Petrobras (PETR3; PETR4) has revealed its financial results for the fourth quarter of 2024, reporting a substantial net loss of R$ 17 billion. This stark loss contrasts sharply with the profit of R$ 31 billion recorded during the same period of the previous year, underscoring the challenges facing the Brazilian oil giant.
The poor financial performance was primarily attributed to several factors, including decreased oil production and fuel sales. Specifically, Petrobras experienced a 9.7% drop in sales revenue, totaling R$ 121.26 billion, alongside adjusted EBITDA which fell by 38.7% to R$ 40.96 billion. The company's production of oil also declined by 3%, averaging 2.7 million barrels of oil equivalent per day, largely due to scheduled maintenance on offshore platforms. This has raised concerns among investors who are eager to see the company rebound.
Adding to the financial burden, Petrobras had to manage a significant R$ 45 billion tax settlement, which contributed to the overall negative outlook for the corporation's annual performance. For 2024, Petrobras’ net income plummeted by 70.6%, dropping from R$ 124.6 billion in 2023 to R$ 36.6 billion this year. A reflection of these tough times, shares of Petrobras fell nearly 7% post-announcement, signaling investor unease.
Despite these setbacks, Petrobras’ leadership remains optimistic about future growth. CEO Magda Chambriard, alongside President Luiz Ignácio Lula da Silva, has emphasized the importance of continued investment as part of their strategy to boost the company's image as an industrial development engine for Brazil. Investments for 2024 reached US$ 16.6 billion, marking a 31% increase compared to the previous year, with significant allocations for projects related to Brazil's pre-salt oil fields.
Chambriard's commitment to accelerate investments is seen as aligning with the developmental vision of current government policies, focusing on generating employment and industrial growth. "The proposed distribution aligns with the Policy of Remuneration to Shareholders, ensuring sustainability and financial health," the board noted. This policy stipulates distributing 45% of the company's free cash flow to shareholders, provided gross debt remains within set strategic limits.
To this end, Petrobras has proposed distributing R$ 9.1 billion in dividends for the year, which requires approval during the General Ordinary Assembly (AGO) scheduled for April 16, 2025. If ratified, the dividend payout will be comprehensive, totaling R$ 75.8 billion when accounting for past anticipations, with R$ 73.9 billion coming from dividends and interest on equity (JCP), and R$ 1.9 billion from share repurchases.
Specifically, shareholders can expect two dividend payments scheduled for May and June 2025. The first installment will amount to R$ 0.35477261 per ordinary and preferred share, payable on May 20, 2025. The second installment will be similar, paid on June 20, 2025. For those holding shares on or before April 16, 2025, this payment will be applicable, as shares will trade ex-rights starting on April 17, 2025.
Investor sentiment remains cautious as the overall performance indicates challenges. The possible impacts on the Bovespa index are under scrutiny, as Petrobras constitutes about 12% of the index weight. Analysts suggest the significant drop in share prices reflects worries about the company's future profitability and strategic direction. To mitigate this unease, Petrobras emphasized its focus on maintaining operational efficiency and enhancing shareholder value, even during turbulent market conditions.
While Petrobras navigates these challenges, the upcoming dividend proposal and investment strategy will be pivotal as stakeholders await the decision from the April assembly, which could steer the company's future direction and investor confidence.