Exports, fast recovery drive business results in 2020
Brazilian publicly traded companies' full-year results show they went through one of the worst crises ever. But despite serious casualties, the combined situation in December was better than at the end of 2019, before the start of the pandemic that has already killed more than 2.8 million people worldwide and continues to be a threat to the economy, especially of the poorest countries.
The sample of 339 companies compiled by Valor Data shows that, in general, they are prepared, at least financially, to face a new and harsher wave of the pandemic. The fourth quarter had already been excellent and they kept the pace in January and February, until the worsening of the crisis in March brought back uncertainties about the return to normality.
The combined revenues of these companies totaled R$2.07 trillion in 2020, while operating profit was R$240 billion and net profit reached R$60 billion. Petrobras and Vale were excluded to reduce distortions - in the fourth quarter alone, the state-owned oil company reported a profit of R$59.89 billion, the equivalent of all other companies for the year.
Exports, products with prices in dollars and federal emergency aid, which propped up domestic consumer spending, gave companies in several industries the necessary steam to end 2020 with a sales revenue 10% higher than in 2019, easily beating last year's inflation of 4.52%. Valor has been following the results of listed companies since 2000, and it is possible to say that, with a certain regularity, their revenues usually are not far from double-digit growth adjusted by inflation. At the worst moment, in 2016, the year when President Dilma Rousseff was impeached and GDP fell 3.6%, sales of these companies grew 1.5%.
But sustained sales are not the only surprising factor. The companies kept costs and expenditures in check, which resulted in an operating profit 15% higher, a clear sign of strength. Of course, there is a social cost to this bill - people lost their jobs to make the companies' ends meet. The IMC restaurant chain, which operates in one of the sectors hardest hit by the crisis, with brands like Frango Assado and Pizza Hut, closed 2020 with 2,000 fewer employees in Brazil compared to 2019, a 40% cut. "It was certainly the most challenging year in IMC's history," says the management team's message accompanying the company's results released at the end of March. "The advent of the Covid-19 pandemic and the restrictions adopted by governments in each...
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