Category: Brazil

Companhia Siderurgica Nacional, Brazil’s third-largest steelmaker, cut its sales forecast 5.7 percent this year as higher interest rates reduce domestic sales. Sales will total 5 million metric tons this year, down from an earlier estimate of 5.3 million tons, according to company estimates. CSN also delayed a decision on whether to invest $2.5 billion to build a new blast furnace.

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Uniao de Bancos Brasileiros, Brazil’s third-biggest private bank, said second-quarter profit rose 49 percent to $198 million as lending increased. Brazilian banks are reporting a surge in profit as a growing economy fuels demand for credit while interest rates, at their highest since October 2003, boost returns on loans.

Brazil’s Embraer, the world’s fourth-largest aircraft maker, said second-quarter profit declined 56 percent to $70 million after plane deliveries slowed and a stronger currency eroded sales. Revenue fell 36 percent to $808 million. Chief Executive Mauricio Botelho’s plan to expand beyond the 50-seat regional jet market has run into slumping demand for aircraft from European and North American airlines.

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.

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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.