Distribution of extra dividends from Petrobras cannot compromise investment

The Minister of Finance, Fernando Haddad, stated this Monday (11) that the distribution of extraordinary dividends by Petrobras should not compromise the state-owned company’s investments. He highlighted that it is up to the board to decide “how much”, “how” and “when” the transfer of extra profits should be made. Last week, the oil company announced that it will not pay extraordinary dividends. The initiative caused the company to lose R$55.3 billion in market value on Friday (9).

“What was decided by the council [da Petrobras] is that the distribution of extraordinary profits will be made as it becomes clear to the board that this will not compromise the company’s investment plan”, said Haddad in a press conference alongside the Minister of Mines and Energy, Alexandre Silveira.

The two met with President Luiz Inácio Lula da Silva (PT) this afternoon to discuss the impact caused by the announcement of the retention of extra dividends. The company’s president, Jean Paul Prates, and the chief minister of the Civil House, Rui Costa, also participated in the meeting.

If the decision on dividends is approved by the Petrobras meeting, the amount distributed to shareholders will be R$14.2 billion and another R$43.9 billion would be retained, contrary to financial market expectations. Amid the crisis, Silveira stated that Prates’ departure from command of the company was never considered.

“The Treasury is sometimes provoked to say whether it understands that the distribution could harm the company’s investment plan. Now, the board is sovereign to ask for information. This is normal. [O valor] is in a reserved capital remuneration account, whose destination is distribution. The ‘when’ and ‘how’ will be judged in light of the information”, said Haddad.

Decision may be reevaluated at an “opportune moment”

Silveira highlighted that the distribution of extraordinary dividends may be reevaluated by the company. “The money, the resources obtained from profits that are not mandatory, went to a contingency account that remunerates the capital and that, at the appropriate time, the board can reevaluate the possibility of dividing part or all of it. At the right time”, stated the Minister of Mines and Energy.

“The government strictly respected what determined the predictability of the distribution of dividends, which are ordinary dividends, which are mandatory,” said Silveira. He stated that the government predicted in 2023, when approving the investment plan for the next five years, that the distribution of dividends would be 45%, even “well above” what determines the floor established by law, which is 25%.

Budget will not be affected by extraordinary dividends, says Haddad

During the interview, Haddad highlighted that the decision to withhold extraordinary dividends will not affect the execution of the Budget. The minister also stated that what is included in the revenue foreseen in the Budget are ordinary dividends, as the budget only includes ordinary (mandatory) dividends.

“If extraordinary dividends are distributed, the Treasury will not complain, because the Treasury is a shareholder. But in our Budget, what is stated are the ordinary dividends… The board will judge in light of what is planned”, said Haddad.