Brazil’s WEG reports second-quarter earnings miss amid geopolitical uncertainty, shares fall

Weg Brazilian, Sao Paulo (Reuters), informed on Wednesday, on Wednesday, by 10.4 % on an annual basis in its net profit in the second quarter, but the market expectations were lost amid what it described as high fluctuations in the global economy, which leads to a sharp decrease in its shares.

The worst results are expected to create more uncertainty for WeG, which analysts among the companies most exposed to the 50 % American president Donald Trump will be imposed on Brazilian goods as of August 1.

The Sao Paulo shares traded in Motor Mater decreased by 6.3 % after the results, making it the largest period in the Bovespa standard stock index, which increased by 0.6 %.

Weg, whose engines in vehicles and wind turbines have reported a net income of 1.59 billion rites ($ 285.8 million) for a quarter, less than 1.76 billion expected analysts in the LSEG survey.

The net revenue reached 10.2 billion, an increase of 10.1 % on an annual basis, while EBITDA increased by 6.5 % to 2.26 billion. Analysts expected revenues and Ebitda from 11.16 billion and 2.49 billion rings, respectively.

Weg said that growth on an annual basis was explained by “strong performance” in the aspect of the transmission and distribution infrastructure in its long -cycle business, which makes the equipment used in large projects such as transportation lines.

“We were able to maintain consistent growth and the profitability of our business, even in the global political and economic scenario that is characterized by uncertainty and high volatility,” Wig said in a statement.

He pointed out that despite the good demand for long -term products, cases of geopolitical uncertainty that limit long -term vision led to the postponement of some investment decisions for large projects.

The Ebitda margin, which the company watched closely, decreased by 80 basis points on an annual basis to 22.1 %.

Santander analysts said that the most expected results were mainly driven by Miss Revenue, as well as the slow sales growth in the internal markets and the weakest US dollar harm from the external revenue from the previous quarter.

WeG did not treat the threatened Trump tariff, but she repeated confidence in her long -term business model, saying that she has financial flexibility while continuing to monitor market risks.

She said: “Our global presence in production, the portfolio of various products and their presence in many sectors is essential to our business strategy, and allows us to interact quickly with changing scenarios and mitigate the effects of potential macroeconomic economics.”

Weg has plants in more than dozens of countries, including the United States and Mexico. North America accounted for 48 % of the company’s revenues from foreign markets in the second quarter.