Letter from the CEO, Brazil


2018 was marked by the start of a recovery in consumer – as well as business and investor – confidence in Brazil. Notwithstanding, GDP growth was a modest 1.1%, while inflation remained subdued and interest rates reached historic lows.

At Brookfield, we have stayed true to our long-term investment strategy through all cycles in Brazil over the years. This includes the low-growth period of 2018, when we reported BRL 89 billion in assets under management, up 16% from the year prior. Our net revenues at year-end totaled BRL 18.7 billion and EBITDA reached BRL 9.7 billion, up approximately 20% in both cases.

We expect that the focus in 2019 will remain on the reforms – social security, tax, fiscal policy, and others – needed for sustainable growth. We anticipate more robust economic growth, job creation, demand for goods and services and above all, increased investment in the country. 


In 2019, Brookfield celebrates 120 years in Brazil. Our local activities began with urban street lighting and public transport projects – namely, electric tramcars in São Paulo followed by Rio de Janeiro. Today, we are one of the largest and longest-standing investors in Brazil, with high-quality assets in sectors that are important for the country’s development and that show significant growth potential. This long history of investing in Brazil has provided us with deep knowledge of the local market and a proven capacity to invest and generate significant returns across different economic cycles. 

We believe in Brazil’s strong fundamentals and realize that periods of recession and low economic growth do not last forever. In 2017, when direct investment all but stopped, we invested more than BRL 20 billion in acquisitions and an aggregate BRL 5 billion expanding our operations. 2018 was no different. 

In infrastructure, we made our first investment in data with the USD 2.0 billion acquisition of Brazil-headquartered Ascenty, the largest data center company in Latin America. Our electricity transmission company, Quantum, successfully bid for a new concession in an auction held in late 2018, increasing its transmission-lines portfolio from 4,300 km to about 5,500 km. Arteris, our toll-road company, was also awarded a new concession in the countryside of the state of São Paulo, in which BRL 5 billion will be invested during the 30-year concession period. In real estate, we diversified into logistics parks with the BRL 425 million acquisition of two developments in the state of São Paulo with a total area of approximately 200,000 square meters. In renewable energy, we completed the operational integration of 14 wind farms in the state of Bahia purchased from TerraForm, with installed capacity of 300MW. We also completed construction of two new hydroelectric power plants in the state of Mato Grosso, adding another 50MW in installed capacity to our portfolio.

Renascença wind farm, Rio Grande do Norte, Brazil

Renascença wind farm, Rio Grande do Norte, Brazil


Securing our position

2018 was also a year of investment in operational improvements to recent acquisitions, including NTS, a natural gas distribution company with a network of more than 2,000 km in pipelines. We invested approximately BRL 130 million in safety and security upgrades to its pipeline system using world-class technology. In addition, NTS concluded a BRL 5.2 billion refinancing operation – Brazil’s largest-ever debt issuance for a non-financial company – and reduced financial expenses by approximately 22%. 

BRK Ambiental, the sanitation company acquired in 2017, invested a record-setting BRL 650 million during the year to upgrade and expand its operations in various regions of the country. 

During the year, Quantum invested BRL 2.7 billion, while Arteris and VLI – operating in the integrated logistics segment – invested BRL 1.2 billion each. 

With our long history in Brazil and our strong local presence, we are well positioned to benefit from both organic growth and new investment opportunities. 

What we have achieved so far has been possible because of the trust our investors and shareholders have placed in us, as well as the dedication and work of our team of investment professionals and the more than 20,000 operating employees across our portfolio companies. 

Thank you all for your continued support and hard work.

- Henrique Carsalade Martins


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