"Petrobras skimps on dividend, market value plummets by $14 billion"

" Petrobras skimps on dividend, market value plummets by $14 billion \r\n\r\nBrazil\u2019s state-run oil company, Petrobras, saw its shares crash on Friday after it skimped on its dividend, with the ramifications spilling beyond Petrobras and into the wider Brazilian stock market.\r\n\r\nPetrobras\u2019 market value tumbled on Friday by $14 billion after the company\u2019s fourth-quarter results\u2014published on Thursday\u2014disappointed investors with a reduced dividend. Investors and analysts had expected an extraordinary dividend between $3 and $4 billion for the quarter, on top of the $2.9 billion regular dividend. But Chief Executive Jean Paul Prates sent shares in the company tumbling when it announced that the year-end payout to shareholders\u2014the Brazilian government included\u2014would only be for the routine dividend of $2.9 billion.\r\n\r\nThe reduction in shareholder payout sends a clear message to investors. According to JPMorgan, \u201cInvestors should expect only minimum dividends for Petrobras,\u201d pointing out that the routine dividend only represented a dividend yield of 8.1% for 2024\u2014a figure that was \u201csubstantially below that of peers that typically deliver returns in the low teens,\u201d JPMorgan wrote, according to Reuters.\r\n\r\nOther analysts jumped on the criticism wagon and downgraded Petrobras, including BofA, who said that the decision to scale back the dividends \u201cheightens the risk perception at Petrobras, particularly on the government influence regarding major capital allocation decisions.\u201d\r\n\r\nPreferred shares in Petrobras fell 10% on Friday morning, resulting in the benchmark Voespa stock index falling 1.4% as investors weighed the message sent to the market as an affirmation that the state-run oil major could shift focus to renewables and that the company might be pursuing a strategy of mergers and acquisitions.\r\n\r\nIn February, Petrobras CEO Prates told Bloomberg that his plans were to have 50% of the company\u2019s revenues come from wind, solar, and renewable fuels within ten years, adding that he believed shareholders would understand."

"Petrobras skimps on dividend, market value plummets by $14 billion"

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