KEY POINTS
- Petrobras reports a 22 percent increase in net profit, totaling $5.7 billion.
- The company declares $3 billion in dividends for shareholders.
- Petrobras cuts 2024 investment forecast to $13.5-14.5 billion, down from $18.5 billion.
Brazil’s state-run oil company, Petrobras, has reported a 22 percent increase in third-quarter net profit and announced a dividend payout of $3 billion.
The firm’s net profit for the quarter ending in September reached 32.6 billion reais ($5.7 billion), surpassing expectations.
Strong profits, solid dividend announcement
Petrobras’ third-quarter performance showed strong revenue growth, with net sales increasing by 3.8 percent to 129.6 billion reais, exceeding analysts’ predictions of 125 billion reais.
However, its adjusted EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization) fell by 3.8 percent year on year to reach 63.7 billion reais. The result landed with the analysts’ expectations, though the level was low compared to the past.
The company’s board also declared a dividend payout of 17.12 billion reais ($3 billion), equivalent to 1.3282 reais per share. This move is part of Petrobras’ strategy to return value to shareholders, reflecting the firm’s strong financial position.
“We are committed to executing our strategic plan and delivering on our projects,” said Fernando Melgarejo, Petrobras’ Chief Financial Officer.
The company has spent about $4.5bn in the quarter; a rise of 31 percent from the same quarter in 2023. Most of the funds were devoted to the exploration and production of the products.
Lowered investment forecast and production challenges
Despite a solid profit report, Petrobras lowered its full-year investment forecast earlier this year. The company revised its expected 2024 investments to a range of $13.5 billion to $14.5 billion, down from an initial estimate of $18.5 billion. As of now, Petrobras has already invested about $10.9 billion in 2024.
According to Reuters, the company also reported a decline in its oil production during the third quarter. Petrobras’ output in Brazil fell by 8.2 percent year-on-year, reaching 2.13 million barrels per day, which is a significant decrease compared to the previous year’s production.
The decrease in oil output reflects a broader trend of challenges facing the global energy market, including shifting dynamics in supply chains and the impact of global inflation on operational costs.
Petrobras, however, remains focused on expanding its portfolio and boosting production through strategic investments.
Petrobras’ focus on future growth
Currently, Petrobras leadership has a positive managerial outlook regarding its firm outlook, with considerable expansionary plans for the exploratory and production segments.
Still, the company has been reducing its oil output in the areas, but it is meant for future gains in these sectors. An assurance of the payment of a $3 billion dividend assures stakeholders of improving their capital without compromising the caliber of the firm’s current market.
From the present period onwards, the company aims on the improvement of the exploration and the management of the portfolio to sustain the stability. Although the leadership of the company has been more carefully tracking near-term production declines, it has stayed firm on this position.
