By Brazil Stock Guide – Brazilian corporates closed the third quarter of 2025 with a mixed picture: while revenue and EBITDA exceeded BTG Pactual’s estimates, net profit undershot expectations and fell sharply year-over-year. Excluding Petrobras and Vale, consolidated revenue rose 10% and EBITDA increased 7% versus 3Q24, but net profit plunged 22%, weighed down by a steep jump in financial expenses under a 15% average Selic rate — up from 10.5% a year earlier. Adjusting for major one-offs in 3Q24, particularly at Vibra, Sabesp and Cemig, profit still dropped 11% year-over-year.
The bank notes that companies focused on the domestic market delivered stronger operational prints than the consolidated universe. Domestic revenue beat estimates by 3.7%, EBITDA by 2.1% and net profit by 2.1%. Compared with last year, revenue surged 17% and EBITDA grew 10%, though net profit still contracted 16% as elevated borrowing costs compressed margins and widened the gap between operational and bottom-line performance.
BTG argues that the quarter reinforces a dominant theme in 2025: resilient operations but a punishing interest-rate environment that continues to erode margins across consumer, utilities, healthcare, education and concession-heavy sectors. Even companies with solid cash generation saw earnings heavily affected by repricing delays in debt portfolios and higher financial expenses.
Across sectors, 14 of the 17 industries covered by the bank posted annual revenue growth. The strongest was Food & Beverages, which added R$ 21.2 billion (+11%), driven by JBS with a R$ 12.6 billion revenue increase on the back of firmer prices and higher beef and poultry volumes. Retail also expanded, with a 5% revenue gain supported by SmartFit (+28%) and Raia Drogasil (+13%), though BTG highlights that demand remains uneven and credit costs remain elevated.
Real estate delivered another strong quarter, with revenue up 15%, led by low-income homebuilders boosted by the Minha Casa, Minha Vida program. Cury (+34%), Direcional (+27%) and Tenda (+24%) were the standouts. Agribusiness, however, was the worst performer in revenue, falling 13% (–R$ 10.6 billion), reflecting weaker commodity prices and post-cycle normalization.
In EBITDA, Mining & Steel was the top performer, adding R$ 1.9 billion (+25%). CSN, CMIN3 and Aura — which grew 91% amid higher gold prices and stronger output — led the expansion. Car Rentals & Logistics also delivered strong numbers: Movida grew EBITDA by 19% and Localiza by 7%, supported by resilient pricing, volume recovery and robust used-car margins. The sector has continued to raise prices to restore ROIC spreads in a structurally higher rate environment.
Despite leading in revenue growth, Food & Beverages posted the steepest EBITDA decline (–R$ 1.6 billion, –6%). JBS accounted for the bulk of the deterioration, reporting a 16% EBITDA drop driven by higher costs and softer margins in certain proteins.
Net profit showed the broadest deterioration. The three sectors dragging the most were Utilities (–R$ 8.9 billion), Oil & Gas (–R$ 4.3 billion, ex-Petrobras) and Banks (–R$ 2.9 billion). Sabesp and Cemig were heavily affected by the absence of extraordinary gains recorded in 2024, while the Oil & Gas sector saw a sharp year-over-year decline due to a nearly R$ 4 billion tax credit recognized by Vibra in 3Q24 that did not recur.
Among financials, Itaú posted an 11% profit increase, but the sector’s overall result was weighed down by Banco do Brasil, whose earnings fell more than 60%, with a R$ 5.7 billion negative swing year-over-year. The disparity reveals a market where resilience is concentrated in a few institutions while others remain under pressure from provisions and regulatory costs.
Mining & Steel was the only sector with meaningful earnings expansion, up 92% year-over-year (+R$ 1 billion), helped by the stronger Brazilian real, which reduced financial losses tied to dollar-denominated debt. CSN added R$ 1.1 billion alone, reinforcing the sector’s financial leverage to FX dynamics.
Qualitatively, 36% of the companies reported strong results — down from 42% a year earlier but stable relative to 2Q25. Weak results accounted for 25%, slightly worse than in 2024 but marginally better than last quarter. The season showed no major deterioration, but also no broad acceleration.
The data also highlights growing divergence between highly leveraged and low-leveraged corporates. Technology, education and logistics showed resilience, while healthcare, utilities, pulp & paper and capital goods faced margin compression. For companies with cleaner balance sheets, more of the operational gains managed to flow into net income.
Overall, consolidated results excluding Petrobras and Vale reached R$ 798.9 billion in revenue (+10% y/y), R$ 137.7 billion in EBITDA (+7% y/y) and R$ 68.1 billion in net profit (–22% y/y). According to BTG, these numbers capture the combined effect of weaker comparables due to one-offs in 2024 and the current high-rate environment.
Looking ahead to 4Q25, BTG notes a mixed start: consumer-facing sectors continue to face irregular demand, while mining and parts of heavy industry benefit from stable pricing and firm export markets. Utilities and fuel distributors remain subject to tariff cycles and year-to-year distortions. The macro backdrop remains the dominant force: with borrowing costs still elevated and uncertainties around the pace of monetary easing, the bank argues that deleveraged companies or those with natural FX hedges will continue to outperform into 2026.
For investors, BTG says the key metric in the next cycle will be the “financial spread” — how much operational generation survives after interest expenses. Companies with healthier balance sheets, stronger cash conversion and less sensitivity to domestic credit conditions are better positioned to convert top-line resilience into real earnings growth.
The bank concludes that the 3Q25 season confirms a pattern that has marked all of 2025: solid revenue, acceptable EBITDA and compressed profits. A sustained earnings recovery will require meaningful improvement in the financial environment, something that remains uncertain heading into 2026.
Consolidated Real Results – 3Q25 (R$ million)
| Indicator | 3Q25A (Real) | 3Q24 (Real) | Y/Y Change |
|---|---|---|---|
| Revenue (Total) | 995,315 | 907,766 | +9.6% |
| EBITDA (Total) | 232,919 | 214,005 | +8.8% |
| Net Profit (Total) | 118,615 | 133,713 | –11.3% |
| Ex-Petrobras & Vale – Revenue | 798,880 | 725,210 | +10.2% |
| Ex-Petrobras & Vale – Net Profit | 68,132 | 87,783 | –22.0% |
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