An XP analysis points out that ordinary dividends are projected to maintain the recent pace, with the potential for extraordinary distribution being a positive point.
The disclosure of the annual budget bill for 2025 (PLOA) to the National Congress brought important indications about the government’s prospects for receiving dividends to be paid by Petrobras (PETR3; PETR4), highlights XP, which points out that dividends should continue to flow.
Last Friday (30), the executive branch of the government presented the PLOA to the National Congress with a forecast of dividends from all state-owned companies of about R$ 34 billion, which represented a decline compared to the previous year.
With this, analysts Regis Cardoso and Helena Kelm, who signed the XP report, point out that some investors were concerned that this could imply a decrease in Petrobras’ dividend flow.
“However, we do not share this concern. Instead, we suspect that the budget had only incorporated Petrobras’ ordinary dividends,” they pointed out.
On Monday (2), representatives from the Ministry of Finance held a public conference detailing the government’s budget proposal for 2025, bringing additional details, such as the dividends expected specifically from Petrobras – R$14.6 billion from the government’s direct stake of about 28.7% in the company.
By calculating an increase based on the government’s R$14.6 billion dividend from its stake in Petrobras, Cardoso and Helena conclude that Petrobras is expected to pay just under US$10 billion in 2025. In other words, a dividend yield of 10%.
However, they reinforce that the government’s forecast only considers ordinary dividends paid according to Petrobras’ dividend policy of 45% of free cash flow.
The analysts believe that the estimate is accurate and reflects the continuation of the dividend distribution pace of recent periods (around US$2.5 billion per quarter).
It also corresponds to XP’s own estimates, but they see room for additional extraordinary dividends, as they estimate Petrobras’ Free Cash Flow to Shareholder (FCFE) at US$16 billion.
“We believe that this difference of US$6 billion (yield of about 6%) will likely turn into extraordinary dividends later, with a potential total dividend yield of 16%.
In our opinion, Petrobras’ valuation remains attractive,” they point out.Assumptions for oilRegarding the assumptions for brent prices, whose barrel fell below US$80, the analysts see that prices are likely to recover and continue to reach an average of around US$80/bbl, but they see risks if global demand slows down.
“Petrobras is significantly leveraged in relation to oil prices and will therefore be directly affected if Brent stays low for longer,” they assess.
Cardoso and Helena estimate that for every US$5/bbl change in brent, the company’s dividend policy is impacted by approximately US$1.1 billion per year (about 1.2% annual yield). In terms of FCFE, this sensitivity increases to about US$2.5 billion (about 2.7% yield), while the impact on earnings before interest, taxes, depreciation, and amortization (EBITDA) is about US$3.7 billion, assuming Petrobras follows the diesel/gasoline parity.
