{"id":96438,"date":"2025-10-31T11:29:53","date_gmt":"2025-10-31T14:29:53","guid":{"rendered":"https:\/\/murray.adv.br\/?p=96438"},"modified":"2025-10-31T11:29:53","modified_gmt":"2025-10-31T14:29:53","slug":"state-run-loss-machine-running-at-full-steam","status":"publish","type":"post","link":"https:\/\/murray.adv.br\/en\/state-run-loss-machine-running-at-full-steam\/","title":{"rendered":"State-run loss machine running at full steam"},"content":{"rendered":"
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Postal service\u2019s public meltdown exposes deep losses and political mismanagement<\/em><\/h6>\n<\/div>\n<\/div>\n
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10\/31\/2025\u00a0<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n

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Let\u2019s all pretend to be surprised: Brazil\u2019s postal service,\u00a0Correios<\/a>, is broke\u2014and taxpayers will bail it out. Who could have guessed? Warning signs have been flashing for the past three and a half years, ever since the same old management team retook control of the company.<\/p>\n<\/div>\n

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It\u2019s worth remembering that this was the same state-owned company and under the same political party where the Mensal\u00e3o corruption scandal first erupted, exposed by a photo on a magazine cover showing a not-so-republican cash exchange caught on hidden camera.<\/p>\n<\/div>\n

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What came next, with Petrobras and Eletrobras, made that modest bundle of cash seem almost nostalgic, revealing what looked like a recurring pattern of public-sector governance.<\/p>\n<\/div>\n

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This time, as far as is known, there has been no illicit transaction, just sheer incompetence, albeit of a highly destructive kind.<\/p>\n<\/div>\n

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Under normal circumstances, a company posting billions of reais in recurring losses would have long ago undergone a drastic internal restructuring to avert disaster. But these are far from normal circumstances. As usual, the priority hasn\u2019t been to ensure the company\u2019s financial health, but to use its structure for political accommodation.<\/p>\n<\/div>\n

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The \u201cgovernance\u201d of Correios essentially boiled down to splitting its executive board between Brazil Union and Workers\u2019 Party (PT). Fabiano Silva dos Santos, a lawyer linked to Prerrogativas, a group of left-leaning jurists known for opposing the Car Wash corruption investigation, was appointed to the helm by\u00a0President Lula<\/strong>. Though he listed a specialization in \u201cstrategic business management\u201d on his r\u00e9sum\u00e9, he had no experience running a company. He took over in February 2023, a month after Mr. Lula ordered Correios to be removed from the privatization program. Mr. Santos resigned in July after two and a half years of disastrous management.<\/p>\n<\/div>\n

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To clean up the mess, the government appointed a \u201ctechnical profile,\u201d as reported by the press: Emmanoel Rondon, a longtime executive from Banco do Brasil. Better late than never, even if the move was politically motivated\u2014perhaps by someone realizing the company was a ticking time bomb heading into an election year.<\/p>\n<\/div>\n

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The long delay in addressing the problem explains\u00a0the R$20 billion cost of the rescue operation<\/a>\u2014naturally guaranteed by the Treasury. The steep price tag is the result of reckless public asset management, a classic PT trademark, followed by the usual invocation of the \u201ccursed inheritance\u201d from the previous administration, in true Homer Simpson style: \u201cIt\u2019s my fault, and I\u2019ll blame whoever I want.\u201d<\/p>\n<\/div>\n

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Record deficits across federal state-owned companies\u2014excluding\u00a0Petrobras<\/a>\u00a0and public banks\u2014illustrate that Brazil\u2019s state-run loss-making machine is running at full speed. And the pace is expected to accelerate as the government expands subsidies and giveaways.<\/p>\n<\/div>\n

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Correios has been hemorrhaging publicly ever since the new management began releasing quarterly balance sheets, adopting the same disclosure model as publicly traded firms. By the end of June, the company had posted an operational loss of R$3.80 billion and a net loss of R$4.37 billion in the first half of 2025\u2014up 60% and 70%, respectively, from total losses in all of last year.<\/p>\n<\/div>\n

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These are by far the worst results in recent history. Since 2009, when Valor Data\u2019s records begin, Correios has reported losses in seven years, the largest until now being last year\u2019s\u2014soon to be surpassed by this year\u2019s figures\u2014and the second largest in 2015, during the recession. The unprecedented collapse has left the company\u2019s net equity\u2014its assets minus liabilities, the amount owed to its sole shareholder, the federal government\u2014in negative territory, amounting to an uncovered liability of R$8.72 billion.<\/p>\n<\/div>\n

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If Correios were listed on the stock exchange, its first-half revenue would place it alongside companies like CSN Minera\u00e7\u00e3o and auto parts maker Iochpe-Maxion. In terms of total assets (R$17.34 billion), it would sit between trailer manufacturer Randon and agricultural producer SLC Agr\u00edcola. But by net worth\u2014or rather, lack thereof\u2014it would be among less illustrious peers such as the Refinaria de Manguinhos (Refit), recently shut down by the National Petroleum Agency and Federal Revenue Service, and the once-dominant telecom operator Oi, now in bankruptcy protection.<\/p>\n<\/div>\n

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Surrounded by much larger competitors and weakened internally by \u201cthe managerial decay of extractive political appointments,\u201d as this newspaper\u2019s editorial aptly put it,\u00a0Correios can only survive<\/a>, in the view of economist Marcio Holland of Funda\u00e7\u00e3o Getulio Vargas\u2019s S\u00e3o Paulo School of Economics, if it changes both its business and corporate model\u2014bringing in private partners.<\/p>\n<\/div>\n

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The obstacle to that solution, however, may no longer be the PT\u2019s long-standing resistance to giving up control of \u201cits\u201d companies. The bigger challenge now is finding an investor willing to put money into a business that may already have lost its viability.<\/p>\n

*By\u00a0Nelson Niero\u00a0\u2014 S\u00e3o Paulo<\/p>\n

Source: ValorInternational<\/p>\n

https:\/\/valorinternational.globo.com\/<\/p>\n<\/div>\n

<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Postal service\u2019s public meltdown exposes deep losses and political mismanagement         10\/31\/2025\u00a0 Let\u2019s all pretend to be surprised: Brazil\u2019s postal service,\u00a0Correios, is broke\u2014and taxpayers will bail it out. Who could have guessed? Warning signs have been flashing for the past three and a half years, ever since the same old management team […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8106],"tags":[26563,26562],"class_list":["post-96438","post","type-post","status-publish","format-standard","hentry","category-murray-news","tag-exposes-deep-losses-and-political-mismanagement","tag-postal-services-public-meltdown"],"yoast_head":"\nState-run loss machine running at full steam - Murray Advogados<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/murray.adv.br\/en\/state-run-loss-machine-running-at-full-steam\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"State-run loss machine running at full steam - Murray Advogados\" \/>\n<meta property=\"og:description\" content=\"Postal service\u2019s public meltdown exposes deep losses and political mismanagement         10\/31\/2025\u00a0 Let\u2019s all pretend to be surprised: Brazil\u2019s postal service,\u00a0Correios, is broke\u2014and taxpayers will bail it out. 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