Petrobras plans shareholder payout
Brazilian energy company Petrobras reported October 28 that meeting its debt target meant it could return some of the realised value back to its shareholders.
“We reached our debt target much earlier than planned and we are sharing part of the wealth generated with society and our shareholders through taxes, dividends, job creation and investments,” said CEO Joaquim Silva e Luna. “We still want much more for our Petrobras and, therefore, we will continue to work diligently and rationally, investing responsibly in the most profitable assets to generate more and more prosperity”.
The company said it reached its $60bn gross debt target ahead of schedule. A high level of cash generation and solid liquidity led the company to approve a $6bn total payout to shareholders for 2021, which works out to be about $0.43/share.
The Brazilian national energy company is in the midst of a sweeping divestment programme aimed at paying down its debt and freeing up capital for deepwater offshore projects.
Free cash flow came in at $9bn, while capital spending of $6.1bn for the first nine months of the year marked a 2.2% increase from the same period last year. Net revenue for Q3 2021 was $23.3bn, an increase of 10.8% from the second quarter.
The company attributed its solid performance in the third quarter to higher commodity prices. Petrobras said about a quarter of its revenue growth came from natural gas.
“In terms of the composition of domestic market revenue, diesel and gasoline continued to be the main products, accounting together for 71% of oil products domestic sales revenues in 3Q21,” Petrobras stated.
Even with the strong performance, the company said it had inquired about recent reports the government was looking to sell off its controlling interest in the company.
The Reuters news service reported that Brazilian senate leader Fernando Bezerra confirmed that government officials were reviewing the possibility of privatising Petrobras through a share sale amid frustration over a Petrobras plan to increase the price for fuels.
Soaring fuel prices have been a source of frustration for the Brazilian government. As with global natural gas prices, road fuels are becoming increasingly expensive.
In February, Bolsonaro fired Petrobras CEO Roberto Castello Branco out of frustration with the company’s decision to hike fuel prices.