Tag Archives: Brazil

Brazil’s Petrobras posted solid margins, but a one-time fee hit the advantage | Instant News


RIO DE JANEIRO (Reuters) – Petrobras Brazil posted unexpected losses thanks to non-recurring fiscal costs, even as operating income was supported by a recovery in fuel sales and oil revenues.

FILE PHOTO: The logo of Brazil’s state-owned Petrobras oil company is seen at their headquarters in Rio de Janeiro, Brazil October 16, 2019. REUTERS / Sergio Moraes / File Photo

In Wednesday’s securities filing, Petroleo Brasileiro SA PETR4.SA, the official title of the state-owned oil company, recorded a third-quarter loss of 1.546 billion reais ($ 275 million). Income before interest, tax, depreciation and amortization (EBITDA), adjusted for one-time items, was 33.4 billion reais, above Refinitiv’s estimate of 29.7 billion reais.

Among the one-time charges the company highlighted were a 1.9 billion reais payment to two state governments to settle unpaid tax disputes, as well as a significant bond buyback program. The decline in the Brazilian real against the US dollar helped amplify some of the losses, the company added.

Petrobras said that, excluding one-time items, the company will post a net profit of 3.2 billion reais, beating Refinitiv’s estimate of 736 million reais.

Among the positives for the company is significant sales growth, especially gasoline and diesel. Net revenue was 70.7 billion reais in the quarter, up 39% from the previous period.

“The recovery in sales of diesel and gasoline is prominent,” the company said. “These products were severely affected by COVID-19 in the second quarter and the recovery is the strongest in our portfolio, both in terms of volume and price.”

Crude oil exports to China – which have skyrocketed in recent quarters as production increased as the worst pandemic passed – slowed to pre-pandemic levels. Meanwhile, exports to other markets such as the United States, Spain and Indonesia have grown significantly since the second quarter.

Even Chinese demand may have recovered later in the quarter.

Brazil jumped to become China’s third-largest crude supplier in September, import data showed on Sunday, as independent Chinese refiners scooped up cheap supplies of relatively high-quality South American exporter oil.

Petrobras said that average production costs fell from $ 7.90 per barrel of oil equivalent in the second quarter to $ 4.50 in the third, thanks in part to increased efficiency and partly due to real depreciation.

($ 1 = 5.62 reais)

Reporting by Gram Slattery and Sabrina Valle; Edited by Christian Plumb and Sam Holmes

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EMERGING MARKET-Brazilian Real hit 5 month low ahead of interest rate moves; Latam FX is falling | Instant News


    * Real falls as central bank seen keeping rates unchanged 
    * FX market volatility rises on U.S. election uncertainty
    * Latam stocks index set for worst day since late April 

 (Updates prices throughout; adds comments, bullets)
    By Shreyashi Sanyal
    Oct 28 (Reuters) - Brazil's real touched a five-month low on
Wednesday on expectations the central bank will leave its policy
rate unchanged, while other Latin American currencies fell on
uncertainty about the outcome of U.S. elections.  
    The real tumbled 1.2% to fall for the fourth
straight day as Brazil's central bank was seen leaving its
benchmark Selic rate at a record low of 2.0% at 2100 GMT. 
    "The extension of the budget deficit in an effort to fight
the effects of the pandemic is limiting the central bank's scope
to cut rates further," said Melanie Fischinger, FX and emerging
markets analyst at Commerzbank. 
    Brazil's currency is among the worst performing emerging
market units this year, falling 30%, as fears remained about the
 government overshooting its spending ceiling to fund a new
fiscal package. 
    "It is looking increasingly likely that the Brazilian
government will violate its constitutional spending cap, or at
least the spirit of it," said Thomas Mathews, markets economist
at Capital Economics. 
    "Abandoning the cap would see further depreciation of the
real against the U.S. dollar, and perhaps an increase in
Brazilian government bond yields."
    Most emerging market currencies weakened against the dollar
 as traders hedged against the possibility of a Democratic
sweep in Tuesday's U.S. elections. Gauges measuring expected
swings in foreign exchange markets rose, with one-week contracts
that cover the vote reaching their highest levels in nearly
seven months.
    Surging novel coronavirus cases also kept risk sentiment at
bay, while a 5% fall in oil prices pushed currencies of
crude-exporters including Mexico and Colombia
lower.
    The Mexican peso tumbled more than 0.9%, while Colombia's
peso slipped 0.5%. 
    Chile's peso bucked an eight-day winning streak to
fall 0.1%, with local investors focusing on the country's path
to reframe its constitution.   
    Argentina auctioned a dollar-linked bond and other debt for
a total of about $3.18 billion on Tuesday, the economy ministry
said, as the government looks to ease pressure on the battered
peso currency. The country's peso currency was flat. 
    The MSCI's index for Latin American stocks
tumbled 4.5%, on track for its worst one-day percentage decline
since late April. 
    Sao Paulo stocks tumbled 3.5%, with heavyweight
miner Vale falling 2%. 
    Santiago stocks dropped 1.8%, weighed by a 2%
decline in shares of Banco Santander-Chile after
it expected to show a fall in quarterly revenue.
    
    Latin American stock indexes and currencies at 1915 GMT:
            Stock indexes                    Latest   Daily %
                                                      change
 MSCI Emerging Markets                       1120.34     -1.2
 MSCI LatAm                                  1841.97    -4.52
 Brazil Bovespa                             96080.05    -3.54
 Mexico IPC                                 37444.13    -1.47
 Chile IPSA                                  3630.24    -1.81
 Argentina MerVal                           44391.44   -4.959
 Colombia COLCAP                             1130.56    -2.75
                                                             
               Currencies                    Latest   Daily %
                                                      change
 Brazil real                                  5.7483    -1.16
 Mexico peso                                 21.2051    -0.83
 Chile peso                                    773.7    -0.12
 Colombia peso                                3828.5    -0.55
 Peru sol                                     3.6117    -0.14
 Argentina peso (interbank)                  78.3000     0.01
                                                      
 Argentina peso (parallel)                       174     4.02
 


 (Reporting by Shreyashi Sanyal in Bengaluru; Editing by
Bernadette Baum and Grant McCool)
  

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Brazil’s social distancing looks to return to pre-pandemic levels in December – economy ministry official | Instant News


BRASILIA, Oct 28 (Reuters) – Social distancing in Brazil is expected to return to pre-pandemic levels in mid-December, which will help reduce unemployment next year and extend the already underway economic recovery, a senior Economy Ministry official said on Wednesday.

Speaking at a virtual debate hosted by Safra Bank, Economic Policy Secretary Adolfo Sachsida said the big challenges next year will be employment, credit and fiscal consolidation, adding that fiscal discipline is the best thing for Brazil, especially the poor, as it will keep inflation and interest rates low. . (Reporting by Jamie McGeever and Marcela Ayres Editing by Chris Reese)

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UPDATE 1-Bradesco Brazil set aside $ 462 million for COVID-19 loan losses | Instant News


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SAO PAULO, October 28 (Reuters) – Brazilian lender Banco Bradesco SA reported a higher-than-expected third-quarter recurring net profit on Wednesday, despite a surge in loan loss provisions amid the coronavirus pandemic.

Brazil’s second-largest private sector lender posted net income of 5.031 billion reais ($ 894.56 million), about 15% above the consensus analyst forecast according to Refinitiv, but down 23.1% from a year earlier.

Bradesco set aside 5.588 billion reais for bad loans, up 67.5% from a year earlier, but down 37.1% from the previous quarter. That includes 2.6 billion reais in extraordinary provisions related to potential losses caused by the coronavirus crisis.

“The results show the first signs of returning to normality,” said Bradesco Chief Executive Octavio de Lazari in a statement.

As the bank provided a grace period of up to 180 days to help clients deal with the economic crisis stemming from the coronavirus pandemic, the 90-day default ratio fell 0.7 percentage points to 2.3%.

The bank said it was providing a loan grace period of up to 73 billion reais.

Its lending books rose only 0.5% during the quarter, mainly on consumer loans, even though Brazil is facing a recession and unemployment is at its highest level in eight years.

The bank also indicated it has taken some cost-cutting steps as it fell 5.7% from a year earlier, but rose during the quarter.

Return on equity was at 15.2%, recovering from the second quarter, when the bank decided to set aside extraordinary provisions to deal with the coronavirus pandemic.

$ 1 = 5,6240 reais Reported by Carolina Mandl; Edited by Leslie Adler and Sam Holmes

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UPDATE 1-Brazil’s inflation is “completely under control,” said Sachsida of the economy ministry | Instant News


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BRASILIA, Oct 28 (Reuters) – Inflation in Brazil is not an issue and the recent spike caused by rising food and fuel prices was temporary, said Adolfo Sachsida, secretary of economic policy at the economy ministry, Wednesday.

Speaking at an online event organized by Safra Bank, Sachsida also said social distancing could return to pre-pandemic levels in mid-December, which would help reduce unemployment and extend the already underway economic recovery.

“I’m not worried about inflation. When you look at the expectations for this year and next year, inflation is really under control, ”said Sachsida. “Inflation is not a problem.”

The most recent measure of consumer inflation in the month to mid-October was 0.94%, the highest for each October since 1995. Annual inflation rose to 3.52%, still below the central bank’s official goals for this year and next, but some economists said it was. bear attention.

The central bank is expected to keep Selic’s benchmark interest rate at a record low of 2.00% on Wednesday, with some economists expecting to close the door for further easing due to the recent spike in inflation.

Sachsida said the biggest challenges for Brazil’s economy next year will be employment, credit and fiscal consolidation, adding that austerity is the best thing for Brazil, especially the poor, as it will keep inflation and interest rates low.

He said unemployment would fall next year as social distancing restrictions ease and the dominant service sector gains momentum.

“The figures we have suggest that social distancing will return to February levels by mid-December. We are not epidemiologists, I just share data that I follow as part of my job, ”said Sachsida.

“From an economic point of view, they give us great confidence that in mid-December we will experience a movement like we did in February, and from January people will be back safely to work,” he said.

Brazil’s unemployment rate stands at 13.8%, the highest since statistical agency IBGE started the series in 2011, and is expected to increase further in the coming months. (Reported by Jamie McGeever and Marcela Ayres Editing by Chris Reese and Alistair Bell)

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