Category: Brazil

In a televised address Brazil’s President Luiz Inácio Lula da Silva apologized to the nation amid allegations of government corruption and called on his cabinet to ensure a congressional probe into the claims doesn’t stunt economic growth. Lula said that those found responsible will be “brought to justice”. Analysts said the vote-buying scandal, which erupted in June, is weakening Lula’s support and making him more vulnerable to demands by unions to boost spending on wages and businesses to cut taxes. Presidential elections are slated for 2006 and Lula may struggle to win a second term.

Brazilian steelmaker Usiminas saw its net profit climb 53 percent year-on-year in the second quarter to $355 million as higher steel prices offset weak domestic demand. Revenue rose 26 percent to $1.45 billion. The company expects inventory levels in the US and Europe to fall and production and sales to rise to normal levels in the fourth quarter. Usiminas exports 25 percent of its products.

Brazilian beverage giant Companhia de Bebidas das Americas (AmBev) reported Ebidta of $590 million in the second quarter, up 93 percent year-on-year. Revenue in Brazil rose 23 percent, while revenue in the rest of Latin America was up 12 percent. Operating margins in the period increased to 38 percent.

Companhia Siderurgica Nacional, Brazil’s third-largest steelmaker, reported net income down 1 percent to $182 million in the second quarter. Sales fell 16 percent year-on-year to 1.137 million metric tons, while domestic steel prices fell 4 percent in the quarter and export prices were down 10 percent. CSN is among Brazilian steelmakers such as Gerdau, Latin America’s biggest steelmaker, whose earning have declined as a cooling economy cuts local sales, forcing increased reliance on less-profitable exports.

to join discussions at Brazil – The Way Forward, The 3rd Brazil Investment Forum in Rio de Janeiro, 31 Aug – 1 Sep 2005. Apply for your invitation today at www.latinfinance.com/brazil

to join discussions at Brazil – The Way Forward, The 3rd Brazil Investment Forum in Rio de Janeiro, 31 Aug – 1 Sep 2005. Apply for your invitation today at www.latinfinance.com/brazil

Brazilian state contractor Marcos Valerio Fernandes de Souza, who’s at the center of a probe of alleged corruption in the ruling Workers’ Party, said he has never lent money to a president or cabinet minister. Opposition lawmakers such as Senator Demostenes Torres have asserted that Valerio helped the Workers’ Party cover some expenses of President Lula da Silva´s transition team and inauguration party in Brasilia. A corruption scandal has dogged Lula´s government since June and threatens to cut into his popularity ahead of next year´s presidential elections.

Brazil’s annual inflation rate declined to 6.57 percent in the twelve months through July, the lowest rate in over a year. Inflation was 7.3 percent in June and peaked in April at a 16-month-high of 8.1 percent. Prices rose 0.25 percent last month, pushed higher by a surge in telephone rates, after falling 0.02 percent in June. The lower inflation rate increased speculation that the country´s central bank will lower its benchmark lending rate next week.

Brazil’s agribusiness exports rose 9 percent in July to $4.1 billion on strong meat, sugar, ethanol and coffee sales. The country´s total trade surplus in the agribusiness sector is $21.4 billion so far this year. Agricultural export growth has been tempered by a strengthening currency and a drought in Brazil´s south.

to join discussions at Brazil – The Way Forward, The 3rd Brazil Investment Forum in Rio de Janeiro, 31 Aug – 1 Sep 2005. Apply for your invitation today at www.latinfinance.com/brazil