Stability sheets for the 2nd quarter level to the affect of inflation and excessive Selic on the financial system

The second quarter earnings season is ending here at Brazil and the results of companies they have one thing in common: they show how the Brazilian economy is doing and what has been impacting the companies’ profits the most.

Until last Friday (12), 72% of companies in the Ibovespa (IBOV) had already disclosed their results and most of them (73%) reported Ebitda above expectations, points out the XP Investments. The amount is higher than the previous quarter (63%). Already 14% were in line with the projections and 14% came below.

However, in terms of revenue, 27% of companies exceeded expectations – the number fell for the third consecutive quarter; 12% went online and 61% went down. This result still reflects the inflation high, which dominated the first half, and led to an increase in the rate Selic.

For Vitorio Galindo, investment analyst at CNPI and head of fundamental analysis at Quantzed, in general, the balance sheets show a certain recovery.

“Of course, it is still far from strong and good economic activity. Inflation and interest high continue to impact the economy, but we had a stronger seasonality in the second quarter”, he says.

O retail, for example, is a sector that recorded positive Ebitda and above projections. However, the interest rate and inflation hampered the results, as retailers are companies that grant credit.

“We are not so bad economically, considering everything that has happened so far, with the pandemic, inflation, high interest rates. Even so, inflation is impacting economic activity, consumer purchasing power, and company margins,” says Vitorio.

Source: Money Times