Petrobras cuts controversial dividend and buys back shares

(Bloomberg) — Politically controversial Petroleo Brasileiro SA lower its dividend after earnings plunged and Brazil’s oil main instituted a extra conservative coverage for shareholder funds.

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The Rio de Janeiro-based producers’ council permitted a dividend of 15 billion reais ($3 billion), in response to a doc Thursday. It’s lower than 24.7 billion riyals within the first quarter and is the bottom dividend since Petrobras started making funds on a quarterly foundation in the beginning of 2022. It would additionally purchase again as much as 157.8 million most popular shares over the subsequent 12 months, which is value 4.9 billion riyals at present costs.

It brings Petrobras funds in keeping with these made by different main oil producers. In 2022, Petrobras paid extra dividends than any oil firm besides the Saudi Arabian Oil Firm.

President Luiz Inacio Lula da Silva attacked Petrobras’ income as being too beneficiant to traders and mentioned income ought to be invested in oil refining and the vitality transition.

In the meantime, oil majors in Europe and america proceed to prioritize investor funds even after income fell from document lows final 12 months. Shell Plc, TotalEnergies SE, ExxonMobil Corp, BP Plc and Chevron Corp have all stored cash flowing to shareholders by dividends and share buybacks.

Learn extra: BP Caps Massive Oil Earnings Season With Focus On Money For Traders

Web earnings decreased by 47% to twenty-eight.8 billion riyals within the second quarter as a result of decrease oil costs, increased working prices, and a pointy decline within the worldwide crack unfold of diesel.

Petrobras lower the dividend to 45% of free money move, an announcement that got here as a reduction to many traders who had been anticipating decrease payouts beneath the brand new administration. The corporate stays dedicated to paying not less than $4 billion yearly, except complete debt rises above the bounds laid out in its marketing strategy. Analysts mentioned the brand new dividend pointers align Petrobras with its worldwide friends.

Learn extra: Petrobras shareholder promotes ‘materials’ on dividend coverage

(Updates together with the announcement of the share buyback within the second paragraph)

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