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Petrobras loses R$ 30 billion (USD 6B) in market value amid doubts about dividends.

Ignacio Teson•Thursday, February 29, 2024•1 min read

Preferred shares fell 5.16% on Thursday after the state-owned company’s president mentioned caution regarding dividend payments.

Petrobras lost nearly R$ 30 billion in market value this Thursday (29), with the decline of its shares following a statement from the state-owned company’s president, Jean Paul Prates, raising doubts among investors. In an interview with Bloomberg, Prates mentioned that Petrobras will exercise more caution in paying extraordinary dividends as it moves towards becoming a renewable energy powerhouse.

“We have to be more cautious. Shareholders will understand. We are in the midst of this big decision to transition into an oil company,” he stated.

The statement led investors to trade Petrobras shares among the most actively traded in Thursday’s session. Preferred shares (without voting rights) closed down 5.16% at R$ 40.43, while common shares (with voting rights) dropped 5.39% to R$ 41.60.

At the lowest point, preferred shares were traded at R$ 39.83 (-6.57%) and common shares were quoted at R$ 41.25 (-6.19%), among the worst performers of the Ibovespa, which fell 1.16%.

Petrobras announced early Wednesday evening that no decision has been made regarding the distribution of undeclared dividends. The company added that decisions by top management regarding dividends, including the proposal for allocation of earnings, to be submitted for approval at the ordinary general meeting on April 25, will be made based on its new remuneration policy.

Petrobras holds significant importance to Brazil due to its role as the country’s leading energy company and one of the largest contributors to the national economy. As a major producer and distributor of oil, Petrobras plays a crucial role in meeting Brazil’s energy demands, driving industrial growth, and supporting economic development.

Beyond its primary function in the energy sector, Petrobras also serves as a source of government revenue through taxes and royalties, funding essential public services and infrastructure projects.

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ABOUT THE AUTHOR See More
Ignacio Teson
Ignacio Teson
Economist and Financial Analyst
Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.
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