The profits of Brazil’s six main state-owned companies last year will mean R$46 billion in primary revenue for the federal government, according to the calculations of the Economy Ministry. In 2021, Petrobras, Banco do Brasil, Caixa Econômica Federal, Brazilian Development Bank (BNDES), postal company Correios and power utility Eletrobras reported a positive net result of R$186 billion, as calculated by the ministry after the end of the companies’ meetings, in the last week of April.
Part of that amount was already paid by Petrobras last year. Even so, the federal government is expected to receive the largest portion this year.
“In a normal process, the money is expected to come in this year,” a source within the economic team said. “Sometimes the company withholds dividends. It approves them, but if it lacks cash, it withholds dividends to pay later, when the situation improves.”
Petrobras alone accounted for R$107 billion of last year’s R$186 billion combined profit. But the source says that even not taking into account the oil company’s data, the total profit “is a great result.”
“It’s about stability, more than the figure. It’s been a few years now that we have only positive results in almost all companies. It is no longer so common variations between positive and negative spread across the portfolio,” the source said, citing overhauls started during the Michel Temer administration, such as the Law of State-owned Companies. “Some companies are still unable to break even, but they are small and have acute, historical problems.”
Three other companies appear in an intermediate group in terms of results: BNDES, with net income of R$34.1 billion, Banco do Brasil (R$21 billion) and Caixa Econômica Federal (R$17.3 billion).
But the source also highlighted the performance of Eletrobras and Correios, two companies with lower profits (R$5.7 billion and R$1 billion, respectively) that Economy Minister Paulo Guedes often classify as having good chances of being privatized. “Correios has turned results around,” the source said, recalling losses in previous years.
The most recent projection of the Economy Ministry, presented in a report of primary revenue and expenditure for January and February, was that the collection of dividends and participation would reach R$39.2 billion this year. The figure was revised in relation to the estimate of the annual budget law, approved at the end of 2021, which was R$26.3 billion. The report for the March-April period, with possible new projections, will be released next week.
Last week, President Jair Bolsonaro (Liberal Party, PL) again criticized Petrobras’s pricing policy, saying that the R$44.5 billion profit reported by the company in the first quarter of this year was “a crime” and “a rape.” The result, driven mainly by the high oil prices in the international market, was 38 times – or 3,718% – higher than the one seen in the same period of 2021. On Monday, the oil company raised the price of diesel at the pump by 8.87%.
/i.s3.glbimg.com/v1/AUTH_37554604729d4b2f9f3eb9ad8a691345/internal_photos/bs/2021/l/z/8uAbs9QsGfeKxTOvdrYA/alexandremanoel-gr-3.jpg)
Alexandre Manoel, chief economist at AZ Quest Investimentos, says that the total payment of dividends to the federal government in 2022 is expected to exceed the estimates presented so far by the Economy Ministry. “For Petrobras alone, we expect the dividends paid to the federal government to be above R$60 billion,” he said. He points out that the ministry’s calculations are typically more conservative and that AZ Quest’s projections also take into account the oil company’s figures for the first quarter of this year.
Mr. Manoel also recalled that, due to the spending cap, which limits growth in public spending to the previous year’s inflation, a better-than-expected performance in tax collection tends to improve the primary result, the main measure of the situation of public accounts. The asset manager also has a “conservative” projection for this year, of a primary deficit of R$37 billion. But if the AZ Quest equity analysts’ estimates for the performance of Petrobras are considered, “it is very likely that the federal government will have a positive primary result.”
In addition to commodity prices in the international market and the lower exchange rate, Julia Braga, an economist and professor at the Fluminense Federal University, cites another reason for the “substantial” profits reported in 2021 by large state-run companies: the “historically low cost of labor” in the country.
“Labor income indicators are stagnant or even lower in real terms than in 2012,” she said, citing figures from the Brazilian Institute of Geography and Statistics (IBGE).
Gabriel Leal de Barros, a partner and chief economist at Ryo Asset, estimates that the federal government will receive R$41 billion in dividends in 2022, but says that the adjustment made by Petrobras on Monday means that collection could be even higher.
Source: Valor International