Petrobras Q2 dividends to be based on new policy, CFO says

(Reuters) – Brazilian state-run oil company Petrobras (PETR4.SA) is likely to already base its second-quarter dividends on a new policy being prepared by a working group, Chief Financial Officer Sergio Caetano Leite said on Wednesday.

Leite told reporters that studies for the new policy should be completed by the end of this month, with the proposal then set to be voted on by the board of directors.

“Petrobras will have dividends in line of those of its peers,” Leite said, without providing further details.

Markets are closely monitoring what the new policy will look like after the oil giant paid bumper dividends last year, even leapfrogging the biggest international oil producers.

Chief executive Jean Paul Prates told Reuters earlier this week that investors should not get used to the blockbuster dividends they enjoyed last year, saying the new policy would be “adjusted” to the reality of a company investing in the future.

Analysts at Santander, who are “Outperform” rated on Petrobras, said in a Monday note to clients they assume the firm’s dividends will be 40% of free cash flow for the second quarter onward, down from the current 60%.

Goldman Sachs analysts said in a separate note they also model for a dividend policy of 40% of cash flow from operating activities, while major oil producers are expected to allocate 40% to 50% in shareholder remuneration in the upcoming years.