Petrobras and Vale, Brazil’s largest dividend-paying companies, have cut their dividend distributions to shareholders.
A study by Meu Dividendo shows their contribution dropped to 38% this year.
For Vale, a struggling Chinese economy is to blame. China is a key buyer of iron ore, which affects Vale’s financials.
On the other hand, political shifts impact Petrobras. Wendell Finotti, CEO of Meu Dividendo, raises concerns about this.
There may be further cuts in Petrobras’ dividends. A meeting in November could approve a new reserve policy.
This policy could limit the cash that Petrobras can distribute as dividends. Last year, the company gave 76% of its profit as dividends. This year, it’s down to 53%.
In Brazil, publicly traded companies are cutting back dividends. They paid out 31% less in the first 10 months of this year.
According to Meu Dividendo, this drop is due to various uncertainties. At first, people thought 2023 would break dividend records.
However, companies have reduced dividends each month. “The dividend market is changing,” says Finotti. He notes that companies like to save money in uncertain times.
Additionally, companies delay dividend payments more now. In October, the average waiting time for shareholders was 117 days.
This is the longest delay in the past six years. The average this year is 67 days, compared to 55 last year and 63 the year before.
Background
Brazil’s economy is going through uncertain times. This impacts the decisions of major companies like Petrobras and Vale.
Both are crucial to Brazil’s financial landscape and influence the overall economy. Dividends are often a sign of economic health.
Thus, their reduction is noteworthy. The political shifts affecting Petrobras also highlight governance issues.
The dividend cutbacks reveal a conservative business approach in volatile times. The lengthening wait for dividend payouts suggests companies are cautious.
This caution reflects the broader economic uncertainty that Brazil is currently experiencing.
More: Brazil news in English, every day from The Rio Times.
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Brazil — Live Market Board
+0.46%
183,827.59
+0.46%
65,071.30
+0.20%
11,055.91
-0.73%
2,782,561
-0.59%
2,558.92
-0.79%
60,220.45
+0.32%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 183,827.59 | +0.46% | +21.85% | 182,991.13 | 168,310 | 167,142 | — |
| USD/BRL | 5.16 | +0.01% | -5.13% | 5.16 | 5.18 | 5.14 | — |
| SELIC | 14.00% | — | — | — | — | — | |
| PETR4 | 41.64 | -0.05% | +35.19% | 41.66 | 41.97 | 41.15 | 41,499,400 |
| VALE3 | 72.97 | +0.83% | +30.75% | 72.37 | 73.54 | 72.66 | 17,658,000 |
| ITUB4 | 38.60 | -1.03% | +4.57% | 39.00 | 39.34 | 38.39 | 29,487,800 |
| BBDC4 | 16.85 | +0.36% | +3.50% | 16.79 | 16.90 | 16.67 | 19,416,900 |
| BBAS3 | 19.37 | +0.47% | +0.73% | 19.28 | 19.44 | 19.16 | 11,069,200 |
| B3SA3 | 14.26 | -0.21% | +12.73% | 14.29 | 14.47 | 14.11 | 33,037,800 |
| ABEV3 | 14.89 | -0.80% | +21.91% | 15.01 | 15.07 | 14.81 | 16,453,100 |
| WEGE3 | 47.59 | +0.49% | +29.99% | 47.36 | 48.08 | 47.36 | 3,364,600 |
| PRIO3 | 59.14 | -0.19% | +50.67% | 59.25 | 59.81 | 58.74 | 3,325,600 |
| SUZB3 | 41.33 | +2.35% | -23.55% | 40.38 | 41.48 | 40.35 | 3,914,900 |
| RENT3 | 34.68 | -0.09% | +0.84% | 34.71 | 34.96 | 34.35 | 7,979,100 |
| AZZA3 | 15.89 | -2.63% | -53.76% | 16.32 | 16.42 | 15.82 | 1,330,300 |
| CSNA3 | 4.30 | +0.47% | -42.65% | 4.28 | 4.41 | 4.26 | 10,076,100 |
| GGBR4 | 24.69 | +2.19% | +51.38% | 24.16 | 24.85 | 24.18 | 7,047,600 |
| ENEV3 | 24.21 | -1.38% | +70.49% | 24.55 | 24.64 | 23.99 | 9,297,000 |
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