Fiscal watchdog flags risk from state-owned companies’ financial situation

The warning appears in the July Fiscal Monitoring Report (RAF), released Thursday (23). The chapter on state-owned companies was written by director Alexandre Andrade and staff member Gustavo Queiroz. Among the companies showing financial deterioration are Correios, Emgepron, and Infraero.

Correios, for instance, posted negative operating cash flow of R$692 million in 2025, following a R$2.4 billion deficit the year before. Infraero recorded negative operating cash flow of R$375.4 million, a R$207.9 million deterioration from 2024. The indicator matters because it measures a company’s ability to generate resources through its core business.

Operating margin shows further signs of weakness. Correios closed 2025 with a negative operating margin of 42.9%, its worst level since the indicator began deteriorating in 2022. Emgepron also stayed in negative territory, at negative 24.8%, followed by Infraero at negative 10.5%.

Operating margin reflects a company’s ability to service its financial debt and invest in its own growth. A negative margin leaves a state-owned company with limited capacity to fund its investment plans or even sustain operations, raising the likelihood of eroding shareholders’ equity or needing capital injections from the National Treasury.

The report also flags companies that lean more heavily on financial income than on operating revenue, like Emgepron, ABGF, Infraero, Codern, and Emgea, all show a high ratio of financial income to net revenue, a warning sign for the federal government.

According to the IFI, this pattern can point to a shortage of investment projects, low operating efficiency, or reliance on funds from earlier federal capital injections.

The report also shows the primary balance of federal state-owned companies steadily deteriorating. After posting a surplus equal to 0.06% of gross domestic product (GDP) in 2022, the group ran deficits of 0.02% of GDP in 2023, 0.07% in 2024, and 0.04% in 2025. On a rolling 12-month basis through May of this year, the deficit reached 0.07% of GDP.

In the institution’s assessment, the worsening fiscal and financial conditions at some companies raise the risk that Treasury-dependent state-owned companies will need supplementary budget allocations or capital injections, adding pressure to the federal government’s primary spending.

For companies that are not Treasury-dependent, the main risk lies in weaker cash generation and lower dividend payments to the federal government, along with the possible need for future recapitalizations.

Another risk identified is that state-owned companies may fail to repay loans backed by federal guarantees. In such cases, the National Treasury has to cover the debt, adding further pressure on public finances.

The IFI notes that the deterioration among state-owned companies is neither uniform nor driven by a single cause but says the data reveal patterns that warrant government attention.

Among Treasury-dependent state-owned companies, an analysis of shareholders’ equity, operating cash flow, and the cash adequacy indicator identifies another group with concerning financial conditions: Codevasf, CBTU, Embrapa, HCPA, and EBSERH.

“For these companies, it’s important to stress that the issue isn’t solvency in the traditional sense, since their existence depends on Treasury subsidies rather than their own cash generation. The real risk lies in the persistent mismatch between spending and transfers, which tends to translate into pressure for supplementary budget allocations or extraordinary capital injections, competing for fiscal space with other public policies,” the IFI explained.