Balance sheet season: companies distribute 52% of 2021 profit in dividends; what to expect in 2022?

An exclusive survey carried out by MZ Group at the request of the InfoMoney reveals that companies listed on B3 announced the distribution of 52.39% of their net profits in the form of dividends and interest on equity in 2021. The proportion was higher than in 2020, when they distributed 44.6% of net income to remunerate employees shareholders.

The study considered 272 companies listed on B3, among those with the highest volume traded, and the management proposals on the allocation of resources sent to the CVM (Securities Commission) during last year’s balance sheet disclosure season, which ended on the last day March 31.

The oil, gas and derivatives and telecommunications sectors were the ones that distributed a higher percentage of net income to shareholders in the last two years.

In 2020, the oil, gas and derivatives sector allocated 99% of its net income to the payment of dividends and interest on equity (JCP), according to the MZ survey. In 2021, the share was 87% of net income.

In 2020, the telecommunications sector distributed 90% of its net income. By 2021, the proportion had dropped to 77%.

Considering only the year 2021, the health sector occupies the third position among the highest percentage of distributed earnings in relation to net income. The sector allocated 68% of net income to remunerate its shareholders.

Source: MZ Group Survey

corporate profit

Among the 272 companies included in the survey, 79% declared a profit in 2021 in the management proposals sent to the CVM. The profit was 17.6 percentage points higher than seen in proposals submitted last year. Of this universe, 17.3% have not made a profit and 3.7% have not yet presented their management proposals.

All companies in the electric energy sectors; Paper And Cellulose; rental of vehicles and machines; participations and investments; plus financial services posted profit last year.

In total, the companies’ profit in 2021 totaled BRL 584 billion, a value 141% higher than that recorded in 2020, which was BRL 242 billion.

Petrobras and Vale had a strong weight in the profit of the group of companies evaluated. Excluding both companies, the value would be BRL 356.3 billion in 2021 – even so, 71.1% higher than that recorded in 2020, of BRL 208 billion.

The pulp and paper sectors; oil, gas and derivatives; and mining and steel were the ones that registered the biggest positive variation in relation to the 2020 profit. Nine sectors had an increase of more than 100%.

In the oil and gas sector, companies such as Petrobras (PETR4; PETR3), Cosan (CSAN3), Unipar (UNIP6) and Enauta (ENAT3) contributed the most to the rise. The segment had a positive variation of 862% in 2021, compared to the declared profit in 2020.

In the mining sector, the jump was 341%, led by Vale (VALE3), Gerdau (GGBR4), CSN (CSNA3), Usiminas (USIM5) and CSN Mineração (CMIN3).

Source: MZ Group Survey

Dividends or interest on equity: how will companies distribute profits?

Of the BRL 584 billion profit declared by the companies in 2021, the total amount of earnings in the management proposals amounted to BRL 306 billion, an amount 183.3% greater than that observed in the 2020 fiscal year. Of these, BRL 258 billion will be distributed as dividends and R$48 billion as interest on equity (JCP).

The sectors that most declared dividends and interest on equity in 2021 were oil, gas and derivatives (R$113.61 billion), mining and steel (R$79.85 billion) and financial services (R$37.05 billion).

In these sectors, the companies that led the distribution were Petrobras, Unipar, Cosan, Ultrapar, Vale, Gerdau, CSN Mineração, CSN, Gerdau Metalúrgica, Bradesco (BBDC4), Banco do Brasil (BBAS3), Itaú (ITUB4), BTG Pactual ( BPAC11) and B3 (B3SA3).

Source: MZ Group Survey

If comparing the evolution in the distribution of earnings in 2021 compared to 2020, the sectors that showed the greatest positive variation were pulp and paper; Oil and Gas; real estate exploration; mining and steel; holdings and investments, followed by the machinery, equipment, vehicles and parts sector.

Source: MZ Group Survey

In the payment of earnings, Vale and Petrobras also had a strong weight. Excluding these companies, the total amount of earnings declared by the companies on the Exchange was BRL 142.9 billion in 2021 (BRL 108.9 billion in dividends and BRL 34 billion in interest on equity).

Source: MZ Group

Outlook: Can earnings grow in 2022?

For 2022, the experts consulted by the InfoMoney are confident that the earnings distributed by the companies on the Exchange will be higher than those recorded in 2021.

Rodrigo Crespi, an analyst at Guide Investimentos, points out that the market is already raising estimates of earnings per share, especially on the Ibovespa, which proves that companies can distribute greater profits in 2022. “Especially when we look at companies focused on commodities or oil , which have a very strong cash generation given the current level of oil”, he explains.

According to Crespi, Petrobras should have a return in dividends (dividend yield) above 20%, which is quite representative. “It surpasses any company in the energy sector”, he reinforces.

In his view, the sectors that should pull the distributions of earnings in 2022 are commodities, financial – which should show higher dividends with the end of the pandemic and the rise in interest rates – and the insurance segment.

He also remains optimistic about mining and steel and assesses that already in the results of the first quarter of 2022, investors should perceive solid numbers.

Bruno Madruga, partner and head of equity at Monte Bravo Investimentos, believes that the electricity sector can also surprise investors with its dividends. Some companies have benefited from the red flag in energy tariffs in recent months. However, he believes that because it is a service of basic need, the electricity sector continues to be a good payer.

“One sector for investors to be aware of is insurance, which can have a very attractive dividend distribution”, highlights Madruga. The segment was not present among the largest distributions of 2021.

Earnings in relation to net income

Among the sectors that allocated a higher percentage of net income to earnings – such as oil and gas; telecommunications and health – Madruga highlights that they were the ones that had growing revenue, low operating costs and even transformations in the companies’ business model.

According to the specialist, the health sector, for example, was benefited by a movement towards verticalization of companies, offering services strictly necessary to reduce expenses. “This increases the profitability of companies, which have the institution that provides the service, the health plan, the doctors, all in a vertical model”, he says.

For 2022, Crespi, from Guide, highlights that the companies that should still maintain a good distribution of net income for earnings will be telecommunications and commodities. The health sector, on the other hand, may reduce distribution, with less return to shareholders, due to inflationary pressure in relation to costs with medical supplies.

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