Brazilian CVRD profit drops by currency rates influence
Brazilian company Companhia
Vale do Rio Doce (CVRD) announced a net profit of Real 502million for the first nine months of year 2002. This figure reveals a sharp decline compared to the Real 2.41billion in the same period of year 2001. Ironically, the
iron ore and pellet sales of the company boosted with a total of 107 million tons in the January-September 2002 period up from the total volume of 96 million tons recorded in the year 2001, with approximately 85% of this total exported, despite the decreasing net profit. This situation is seen as the inevitable result of the depreciation of Brazilian currency.
Gross sales revenue in January-September 2002 period reached Real 5.78 billion, with an increase of 20.3% on the same 2001 period, while third quarter sales alone amounted Real 2.34 billion, with an increase of 27% on second quarter, proving the strong market demand. Furthermore the net debt of the company is reduced from the end June 2002 figure of $2.4 billion down to $2.1 billion by the end of September 2002, as explained by the company officials.
The company officials express that they expect the world economic growth to continue moderately in 2003 with doubts on US recovery and European markets together with uncertainties regarding
Japan. Furthermore a further growth slightly above this year's 4.5% growth in the steel industry is expected.
Comparatively less volatile exchange rates and a more reasonable macroeconomic climate is desired in the coming year for
Brazil.