Brazil’s state-controlled oil producer, Petrobras, has reported weaker-than-expected results and announced a dividend cut, a move that has disappointed investors. The decision follows a period where lower oil prices have offset the benefits of stronger production figures. Petrobras, formally known as Petroleo Brasileiro, is a major player in the oil and gas industry, focusing on exploration, production, refining, and distribution. The company operates primarily in Brazil and is known for its deep-water oil exploration expertise.
Petrobras increased its investments by 30.6 per cent year-on-year, reaching $US4.4 billion. This also represents a 9 per cent increase from the previous quarter as the company continues to develop its massive deep-water oil fields. However, investors have been closely watching Petrobras, hoping the company would contain capital expenditure to preserve shareholder payouts. Chief executive Magda Chambriard has stated the company will tighten spending to navigate the challenges presented by lower oil prices while still expanding production.
The company attributed the weaker results to one-off events, including asset impairments and labour agreements. Adjusted earnings before interest, taxes, depreciation and amortisation totalled 52.3 billion reais ($14.8 billion), falling short of the estimated 56.9 billion reais. Petrobras announced it would pay $US1.6 billion in second-quarter dividends and interest on capital, according to a filing. This figure is significantly lower than the $US2.2 billion payout that analysts had forecast, based on an average of five analyst expectations reviewed by Bloomberg.
