Petrobras has reaffirmed its strategy amidst a share price decline following unexpected investments for 2024. The company’s capital expenditures exceeded prior guidance, prompting discussion about lower dividends. Calls for increased investment align with government economic initiatives, while long-term spending plans remain unchanged, demonstrating Petrobras’s commitment to growth.
Petrobras, the Brazilian state-run oil company, reaffirmed its strategic direction following a dip in share prices after announcing increased investments for 2024. Chief Executive Magda Chambriard indicated that future investments could be expedited if they result in earlier oil production. The company reported fourth-quarter results that exceeded analysts’ expectations, leading to a notable decline in its non-voting shares by over 3% and voting shares by more than 5% on the Sao Paulo B3 exchange.
In the past year, Petrobras spent around $16.6 billion in capital expenditures, which was approximately $2.1 billion above its prior guidance. Chambriard acknowledged the “frustration” of analysts regarding lower-than-anticipated dividends, as the company had to bring forward investments planned for this year. This contrast comes after a history of under-spending relative to previous forecasts.
Under the government of President Luiz Inacio Lula da Silva, Petrobras faces calls to increase its investments to stimulate economic growth and job creation within Brazil. Analysts had anticipated higher ordinary dividends than the 9.1 billion reais ($1.57 billion) the company plans to distribute based on fourth-quarter earnings. They noted that the uptick in investments represented anticipated expenditures, with a maintained spending guidance for 2025 open to a 10% variance.
Chambriard shared insights suggesting that capex for the first quarter would likely lean toward the lower end of this 10% variation. Furthermore, Petrobras did not revise its long-term spending plan for 2025-2029, which remains at $111 billion. This all underscores the firm’s commitment to its operational strategy, despite recent market performance fluctuations.
In conclusion, Petrobras is committed to increasing investment in oil production despite experiencing a decline in share prices after announcing higher-than-anticipated expenditures for 2024. The company aims to foster economic growth and job creation under government directives while managing shareholder expectations for dividends. The Capex guidance for the upcoming years reflects a strategic approach to enhance operational efficiency and production capacity.
Original Source: www.tradingview.com
