MercoPress. South Atlantic News Agency

Petrobras still Latam's top company but fell to second-worst performer because of corruption losses

Petrobras has gone from Latam's most profitable company to the second-worst performer after Mexican state oil company Pemex (a perennial money loser).

Brazil's state oil giant Petrobras remains Latin America's top company in revenues, but has lost its position as the profit leader after posting record losses last year due to a growing corruption scandal and administrative inefficiencies, according to a new ranking of the region's 500 largest companies from digital publication Latinvex.

 The ranking, which is based on data from Economatica and individual companies, shows that as a result of posting a $7.4 billion loss last year, Petrobras has gone from Latin America's most profitable company to the second-worst performer after Mexican state oil company Pemex (a perennial money loser).

The 500 companies on the Latinvex 500 saw their combined revenues decline 7.5% to $1.7 trillion. That's almost the equivalent of the combined GDP of Mexico and Argentina ($1.8 trillion) and more than all the other countries in the region except for Brazil ($1.5 trillion).

Profits, however, fared much worse, in large part due to Petrobras as well as widening losses at Pemex. Combined profits on the Latinvex 500 fell 32.8% to $48.5 billion.

Yet, despite the scandal at Petrobras it didn't post the worst result in Latin America last year. That dubious honor went to Pemex, which managed to widen losses from $12.9 billion in 2013 to a whopping $17.9 billion last year.

“Pemex watchers have long lamented the issues surrounding the company's performance,” says Jeremy Martin, director of the Energy Program at the Institute of the Americas at the University of California, San Diego.

“But those days are thankfully being put in the rearview mirror with the energy reform measures. Of course, the new Pemex law and the just-announced restructuring of the company will take time to be reflected in its books. Turning around an aircraft carrier requires concentration and patience and the fact is that overhauling 75 plus years of state intervention in Mexico will not happen overnight.”

Brazil dominates the ranking, with 191 companies that posted a total of $625.2 billion in revenues last year. Mexico follows, with 83 firms and $398.1 billion in revenues. Chile accounted for 82 companies, with total revenues of $164 billion.

The remaining 144 firms came from Argentina, Colombia, Panama, Peru as well as the United States, Canada, Finland, France, Germany, Italy, The Netherlands, Spain, Sweden and Switzerland.

Oil and gas dominates revenues, accounting for a total of $377.9 billion. Other key revenue sectors on the ranking include retail and food and beverage. Meanwhile, food and beverage leads in profits ($11.1 billion), followed by retail and mining.

In terms of number of companies, electricity leads, followed by food and beverage and retail. The technology sector also shines on the Latinvex 500. It had the 4th-highest revenues and profits and 6th-highest number of companies.