Petrobras records a loss of more than 2,5 BILLION, but will pay 13 BILLION to its shareholders

The financial scenario of Petrobras, one of the largest Brazilian companies, took an unexpected turn in the second quarter of 2024.

At a time when most expected continuity in stratospheric profits that the state-owned company had been recording, the company shocked the market by publishing a loss of more than R$2,5 billion. But, surprisingly, this loss did not stop the company from announcing the payment of a robust R$13 billion in dividends to its shareholders.

What explains this disparity? To understand how a company that recorded a billion-dollar loss still manages to generously reward its investors, it is necessary to analyze the context behind these numbers.

Petrobras justified the negative result mainly by two factors: exchange rate variation and a massive tax agreement signed with the federal government. The transaction, which involved the settlement of tax debts in the order of R$45 billion, had a significant impact on the company's accounting balance sheet, but, as highlighted by the state-owned company's management, this effect did not compromise the company's cash flow.

The new leadership and the first review under Magda Chambriard

The second quarter of 2024 marked Magda Chambriard's debut as president of Petrobras. She took up the post amid a storm of controversy, following the dismissal of Jean Paul Prates, who left amid intense debates over the company's dividend policy.

This change of command generated varied expectations about the future of Petrobras, and the first financial report under Chambriard's management confirmed that the challenge would not be small.

Despite the loss, the new leadership highlighted the company's strong cash generation. According to Fernando Melgarejo, Petrobras' financial director, the robust cash flow allowed the company to maintain its commitments to shareholders, in addition to making significant investments, which totaled US$3 billion in the period.

Impacts and justifications for the loss

The loss of R$2,605 billion reported by Petrobras in the second quarter was the company's first negative result since 2020. This performance was drastically different from the profit of R$28,782 billion recorded in the same period of the previous year and the R$23,7 billion achieved in the first three months of 2024. The exchange rate variation and adherence to a billion-dollar tax agreement are cited as the main reasons for this change in scenario.

In June, Petrobras decided to join a program to settle tax and tax issues with the Attorney General's Office of the National Treasury (PGFN) and the Federal Revenue Service. This agreement, which involved amounts exceeding R$45 billion, aimed to resolve old tax issues and, according to the company, will bring long-term benefits. However, the immediate effects of this process were felt in the quarterly balance sheet, resulting in the negative impact recorded.

Even so, “Without these exclusive events, second quarter net profit would have reached $5,4 billion,” stated Fernando Melgarejo in a report. He also highlighted that the company's adjusted EBITDA, which measures earnings before interest, taxes, depreciation and amortization, would have been US$12 billion, in line with the previous quarter's numbers.

EBITDA, sales revenue and oil production

Even with the adverse scenario, the Petrobras presented robust numbers in some areas. The company's adjusted Ebitda reached R$49,7 billion between April and June 2024, which represents a drop of 12,3% compared to the second quarter of 2023. Compared to the first three months of this year, Ebitda suffered a decline of 17%, mainly influenced by lower margins in diesel and gasoline, in addition to the increase in imports.

Despite this, the company managed to offset part of these losses with the increase in revenue from exports, driven by the appreciation of Brent oil. Petrobras' sales revenue totaled R$122,3 billion in the second quarter, an increase of 7,4% year-on-year and a growth of 3,9% compared to the previous quarter. These results demonstrate the company's ability to adapt and explore opportunities even in a challenging context.

With regard to production, Petrobras also showed resilience. Last month, the state-owned company announced that its oil production in Brazil grew 2,6% between April and June, compared to the same period in 2023. This increase was mainly driven by the entry into operation of new platforms over the past year , which have contributed to the increase in production.

Dividend payments: a controversial policy

Even in the face of a billion-dollar loss, Petrobras chose to continue with its shareholder remuneration policy. The company's Board of Directors approved the payment of R$13,57 billion in dividends and interest on equity, a decision that has generated intense debates about the state-owned company's priorities.

“The net result for the quarter must be analyzed in light of events that impacted the accounting result, but without a relevant impact on the company's cash flow,” explained Fernando Melgarejo. This dividend policy, which had been criticized in the past, continues to be a point of discussion, especially at a time of financial difficulties.

Payments will be made in two installments: the first on November 21, 2024 and the second on December 20, 2024. For shareholders who hold Petrobras common and preferred shares, the value per share will be R$1,05320017.

These amounts will be distributed according to the rules defined by the company, and holders of ADRs (American Depositary Receipts) will also receive their shares on specific dates, as announced by the company.

In any case, it appears that Petrobras' recent trajectory reflects the challenges and complexities faced by large corporations, especially in strategic sectors such as energy.

The loss recorded in the second quarter of 2024, combined with the payment of billion-dollar dividends, raises questions about the sustainability of the state-owned company's financial policies and its ability to face future crises. With Magda Chambriard's new leadership, the market will be attentive to the company's next steps, especially in a scenario of economic volatility and regulatory changes.

Will Petrobras be able to balance its financial commitments with the interests of shareholders without compromising its long-term financial health? This is a question that will undoubtedly continue to generate discussions among experts and investors in the coming months.