Petrobras ADR rises 3% in the U.S. thanks to massive profits and colossal dividend

RIO DE JANEIRO, BRAZIL – Petrobras ADRs are up about 3% in pre-market trading in the US this morning.

If confirmed, the B3 valuation could push Ibovespa higher in today’s session, as the company has the second-largest stake in the index after Vale.

The high level of the securities reflects investors’ reaction to the figures released last night by the state-owned company.

Petrobras recorded a profit of R$44.5 billion (US$8.5 billion) in the first quarter of 2022. This figure was 3,718% higher than in the same period in 2021 and 41% more than the previous quarter, and more than the Bloomberg consensus, which was R$42.42 billion.

Adjusted EBITDA of R$77.7 billion and revenues of R$141.64 billion were also slightly higher than market forecasts. However, the icing on the cake was the announced dividend of R$3.715490 per Petrobras share. The figure was at the upper limit of market expectations.

Considering the number of shares of the company, the total dividend payable to shareholders amounted to R$48.5 billion.

According to Petrobras, the better result was due to the increase in Brent oil price during the period. Higher margins on diesel, oil exports, and the dollar’s devaluation against the real also benefited the company.

The state-owned company faces increasing criticism at home over its fuel pricing policy. President Bolsonaro has called the company’s massive profits “rape,” while the Brazilian Transport Association says there will be a shortage of public buses if diesel prices continue to rise. 50% of Brazilian households have slipped into poverty

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