2023-09-01 15:26:27
The second quarter result of listed companies showed a sharp drop in net profit, EBITDA and revenue — with companies suffering from acute Selic-itis: huge financial expenses and slowing economic activity.
According to a Santander report, the 150 companies listed under the bank’s coverage reported an average drop of 34.7% in net income and 25% in EBITDA. Net revenue fell by an average of 8.4% year-on-year.
In terms of profit, the positive highlights were the sectors of education, pulp and paper and utilities. These sectors saw their profits grow by 444%, 352%, and 58%, respectively.
The negative highlights were the sectors of food and beverages (-95%), mining (-82%), and steel (-53%).
“In terms of companies, the main highlights were Cyrela, Hapvida, Mercado Livre and Vivo. And the negative highlights were Grupo SBF, CSN, Marfrig and Localiza,” wrote analysts Aline Cardoso and Luane Fontes.
The weak results, however, were already priced in. According to Santander, more than 80% of the analyzed companies reported an EBITDA within the bank’s expectations. With regard to profit, 46% exceeded Santander’s projections and 32% of companies reported weaker results.
Santander also analyzed the evolution in the frequency of use of some words during the companies’ results calls. After an increase in the frequency of use of words such as ‘recession’ and ‘slowdown’ in last year’s fourth quarter calls, the use of these words dropped significantly in the first quarter and remained stable in the second.
“At the end of 2022, the slowdown in economic activity was expected to persist into 2023. However, activity has proven more resilient. The Focus survey projected a GDP increase of 0.8% for 2023 at the end of last year; by the end of August, that estimate had risen to 2.3%,” the analysts wrote.
For them, the high resilience of the service sectors and the labor market contributed to the view that a recession is far away.
“This perception is reinforced by a drop in the frequency of use of the word ‘challenging’ in the second quarter.”
In the quarter, the most used words in calls, according to Santander, were ‘credit, ‘financing’ and ‘loans’ — reflecting “companies’ ongoing concerns about their balance sheets and high interest rates.”
“We also see an increase in the frequency of the word ‘efficiency’, showing that companies continue to focus on cost efficiency to compensate for a weak top line.”
1693606480
#Profit #listed #companies #contracts #pains #Selic