Top 25 Brazilian Sales: A Global List

Nov. 30, 2009 10:24 AM ETEWZ, PBR, CBD, VALE, VWAGY, SHEL, BG, CRRFY, TEF, WMT, BAK, TBH, F, MT, STLA2 Comments
David Hunkar profile picture
David Hunkar

The Brazilian market index Bovespa is one of the top performing emerging market indices this year. The index is up 142% in dollar terms since the start of this year. Gains are amplified in dollar terms since the local currency Real has appreciated by over 26% this year.

The world’s five largest companies by 2008 revenues are Royal Dutch Shell (RDS.A, RDS.B), Exxon Mobil (XOM), Wal-Mart (WMT), BP and Toyota (TM) according to Forbes. The oil giant Royal Dutch Shell’s revenue totaled $458B while ExxonMobil raked in $425B. The world’s largest retailer Wal-Mart had total sales of $405B. Revenue matters since with high volumes companies can make billions even with a low profit margin. For example, though Wal-Mart’s sales exceeds $400B, its profit margin is just 3.3%. This translates to a cool $13.4B in profits. Despite the low-profit margin, Wal-Mart is one of the top companies in the world and the stock is owned by millions of investors.

One way to reduce the risk of investing in emerging market equities is to go with the largest companies by sales or profit margin. The 25 companies by sales in Brazil in 2008 are listed in the table below:

S.No. Company Sector Control Total Sales (US $ Mil.)
1 Petrobras Energy Brazilian 92,409
2 Br Distribuidora Wholesale Brazilian 28,888
3 Vale Mining Brazilian 15,296
4 Volkswagen Auto German 14,414
5 Fiat Auto Italian 11,452
6 Ambev Consumer Belgian 11,239
7 GM Auto American 10,731
8 Shell Wholesale Anglo-Dutch 10,191
9 Bunge Consumer Dutch 10,112
10 Carrefour Retail French 9,978
11 Ipiranga Wholesale Brazilian 9,854
12 Telefonica Telecom Spanish 9,652
13 Telemar Telecom Brazilian 9,141
14 Live Telecom Luso-Spanish 8,823
15 Wal-Mart Retail American 7,528
16 Braskem Chemicals Brazilian 7,161
17 Sugarloaf Retail Franco-Brazilian 6,411
18 Brazil Telecom Telecom Brazilian 6,393
19 Cargill Consumer American 6,207
20 Tim Cellular Telecom Brazilian 6,206
21 CSN Steel Brazilian 6,155
22 Ford Auto American 6,128
23 Mercedes Auto German 6,111
24 Casa Bahia Retail Brazilian 6,039
25 ArcelorMittal Steel Anglo-Indian 5,954

Source: Exame

Petrobras and Br Distribuidora are the only state-owned companies in the above list. The oil giant Petrobras (PBR) had total revenues of $92B in 2008 and a total profit of $14B. This placed the company in the 25th rank just below StatoilHydro (STO) of Norway in the Forbes Global 2000 list. Brazil has 12.6 billion barrels of proven oil reserves, the second-largest in South America after Venezuela according to a report in the Oil and Gas Journal (OGJ). Since Petrobras controls most of the oil production in Brazil, Petrobras holds a strong potential for future growth. Some of the other Brazilian companies in the list include mining giant Vale (VALE) and Braskem (BAK).

An interesting takeway from the rankings is that 15 of the largest 25 companies in Brazil are foreign-owned. Automakers Volkswagen, Fiat, Mercedes, GM and Ford have a strong presence in Brazil with sales exceeding $6B each in 2008. In addition to GM and Ford, American companies Wal-Mart and Cargill also have strong sales in Brazil. The French retailer Carrefour is well ahead of Wal-Mart in market share and sales.

This article was written by

David Hunkar profile picture
David Hunkar (pseudonym) holds a Masters Degree in Finance and Economics. He is a part-time consultant for a financial consulting firm where he manages portfolios for manages portfolios for self and family. He has been an investor for the past ten years. David focuses on foreign stocks trading in the US markets including the OTC market. He concentrates on high dividend yield and dividend growth stocks. ETFs are his another favorite investment vehicle. In addition to his contributions here at Seeking Alpha, you can also visit him at his blog
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