion, a nominal increase of 4.9% in the same comparison. According to the document, the data shows strong profitability of companies in the financial sector over the past year.

According to the report, the highlight of this period was Europe, excluding the United Kingdom, which delivered a new record of dividend payments, with a value of $184.5 billion, with momentum from the banking and auto sectors.

The world’s largest dividend payers this year are: Nestlé (SIX:), HSBC (LON:), Mercedes-Benz Group (ETR:), China Mobile (HK:), Bayerische Motoren Werke (ETR:), The National Bank of Paris Paribas (EPA:), Microsoft (NASDAQ:), Allianz (ETR:), Sanofi (EPA:) and AXA (BIT:).

The international forecast for this year is a dividend of $1.64 trillion, an increase of 5.0%.