According to UBS Securities analyst Lilyanna Yang, a decision by
Brazil's state-run oil company Petrobras to set aside
a significant amount of export proceeds to help cushion earnings
from sudden currency changes could help increase dividend
payments for holders of common stock.
"This practice better reflects the company's economic and
operating reality - dollarized revenues in the long run - but
rationale in our view was to show 2013 earnings growth on a
year-on-year basis, as opposed to a decline, and pay higher
taxes plus dividends to Brazil's National Treasury as owner of
58 percent of the voting shares," Yang wrote in a note. Brazil's
federal government is the largest holder of Petróleo Brasileiro
SA's common shares.
The so-called hedge accounting could imply an upside in UBS'
earnings estimates for Petrobras between 3 billion reais and 5
billion reais ($1.3 billion and $2.2 billion) a year for the
2013-2014 period, Yang added. Such an increase could translate
into a rise of 0.06 reais to 0.09 reais in dividends per common
shares, she added.