Petrobras (PETR4, PETR3) reported a staggering net loss of R$ 17.04 billion for the fourth quarter of 2024, reversing the surprising profit of R$ 31 billion recorded during the same period last year. This drastic turnaround has raised concerns among investors and analysts about the state of Brazil's largest oil company.
According to the reports released by Petrobras on February 26, 2025, the loss was largely influenced by currency devaluation, which affected the financial transactions between its Brazilian headquarters and foreign subsidiaries. Fernando Melgarejo, the company’s Finance Director, indicated, "The result reflects mainly the impact of the currency devaluation, which is solely accounting, and increased provisions without cash effect." This implies the losses are more about adjustments on the books than actual cash flow issues.
Despite the disheartening news, when excluding these special events from the equation, Petrobras would have recorded an adjusted profit of R$ 17.7 billion, representing a decrease of 53.2% compared to Q4 2023. This adjusted figure provides some reassurance, as it suggests underlying operations are still generating cash, albeit at reduced levels.
The company's total revenue for the fourth quarter came to R$ 121.3 billion, which is down by approximately 9.7% compared to the same quarter the previous year. Likewise, adjusted EBITDA fell significantly by 38.7% to R$ 40.9 billion. These declines reflect not only the impact of the decreasing price of Brent crude, which closed at $74.69 per barrel, approximately 11.1% down from the previous year, but also contributed to reduced sales volumes, particularly of diesel, due to seasonal factors and increased imports.
Throughout 2024, Petrobras managed to accumulate a net income of R$ 36.6 billion, yet this marked a stark decline of 70.6% from the prior year's totals. Such numbers prompt questions about the resilience of the company and its market strategy moving forward.
CEO Magda Chambriard emphasized during the quarterly results announcement, "We achieved positive operational cash flow of R$ 204 billion for 2024," stressing the importance of maintaining strong cash generation even amid losses. She outlined plans to refocus on production goals to maximize value generation, highlighting initiatives set for 2025.
Petrobras has approved R$ 9.1 billion in dividends as part of its continued commitment to returning value to shareholders. This decision was made concurrently with the release of its dismal financial results. The dividends require approval at the upcoming General Assembly scheduled for April 16, 2025, and if approved, the payments will be executed in two installments on May 20 and June 20.
Investors will be closely watching how Petrobras intends to navigate these murky waters. The company plans to continue its investment strategy, which includes US$ 16.6 billion earmarked for capital expenditures this year — reflecting a 31% increase from 2023, driven largely by development projects within the promising pre-salt layers.
Despite the recent challenges, the company is projected to ramp up production capabilities, with expectations of increasing oil output by about 100,000 barrels per day through new systems coming online. The anticipation for operational launches, particularly from the Búzios field and other initiatives, suggests Petrobras remains focused on growth and recovery.
Petrobras' balance sheet has shown signs of stress with net debt climbing to US$ 52.24 billion, marking increases year-on-year. The financial community remains attentive to how effectively Petrobras can manage its debts and operational costs, particularly since the overall leverage ratio has shown meaningful increases against prior quarters.
Moving forward, the financial health of Petrobras will depend not only on passing the upcoming dividend proposals but also on how successfully it executes its broader strategy, including investments, operational efficiencies, and pricing strategies. The company is committed, according to the leadership, to continue on its path of strategic investment and shareholder engagement, assuring them of its intent to generate value sustainably amid volatile market conditions.
With these dynamics at play, Petrobras finds itself at a crossroads, attempting to balance shareholder expectations with the harsh realities of market fluctuations and operational challenges. Investors, analysts, and the market will be watching closely as the company navigates its recovery and renewed focus for the year ahead.