Petrobras To Give $8.5bn in Dividends as Payout Sustainability Doubts Arise

Petrobras‘ board approved a dividend of $8.5bn during the quarter after its Q3 results where it reported a net profit of $8.8bn, up 48% YoY. Its revenues grew 39% YoY to $32.4bn. While its dividends were lower than the prior quarter’s $17bn payout, its dividend payout this year (currently at $35.2bn) have already exceeded last year’s record of around $20bn. Leonardo Rufino, a PM at Mantaro Capital said, “It’s almost impossible for Petrobras to sustain payouts to holders at these levels”. Meanwhile the payouts have been a politically contentious talking point with Gleisi Hoffmann, the president of Lula’s Workers’s Party saying, “The bloodshed has returned to Petrobras. We don’t agree with this policy that takes away the company’s capacity to invest and only enriches shareholders”. Petrobras has mentioned that its dividends are compatible with its financial sustainability in the short, medium and long terms. Petrobras’ net debt stood at $47.5bn, almost flat YoY with free cash flows improving 12% YoY to $10.2bn.

Its dollar bonds were trading weaker with its 5.6% 2031s down 0.6 points to 90.83, yielding 7.1%.