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SÃO PAULO – Adjusting after the holidays and reflecting the scenario of greater global risk aversion with increasing tensions between the US. USA And China, the session is closed for the Ibovespa.
Also pay attention to the repercussion of the results season. Gol’s shares (GOLL4) fell sharply, up 11%, after the company released unaudited data for the first quarter, declaring it will reveal its audited numbers on May 15, 2020. Azul’s (AZUL4) documents also register a strong fall
Gol had adjusted earnings for non-recurring results, gains and losses in Exchangeable Notes and an exchange variation of R $ 173.2 million in the first quarter, an increase of 76% in the annual comparison base. This is because the adjusted result excludes the negative change and the monetary variation of R $ 2.53 billion, non-recurring results of R $ 87.5 million in income and expenses of R $ 17.9 million related to the results Unrealized Notes and Limited Calls. However, with the effects, the loss was multimillion, of R $ 2.26 billion.
Embraer’s roles (EMBR3) They also drop about 10%. According to Valor Econômico information, BNDES must invest at least US $ 1 billion to buy shares to be issued by Embraer. The aircraft maker was negotiating a partnership (joint venture) agreement with Boeing, but the American pulled out, causing EMBR3 assets to drop 9.33% in April (see more by clicking here).
BB Seguridade (BBSE3) also published a balance for the first quarter of 2020 this morning and reported a net profit of R $ 882.7 million in the period, a decrease of 12.9% compared to the same period last year. Assets are also low.
Among the biggest increases, attention should be paid to Vivo (VIVT4), which received the recommendation from Credit Suisse. Take a look at the highlights:
BB Security (BBSE3)
BB Seguridade published its results for the first quarter of this year and reported that it had an adjusted net profit of R $ 882.7 million, a decrease of 12.9% compared to the same period in 2019. According to the insurer, the decrease it occurred due to financial result, negatively influenced by the reduction of the Selic rate.
“There were market losses to the market in long fixed-rate securities and due to the delay in updating the assets and liabilities of defined benefit pension plans,” the company said. BB Seguridade reported that, although the net profit fell, there was a 19.6% expansion in the combined net operating income of the group companies, “driven mainly by the reduction of the loss ratio in insurance operations and by the good commercial performance in rural insurance, credit life insurance and the collection of pension plans ”.
Total volume of insurance premiums, social security contributions and savings bond sales revenue increased 19% during the first quarter of last year, to R $ 13.3 billion in the first quarter of this year. According to BB, this expansion movement stopped in mid-March, after the Covid-19 pandemic reached Brazil. According to the company, due to the pandemic, BB Seguridade decided to suspend its orientation for 2020. Another highlight in the results was the drop of 7.4 percentage points in the loss rate in the quarter. According to BB, there was also a 25% expansion in the volume of contributions to social security. The insurer reported that it ended the quarter with PGBL and VGBL reserves totaling R $ 275.5 billion.
Morgan Stanley bank called BB Seguridade’s first quarter results “weak.” According to the bank, net income came in below estimates, which were R $ 1 billion. On a positive note, Morgan Stanley believes that the operating results of Brasilseg and Brasilprev, BB’s subsidiaries, were stronger in the first quarter. As negative aspects, it evaluates that in BB Corretora the net profit fell 41% annually to R $ 12 million in the quarter, 54% below the Morgan Stanley projection.
Gol Linhas Aéreas published a balance for the first quarter of 2020 and reported a net loss of R $ 2.26 billion in the period. The result is not adjusted and has not been audited.
Before the coronavirus epidemic, the company was affected by the variation in the exchange rate and the sharp drop in the real against the dollar, with an impact not only on fuel prices, whose expenses increased from R $ 995.2 million in the first quarter of 2019 to R $ 1 billion in the same period this year, but mainly due to a 225.7% increase in the price of maintenance and repair material and parts, from R $ 44.3 million in the first quarter of 2019 to R $ 144.3 million in the 1st. quarter of this year.
“Net financial expense was R $ 3.2 billion, an increase of R $ 2.8 billion compared to the first quarter of 2019, mainly due to the exchange rate variation in the period, which resulted in losses of R $ 2, 4 billion more than in the first quarter of 2019, ”explained Gol.
Gol operates only on Boeing aircraft imported from the United States. Expenses with the ICMS on fuel increased by 7.1%, to R $ 902.1 million in the first quarter of 2020. Gol’s profit before taxes, interest, depreciation and amortization (Ebitda) was R $ 1, 43 billion in the first quarter, an increase of 51.3% over the same period last year.
The Ebitda margin, according to the company, increased from 29.6% in the first quarter of 2019 to 45.7% in the first quarter of 2020. Gol reported that it will not release a guide for 2020, due to the uncertainty caused by the epidemic of coronavirus. In mid-March, the company readjusted its air network, with an approximate 90% reduction in domestic flights.
However, Gol announced that total revenues are expected to reach R $ 900 million in the second quarter compared to R $ 3.1 billion, 70% less. The company expects a recurring Ebitda margin of approximately 6% versus 25.9% in the second quarter of 2019. Total expenses are expected to decrease approximately 50%.
The company estimates a net debt / Ebitda ratio of 2.9 times at the end of the second quarter. The average operating fleet of 27 aircraft is expected to have an occupancy rate of approximately 80%.
Gol says it is “maintaining a minimum use of cash” and estimates that its cash preservation measures implemented during March will retain approximately R $ 2.4 billion during 2020. The airline had approximately R $ 7 billion in liquidity sources on December 31, March. The company said it reduced capacity by approximately 80% in the second quarter of 2020 (75% domestic and 100% international) with the expectation of a sequential contraction of Brazilian GDP by at least 5% in the quarter.
According to Bruna Pezzin, analyst at XP Investimentos, the company performed slightly above expectations in the first quarter, mainly due to (i) higher-than-expected growth in the line of other income (~ 16% above our estimate) and (ii) lower unit costs (CASK) than expected (6% less than our number).
The results were positively impacted by a profit of R $ 595 million in sale and lease operations (which XP predicted in R $ 500 million) and there was also a non-recurring refund of R $ 193 million due to the closure of the MAX aircraft. The EBIT margin was 32.6% (4 p.p. above ours) and the EBITDA margin was 48.5% (also 4 p.p. above). Excluding the two mentioned effects, the EBIT margin would be 7.5%, 0.6 p.p. below that estimated by XP.
“Gol ended the quarter with a healthy position of cash and cash equivalents and, although the Guide is still suspended, management provided an indication of the expected reduction in cash burn during the second quarter (to R $ 9 million / day until June, compared to the current R $ 22 million / day) ”, he points out.
The analyst points out that, in general, the results for the first quarter already partly reflect the impacts related to the reduction in demand and the more restrictive policies of social distance, as well as a devalued exchange rate.
“We believe that the focus from now on will be on managing the company’s liquidity, as well as on the flow of news related to the BNDES line of credit and on the evolution of social distance policies in Brazil. We maintain a neutral vision of the shares, with a target price of R $ 17 per share, ”says Bruna.
Klabin registered a loss of R $ 3.1 billion in the first quarter of 2020, compared to negative R $ 196 million in the same period of 2019.
Net income, on the other hand, increased 4%, from R $ 2.4 billion to R $ 2.5 billion, while adjusted EBITDA increased 2%, to R $ 1 billion.
The company’s net debt, in turn, went from R $ 12.7 billion to R $ 20.3 billion, an increase of 60% on the same basis of comparison.
Banks Bradesco BBI and Itaú BBA rated Klabin’s results as “as expected.” According to BBI, the company presented a solid set of results, despite the loss of R $ 3 billion in the first quarter. “The Ebitda of R $ 1.03 billion reached 3.5% above our estimate. Pulp sales were solid, at 383 thousand tons ”, commented BBI, evaluating as a negative aspect that net debt increased from R $ 14 billion in the fourth quarter of 2019 to R $ 20 billion in the first quarter of this year, due to the devaluation of the real against the dollar. According to BBI, Klabin’s net debt to Ebitda ratio is 5.5 times (5.5x).
Itaú BBA evaluated Klabin’s results as “Neutral”. The bank noted that the company increased paper exports by 35%; Although pulp exports have also grown, BBA recalls that prices in the international market fell below
Copasa had a net profit of R $ 160,835 million in the first quarter of 2020, 13.9% less compared to the R $ 186.73 million registered in the same period of 2019.
Ebitda increased 7.3%, to R $ 474.9 million compared to R $ 442.5 million in the first quarter of 2019. The Ebitda margin decreased by 0.3 percentage points, to 38.1%. In adjusted terms, the margin remained stable, at 39.7% in the annual comparison. Net income, in turn, increased by 5.6%, to R $ 1.3 billion.
Banco Itaú BBA rated Copasa – Companhia de Saneamento de Minas Gerais as “stronger than expected.” “Copasa showed a strong cash generation of R $ 165 million. Adjusted Ebitda was R $ 505 million, 9.8% more than the first quarter of last year and above our projections, “said BBA.
The bank commented that Copasa obtained better results because it began to collect wastewater collection rates in five municipalities of Minas Gerais, with 56,000 households and commercial establishments that began to be served, after the work carried out last year. BBA pointed out, as a negative aspect, that Copasa has 11% of its gross debt in foreign currency and without coverage. BBA noted that Copasa will resolve before June 17 the amount of dividends to be paid to shareholders, due to the impact of the Covid-19 crisis. BBA maintains its degree of performance in the market: market average for CSMG3 shares, with a target price of R $ 64.00 for 2020, an increase of 33.3% compared to the current R $ 48.00.
Credit Suisse, on the other hand, called Copasa’s results “worse than expected.” According to the CS, there was a drop in volumes and earnings suffered from weaker financial results. The CS comments that Copasa did not interrupt the water supply of customers with accounts in arrears in March and April, due to the coronavirus epidemic. The bank predicts that this could affect the state company’s mining results later.
Petrobras said it broke a record for oil exports in April, with a daily volume of 1 million barrels. According to the state company, the previous record was reached in December last year, with 771 thousand barrels exported daily. The company emphasized that the result was obtained in an adverse scenario in the world market, with the coronavirus epidemic, which reduced oil consumption, and the price war that broke out in March between Saudi Arabia and Russia. “Due to the sharp drop in demand in the domestic market, Petrobras is directing efforts to increase exports, after meeting domestic demand,” the company said in a statement.
“We are attentive to international movements and access to all markets. Our oil, with low sulfur content, continues to appreciate in the international market, in accordance with the IMO 2020 specifications, ”explained Anelise Lara, director of Refining and Natural Gas at Petrobras. According to the company, China absorbed 60% of exports in the first four months of 2020. Compared to the same period in 2019, exports grew 145%. Anelise Lara comments that Petrobras hopes to keep up, now driven by the Asian giant’s economic recovery. Petrobras also exports oil to the United States, Europe, India, and Southeast Asia.
Even in the sector, Bradesco BBI considers that the information that the federal government may increase the Cide (Contributions for intervention in the economic domain) from R $ 0.10 to R $ 0.30 today is negative for distributors and importers of fuel in Brazil, although it is positive for ethanol producers. According to BBI, the increase in Cide will harm distribution because it will increase the price of gasoline in refineries, while tending to increase the price of imported fuel. “The possible increase is beneficial for alcohol plants, although the increase of 20 cents is less than the 40 cents requested by the sugar sector,” BBI evaluates.
Telefônica Brasil (VIVT4)
Credit Suisse raised Vivo’s recommendation from neutral to superior, noting that shares fell 12% in the past two weeks, while the stock market rose 2% with the interest rate stable. “Despite our view of weak results, in this assessment, most of the slowdown already has a price,” analysts say.
Enel São Paulo (ELPL3)
Enel São Paulo, the largest electricity distributor in Brazil, released its results for the first quarter of 2020 and reported a net profit of R $ 115.2 million in the period, an increase of 124.8% compared to the same period from last year.
The distributor’s net income, which serves the capital of São Paulo and 26 other municipalities in the metropolitan region, was R $ 3.66 billion in the first quarter of 2020, an expansion of 5.6% compared to the same last year’s period.
Earnings before taxes, interests, depreciation and amortization (Ebitda) increased to R $ 532.6 million, an increase of 33.5% compared to the same quarter of 2019. Enel São Paulo’s Ebitda margin advanced from 11.5 % to 14.5% in the first quarter of 2020. Enel São Paulo reported that it ended the quarter with 7.36 million clients, of which 6.9 million are captive residential market. There was an increase of just over 100 thousand clients in the residential market, an expansion of 1.6% compared to the first quarter of 2019.
The company lost clients in the industrial market, a decrease of -1.1% to 25.6 thousand clients, while there was a small gain in the commercial market of 1.6%: Enel SP ended the first quarter distributing energy to 410 thousand commercial establishments. However, it noted that there was a 4.5% drop in energy sales in the concession area in the first quarter of this year, compared to the same period of the previous year, to 10.6 thousand gigawatt hours.
According to the company, the fall was due to two factors: the summer of 2020 was the rainiest in recent decades, with below-average temperatures; and the coronavirus epidemic, which started in March, reduced consumption, mainly in the industrial segment (-14.9%) and in the commercial segment (-10.4%). Enel São Paulo’s net debt decreased 4% in the first quarter of 2020, to R $ 4 billion. The net debt to Ebitda ratio decreased from 3.37 times (3.37x) in the first quarter of 2019 to 1.61 times (1.61x) in the first quarter of this year. It is worth noting that the Italian company Enel, which controls Enel São Paulo, closed the company’s capital at B3 in November 2019, repurchasing all ELPL3 shares of the former Eletropaulo.
Login (LOGN3)
Log-In, the logistics and maritime transport operator, received and commissioned the container ship Endurance on May 1, which will carry out routes between ports in the northeast, southeast and south of Brazil and Argentina. The ship has the capacity to transport 2,700 containers and the company paid US $ 13.1 million, approximately R $ 60 million in March, for the ship. The Endurance was built in a shipyard in China and replaced an old ship that was returned to the charterer.
Log-In reported that Endurance is its sixth ship of its own and completes the fleet. “The start of operations concludes the asset recovery plan, with the company that now owns 6 of its own vessels,” explained Log-In.
The Nova Dutra Concessionaire (from CCR) reported that between April 24 and 30, there was a 51.4% drop in passenger vehicle traffic and a 19.8% drop in commercial vehicle traffic, which passed through the section BR-116 between São Paulo and Rio de Janeiro, adding a general drop of 31.7% in the circulation of payment vehicles. The comparison is approximately the same period of 2019. In the accumulated from January to April this year, traffic in Nova Dutra fell 9.5% compared to the first four months of last year.
According to Valor Econômico information, BNDES must invest at least US $ 1 billion to buy shares to be issued by Embraer. The aircraft maker was negotiating a partnership (joint venture) agreement with Boeing, but the American pulled out, causing EMBR3 assets to drop 9.33% in April (see more by clicking here).
According to the newspaper, the speech will be that Embraer has been the victim of Boeing’s betrayal and needs to recover to be sold. Valor points out that the plan is not for the federal government to control the company again, but rather to seek liquidity to overcome the crisis caused by the coronavirus.
Eneva (ENEV3) and AES Tietê (TIET11)
AES received a response from B3, which said it would not interfere in a dispute with Eneva. In response to AES, B3 says the purpose of a letter dealing with the interpretation of a voting item was not to interfere in a corporate dispute or take up the defense of any particular shareholder or group, according to a statement issued by AES Tietê.
AES said B3’s opinion directly interferes in a dispute with Eneva. In the statement, B3 says that the interpretation that it must spontaneously submit the interpretation and application of its rules to arbitration, except in the case of omitted cases, unforeseen or exceptional situations, is not based on
regulation and cannot prosper.
B3 affirms that, as it is true that there was no omission or situation not foreseen in the Level 2 regulations, the Director of Issuers is competent to sign letters of interpretation and guidance to the market.
The “interpretation was adequately reflected and supported and, as it is not a regulatory change, does not require consultation with all companies listed in Tier 2”.
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