Petrobras Beat Expectations in Q2 on Rising Oil Prices

Petrobras NYSE:PBR

According to a statement released by the company on Thursday, Petrobras (NYSE:PBR) beat both the profit and margin estimates for the second quarter. This was made possible by divestments and increased margins in the company’s fuel and natural gas operations.

Petrobras Had a Record Year Despite Divestments and the Conflict in Ukraine

A filing with the Securities and Exchange Commission revealed that Petroleo Brasileiro SA (NYSE:PBR), the official name for the state-owned oil company, had a net income of 54.33 billion reais ($10.5 billion). This was a significant increase over the same period in the previous year, increasing by 26.8%, and came in significantly higher than the Refinitiv consensus estimate of 38 billion reais.

Earnings before interest, taxes, depreciation, and amortization, also known as EBITDA, came in at 98.26 billion reais, which is an increase of 58.6% in annual terms and is significantly higher than the estimate from Refinitiv, which was 83.2 billion reais. Certain non-recurring factors were also taken into account.

Petrobras credited its results to high Brent prices and higher margins in its natural gas and fuels division, which includes gasoline, diesel, and a variety of other petroleum derivatives. 

Profits were bolstered by the business’s effective disposal of a portion of its Atapu and Sepia offshore assets to two Chinese state-run oil firms. In addition, the global search for other oil supplies due to the conflict in Ukraine was also favorable to the company.

According to Petrobras (NYSE:PBR), the conflict substantially impacted the company’s export markets. Because of the conflict, Asian buyers obtained Russian oil while European and North American purchasers did not.

According to the company, the proportion of Petrobras (NYSE:PBR) exports that China bought decreased from 38% to 15%, while the proportion of exports sold to Europe dramatically climbed.

Petrobras Announces a Dividend Payout Worth $17 Billion Amid Oil Price Rally

Petroleo Brasileiro SA (NYSE:PBR) rewarded investors who were able to look past the political noise that has been surrounding the state-owned company by announcing a hefty dividend payment. The announcement came after rising oil prices boosted cash generation during the second quarter.

According to a document submitted to a regulatory body on Thursday, the board of directors of the corporation headquartered in Rio de Janeiro approved dividends amounting to 6.732 reais per share for a total of 87.8 billion reais or $17 billion. That is around 87% of the amount dispersed from the results of the previous year, which was a record, and it is greater than the forecasts provided by Credit Suisse Group AG, which ranged from as much as $14 billion.

Petrobras (NYSE:PBR) has been the target of government pressure to reduce fuel prices and accelerate dividend payments as a means to assist in bringing inflation down from double-digit levels and funding increasing social benefits. During a press conference, Paulo Valle, the Secretary of the Treasury stated that the company’s dividends for the second quarter are sufficient to pay for the increased assistance.

According to a statement released by Petrobras (NYSE:PBR), the dividends are consistent with the company’s commitment to creating value for society and shareholders over the short, medium, and long terms and are compatible with the company’s financial sustainability in the short, medium, and long terms.

Featured Image: Megapixl @Mohammedsoliman4

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About the author: Stephanie Bedard-Chateauneuf has over six years of experience writing financial content for various websites. Over the years, Stephanie has covered various industries, with a primary focus on tech stocks, consumer stocks, health stocks, and personal finance. This stock lover likes to invest for the long-term. Stephanie has an MBA in finance.