Rio, 8/20/2003 (Agência Brasil - ABr) - The year of 2002 was not a good year for the Brazilian non-financial business sector. High interest rates, exchange rate instability, the uncertainty caused by the presidential election and the US invasion of Iraq resulted in 43% of the country's top 500 corporations closing out the year in the red.

That is the news in the report on non-financial corporate operations in 2002 by the Brazilian Economic Institute at the Foundation Getulio Vargas (FGV).

The forecast for 2003 is more optimistic. There are good perspectives for reduced interest rates. The stronger real will give corporate balance sheets a boost, even though the outlook is for weaker demand in the second half.

The FGV ranking for 2002 had Petrobras in first, for the eighth consecutive year. Telemar and Telefonica, telecommunications operators, were in second and third, respectively. Vale do Rio Doce was in fourth, followed by Furnas, Brasil Telecom, Embraer, Embratel, Pão de Açucar and the National Steel Company. The aviation sector had the worst performance, down 47%. The energy and telecommunications sectors also had losses in 2002. (AB)