15 May 2009 Edition | Brazil Economic Scan

15-May-2009

Brazil Economic Scan

In this edition: Brazil retails sales up 1.8% in March, Oi's profit drops on acquisition and marketing expenses, Fitch affirms Brazil at BBB- stable, Sadia has quarterly loss on interest and futures costs, Brazilian stocks rise.

Top headlines

Brazil Retail Sales Rose 1.8% in March From Year Ago

• Brazil’s retail sales rose less than expected in March as consumer reined in spending after Latin America’s biggest economy had its sharpest economic contraction on record in the last quarter of 2008.
• Retail sales rose 1.8 percent in March from a year ago, the national statistics agency said today in a report distributed from Rio de Janeiro. Economists expected sales to rise 2.2%, according to the median forecast in a Bloomberg survey of 31 analysts. (Bloomberg)

Oi’s Profit Drops on Acquisition, Marketing Expenses

• Tele Norte Leste Participacoes SA, the Brazilian carrier operating under the Oi brand, said first- quarter profit plunged because of acquisition costs and increased spending to attract customers in new markets.
• Net income fell 98% to 11 million reais ($5.28 million), or 3 centavos a share, from 569 million reais, or 1.49 reais, a year earlier, the company said today in a regulatory filing. The carrier, Brazil’s largest phone company, said revenue rose 3.5% to 7.49 billion reais. (Bloomberg)

Fitch Ratings Affirms Brazil at 'BBB-'; Outlook Stable

• Fitch Ratings today has affirmed Brazil's long-term foreign and local currency sovereign Issuer Default Ratings (IDR) at 'BBB-'.
• The Rating Outlooks on the long-term IDRs are Stable. At the same time, the agency has affirmed Brazil's short-term foreign currency IDR at 'F3' and the Country Ceiling at 'BBB'. (Brazilian-American Chamber of Commerce)

Sadia Has Quarterly Loss on Interest, Futures Costs

• Sadia SA, Brazil’s second-biggest food processor, posted a first-quarter loss after interest payments surged and it lost money on futures contracts.
• The consolidated loss was 239.2 million reais ($114.3 million) compared with a profit of 248.3 million reais, or a year earlier, Concordia, Brazil-based Sadia said today in a statement to the country’s securities regulator. Net sales rose 8.1% to 2.46 billion reais. (Bloomberg)

Brazil Stocks Rise on Profit, Sadia Speculation; Merval Falls

• The Bovespa index added 1.6% to 49,446.02. The BM&FBovespa Small Cap index rose 2.3%. Mexico’s Bolsa index added 1.1%, while Chile’s Ipsa gained 0.7%.
• Cia. Energetica de Sao Paulo climbed the most in the Bovespa index after Credit Suisse Group AG said earnings beat estimates. Ultrapar Participacoes SA rose 2.9% as Itau Corretora said first-quarter profit was “resilient” and topped its projection. Sadia SA gained after being raised to “hold” at Raymond James & Associates Inc. on the likelihood of a merger with rival foodmaker Perdigao SA. (Bloomberg)

Source: Brazil Economic Scan