RIO DE JANEIRO/SAO PAULO, Aug 29 (Reuters) - While analysts liked a new dividend policy announced by Brazil’s state-controlled oil company, Petrobras, they expect it to go into effect only in 2021.
In a securities filing on Wednesday evening, Petrobras said the board approved a change in its dividend policy. Petrobras will be allowed to pay up to 60% of its operational cash flow, excluding capital expenditures, as dividends when its gross debt falls below $60 billion.
While Petrobras still has debt higher than $60 billion, the company expects to pay the legal minimum dividend of 25% of its net income, the company said.
Petrobras’ current gross debt is at $101 billion, according to its second quarter financial statements. The company has been reducing its debt aggressively, selling assets and reducing costs.
“The new policy is positive, because it means shareholders will make an effort to reduce the debt,” analysts at Bradesco BBI said in a note to clients. But the bank expects Petrobras to pay up to 60% of its cash flow only from 2022 on.
Analysts at Credit Suisse think the new policy may go into effect in 2021. “We expect Petrobras to pay the minimum legal dividend in 2019 and 2020”, they said in a note to clients.
Goldman Sachs analysts said the new policy improves predictability of the dividend flow, but also expect the gross debt to fall below $60 billion between 2021 and 2024, depending on the pace of asset sales. (Reporting by Marta Nogueira in Rio de Janeiro, Roberto Samora and Paula Laier in Sao Paulo; Editing by Steve Orlofsky)