With valued oil and strong production, what to expect in 3Q23 By Investing.com

Investing.com – With strong production and valued prices, analysts are showing optimistic expectations regarding the balance sheet of Brazilian state oil company Petrobras (BVMF:), which will be released this Thursday, 9th.

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The InvestingPRO platform, which brings together estimates from several analysts, projects earnings per share (EPS) of R$1.90, with revenue of R$127.5 billion.

Source: InvestingPRO

Source: InvestingPRO

Source: InvestingPRO

In the opinion of the bank Goldman Sachs (NYSE:), Petrobras’ strong operational performance in the third quarter corroborates the expectation of a strong period for the company. Goldman believes in a healthier price environment for diesel, as mentioned by analysts Bruno Amorim, João Frizo and Guilherme Costa Martins. GS has a buy rating for the state-owned company’s shares, with a target price of US$18.4 for ADRs, R$42.40 for preferred shares and R$46.60 for common shares.

BTG (BVMF:) agreed with the robustness of the operational data, which came in line with what the bank expected. Projections are for net revenues of US$26 billion, EBITDA of US$13.9 billion and profits of US$4.9 billion.

“We anticipate robust financial results from the upstream and downstream units. Prices rose 10% quarterly and production growth is expected to reinforce operating leverage, reducing ramp costs to US$7.7/bbl (from US$7.9/bbl in the second quarter) and increasing sales of derivatives, along with increases in fuel prices”, detail analysts Pedro Soares and Thiago Duarte. BTG has a buy indication for Petrobras, with a target price of US$16 for the ADRs.

Itaú BBA expects Petrobras to present US$14.5 billion in EBITDA in the quarter, an increase of 24% compared to the previous quarter. Among the reasons would be higher oil prices, production and sales numbers, say analysts Monique Greco, Bruna Amorim and Eric de Mello. Itaú BBA’s recommendation is market performance, equivalent to neutral, with a fair value of R$38 for PN shares and US$14.5 for ADRs.

Meanwhile, XP Investimentos (BVMF:) expects a solid quarter for the company due to higher Brent prices, rising sales volume and production, leading to an adjusted EBITDA of US$14.4 billion, highlight analysts André Vidal and Helena Kelm.

Genial Investimentos estimates solid results, due to the evolution of produced volumes and Brent prices, with EBITDA of R$57 billion, total production estimated at 2.8 million barrels equivalent (2.3 million in oil) and an average sales price of US$82 per barrel.

Production and sales

The state-owned oil company presented an average production of oil, NGL and 2.88 MMboed in the third quarter of this year, 9.1% above 2Q23.

As pointed out in a production and sales report released to the market, the increase was due to “the better operational performance of the pre-salt platforms and the lower volume of losses due to stoppages and maintenance, in addition to the ramp-up of the P-71 platforms, in the Itapu field, FPSO Almirante Barroso, in the Búzios field and FPSO Anna Nery, in the Marlim field”.

According to the company, the start of production of the FPSO Anita Garibaldi, in the Marlim and Voador fields and the entry of new wells from complementary projects in the Campos and Santos Basins also brought positive effects, which were partially offset by the decline of mature fields and through divestments.

Meanwhile, pre-salt production reached a new quarterly record of 2.25 MMboed. This amount, according to the company, represents 78% of the company’s total production. Previously, the record was 2.06 MMboed, recorded in the immediately previous three months.

Dividend payment

Investors will be paying attention, in addition to the balance sheet, to the announcement of the payment of dividends by the state-owned company, amid caution that the policy for paying dividends to shareholders may undergo changes under new management.

XP expects minimum dividend payments of US$4.3 billion, around R$1.6 per share, leading to a yield of 4.5%. Genial’s expectation is a dividend of R$1.24 per share for the third quarter, or 14% annualized yield. “However, it is important to mention that we consider in our estimates the company’s official investment plan for 2023 (US$16 billion) vs US$5.7 billion in the first half. If the company continues to underinvest in relation to its current strategic planning, naturally, there will be greater space for paying dividends”, believes Genial.

Source: InvestingPRO

Itaú BBA projects dividend payments, in accordance with the remuneration policy, of US$3.9 billion in the quarter, which implies a dividend yield of 4.1%. BTG believes in dividend payments of US$3.5 billion, a yield of 3.6%, and expects the company to remain pragmatic in this sense. “We still think that rationality will prevail”, he concludes.

This Wednesday, 8th, at 1:46 pm (Brasília time), preferred shares fell 1.86%, to R$34.27.