Companies | Profitability of companies with foreign participation grows, which sector leads? | Economy | Management | economy

However, this is the lowest result of the year. In the first quarter, the profits of these companies totaled USD 4,505 million, while in the second quarter the amount was USD 3,890 million.

However, the results obtained throughout 2023, excluding the three years of the pandemic, are above the historical average for this indicator.

read more: Companies Earn Less Than Expected in Third Quarter, What’s Surprising?

to Juan Carlos Odar, Director of Construction ConsultantsThe result is distorted by the effects of inflation. “Really, it’s similar to last year. In the fourth quarter, as inflation moderates here and in the U.S., it will continue to slide downward.”He points out.

Mining

According to BCRPBy 2022, the recovery is concentrated in the mining sector. “In the context of rising international copper prices, reductions in key production costs (fuels) and high slack in the international production chain.”

In addition, the profits of mining companies with foreign participation were boosted by the operations of a project that came into operation in 2022 (Quellaveco), as well as the sale of cargo.

In the third quarter, they added 1,194 million US dollars, 303 million US dollars more than the same period in 2022, but less than 213 million US dollars from the previous quarter.

read more: Shareholders will receive S/ 34.7 billion in dividends, who will receive the most?

According to National Institute of Statistics and Informatics (INEI) data, between July and September, grew up Extraction of minerals and related services due to high production levels of molybdenum, tin, iron, lead, copper, zinc and gold. However, silver production has declined.

Metal mining grew 8.9% in the period and a cumulative growth of 10.9% between January and September. In particular, national copper production grew by 16.1% in the first nine months of the year, driven by the start of operations at Quellaveco, a mine that displaced Las Pampas as the fourth largest copper producer in Peru.

The result is in line with the performance of mining companies listed on the Lima Stock Exchange (LSE) in the third quarter, as they achieved higher profits than estimated by the market.

“As copper and oil prices continue to decline, there will be a definite correction. But the Quellaveco effect isn’t going to take it back to its pre-pandemic levels. Also, copper prices remain above historical averages. Next year we will see a stabilization“Isaac Fonkinos explains, Senior Economist at Macroconsult.

read more: Private investment moderated, but accumulated five negative quarters.

Other fields

In the third quarter, only mining and energy companies posted higher profits compared to the same period in 2022. Hydrocarbon companies reported US$153 million less than the third quarter of 2022 and US$25 million less than the second quarter of 2023.

According to BCRPAffected by low international fuel price quotations. “Notably, international oil prices fell from US$93 to US$82 per barrel on average between the third quarter of 2023 and the same period last year; gas prices fell from an average of US$530 to US$138 per cubic meter over the same period.A report by the Monetary Authority says.

Profits in the services sector reached USD 998 million, down USD 43 million compared to the same period in 2022.. However, there is a strong correction from the immediately preceding quarter, when profit for the period was US$1,426 million.

read more: Periods of contraction of the Peruvian economy and how it recovered.

Reinvestment?

Increased profitability of firms with foreign participation is unlikely to translate into higher levels of private investment. As is known, this indicator has been falling for five consecutive quarters against the backdrop of economic slowdown, political uncertainty and low business confidence.

In fact, this year companies listed on the Lima Stock Exchange (LSE) are expected to distribute S/34.7 billion in dividends to their shareholders.

“Reinvestment, because of less profitability, will decrease. “Firms are asking for less investment, especially in sectors related to internal demand.”Adds Foinquinos.