Once among the world’s investor darlings, Petrobras dropped from the list of top global dividend payers
The reason?
A big cut in dividends. This cut also lowered Brazil’s total investor payouts by 53%, says a Janus Henderson report.
In Brazil, annual dividend payments fell from US$7.7 billion to US$4.3 billion between April and June.
Swiss food giant Nestlé now holds the top spot as the highest dividend payer.
But Petrobras isn’t alone. Other Latin American oil companies also cut dividends. This led to a slight 0.8% drop in payouts from emerging markets compared to last year.
Worldwide, companies broke a record. They paid out US$568.1 billion in dividends in the second quarter of 2023.
That’s a 4.9% rise from last year. If we ignore special cases and minor factors, the growth rate is 6.3%.
Janus Henderson says 88% of global companies either raised or kept their dividends steady this quarter.
Why did Latin American dividends drop?
In Colombia, only Ecopetrol paid dividends. This led to a 36% drop in payments and a 63% drop overall.
Empresas Copec was the lone payer in Chile but still increased its payouts.
Mexico saw a 4% dividend growth. Banorte led this with a 33% increase, offsetting cuts from Grupo Mexico.
Rising interest rates are good news for banks in emerging markets. They’re making more money and paying higher dividends.
However, the oil sector, mainly in Brazil and Colombia, brought these gains down.
Saudi Arabia’s Al Rahji Bank made a big comeback. It helped boost emerging market dividends after stopping payments in 2021 to save money.
Petrobras is a Brazilian state-controlled company and one of the world’s largest oil producers.
It generated high dividends in the past, making it attractive to investors. However, fluctuations in global oil prices often affect Petrobras’ revenues and dividends.
This isn’t the first time it has cut dividends. In 2016, facing a corruption scandal and low oil prices, it also reduced payouts.
With information from Bloomberg Linea