Prates denies that Lula ordered Petrobras’ dividends to be cut

The president of Petrobras, Jean Paul Prates, denied this Monday (11) that the cut of R$ 14.2 billion in extraordinary dividends from the state-owned company was an order from President Luiz Inácio Lula da Silva (PT), which led the company to lose R$55.3 billion in market value after frustrating shareholders’ expectations.

The company announced on Thursday (7) a 33.8% reduction in profits in 2023 and a 66% reduction in dividends, with R$14.2 billion, of the total estimated R$72.4 billion, still needing approval of the Ordinary General Assembly of the state-owned company.

“The president did not give any orders on the issue of dividends. We are discussing this with the majority shareholder within the space possible. There was a discussion in time for the announcement of the balance sheet, there was a need to close the balance sheet. And it was decided that we would postpone the discussion”, he said late in the morning to G1.

Prates will have a meeting with Lula at 3pm at Palácio do Planalto in which it was speculated that he would discuss the issue of dividends and the loss of Petrobras’ market value. Since the early hours of the day, the state-owned company’s shares have been fluctuating as the financial market awaits what will be discussed.

Jean Paul Prates, however, denied that the state-owned company’s dividends would be on the agenda, and that the meeting had already been scheduled in advance. “This update with the president was agreed for today
[segunda, 11]. Of course, the subject of dividends should come up at the end of the meeting and we will talk a little about it, but that is not the objective of the meeting”, he highlighted.

Also according to the director of the state-owned company, the Petrobras Board of Directors proposed the payment of extraordinary dividends to shareholders, a larger share of profits. However, government representatives voted against the proposal, which ended up being rejected.

Prates stated that they now need to decide what to do with the dividends, but highlighted that the extraordinary remainders from 2023 “cannot be used for anything else” and that the discussion is just “foam”.

“We are left with that decision pending. Extraordinary dividends, it should be said, are distributed 100% to all shareholders, including the government, which has 37% of it, or everything remains in a reserve account. I went with the board for an intermediate proposal, a 50% to 50% proposal. We divide one half, distribute it, after all, these shareholders also believed in our management”, he concluded.

According to the state-owned company, net profit in 2023 was R$124.6 billion, while, in 2022, the amount reached R$188.3 billion, the highest in the historical series. The reduction in profit occurred, according to the company, due to the 18% drop in the international price of “Brent” oil, a reference in oil trading.