Petrobras Skimps on Dividend, Market Value Plummets By $14 Billion

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Brazil's state-run oil company, Petrobras, saw its shares crash on Friday after it skimped on its dividend, with the ramifications spilling beyond Petrobras and into the wider Brazilian stock market

Brazil’s state-run oil company, Petrobras, saw its shares crash on Friday after it skimped on its dividend, with the ramifications spilling beyond Petrobras and into the wider Brazilian stock market. Petrobras’ market value tumbled on Friday by $14 billion after the company’s fourth-quarter results—published on Thursday—disappointed investors with a reduced dividend. Investors and analysts had expected an extraordinary dividend between $3 and $4 billion for the quarter, on top of the $2.

1% for 2024—a figure that was “substantially below that of peers that typically deliver returns in the low teens,” JPMorgan wrote, according to Reuters. Other analysts jumped on the criticism wagon and downgraded Petrobras, including BofA, who said that the decision to scale back the dividends “heightens the risk perception at Petrobras, particularly on the government influence regarding major capital allocation decisions.

 

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