Companies have record profits
O Estado de S.Paulo 01/09/2008
The profitability of the Brazilian companies set a new record in 2007, according to a study released by Serasa yesterday. The profitability index - which measures profits in relation to net sales - had been 6.6% until last September, the highest value in ten years. In 2006, the index was at 5% and at 5.3%in the previous year. The survey was made with 9.6 thousand companies and the analysis per sector showed that the sector of services had the best result, with a profitability of 8.8%. The main reason for this good performance was the expansion of the salary mass of the Brazilian people and the increase of credit. The index was stimulated by the good results of what Serasa called "new businesses", such as the highway concessionaires. In 2000, the profitability didn't exceed 1.3%. The profitability in the industry was 8.2%, in comparison with 5.5% in 2006. "We saw many investments and new businesses in 2007, which pushed the sector, with prominence for the steel industry", said Serasa's manager of Sectorial Analysis, Marcos Abreu. In commerce, the profitability was not so high, reaching 1.9%. "In spite of the abundant offer of credit and the salary increase that leveraged other sectors, commerce historically works with smaller margins, for competition very is strong." Abreu believes that this year the companies will continue having high profitability, however not as much as in 2007. "There will be the maintenance of jobs and credit, but the interest policy and several other factors will break this movement a little", he said. Another point the manager highlights is the improvement in the management of the Brazilian companies. The sequence of IPO's that occurred in the Country forced many companies to improve their administration and become more transparent.