Petrobras recognizes mega-dividends as extraordinary, and says they meet technical criteria

The Chief Financial and Investor Relations Officer acknowledged that the payment of the mega-dividend by Petrobras was “extraordinary”, but stated that it was based on technical criteria. Rodrigo Araujo said, at a press conference held by videoconference, that the advance payment in the quarter is part of a new policy instituted at the end of 2021. The amount of BRL 87.8 billion distributed to shareholders met the interests of the government, which needed to resources to cover the cash.

“We incorporated the company’s 60% free cash flow dividend policy in 2019 and made improvements in 2020 and 2021. Especially in 2021, we incorporate issues such as the quarterly payment frequency, something that we doing there since the third quarter of 2021. Proposing quarterly payments. And obviously the possibility of making extraordinary payments depending on the company’s financial situation and ensuring the preservation of the company’s sustainability”, he said.

In practice, this is the second time that Petrobras has distributed more money than the equivalent of 60% of free cash flow. Although the state company claims that the decision was technical, the distribution of resources directly serves the interests of the Federal Government. Earlier this week, Treasury Secretary Esteves Colnago made a public request for state-owned companies to advance dividends to cover the gap in the budget left after the approval of tax benefits and aid.

The dividend is the part of the profit that goes back into the hands of a company’s shareholders. Although it is state-owned, Petrobras is a publicly traded company listed on the São Paulo and New York stock exchanges, so whoever holds shares in the company is entitled to receive a portion of the profit. The Union’s share is 37% of the total.

“The company’s strategic plan last year is that all investments prove profitable in our price scenarios have been proven. So we have assured investments, that is, the company does not stop making investments to pay dividends. It’s not that. The company has a comfortable cash position and a balanced debt situation, we consider it a very low indebtedness”, said the director.