Brazil's listed companies spent R$ 99.4 billion (roughly US$ 19 billion) on financial expenses, the accounting term for interest and charges on debt, between April and June. That was 12% more than in the same quarter of 2025, an extra R$ 10.7 billion, according to a survey by the consultancy Elos Ayta commissioned by the newspaper O Globo. It works out to more than R$ 1 billion a day leaving company cash for creditors, instead of paying for expansion or hiring.

The squeeze shows in the bottom line, what is left after interest and taxes: net profit rose only 3.9%, from R$ 48.9 billion to R$ 50.8 billion, across a sample of 268 companies on the B3, Brazil's stock exchange (Petrobras, Casas Bahia and the banks were left out). Operating profit, before that bill, had climbed almost 25%, to R$ 123.9 billion. O Globo reports that high rates pressure companies, limit profits and curb investment, a reading confirmed by UOL Economia in its review of earnings-season reports from five banks.

In brief: the Selic is Brazil's benchmark interest rate, set by the Central Bank to contain inflation, and it currently sits at 14% a year. It is the floor for all credit in the country, from store installments to home loans. In practice, every R$ 1,000 of debt costs R$ 140 a year at that rate alone, before the bank's spread.

"Ebit profit (what companies earn before deducting interest on debt and taxes) rose almost 25%, totaling R$ 123.9 billion. But when you consider what companies paid in interest and taxes, an outlay of R$ 99.4 billion, net profit falls to R$ 50.8 billion. That is profit growth of just R$ 1.9 billion year over year," explains Einar Rivero, CEO of Elos Ayta.

Companies trade debt for cash

Many companies responded by paying down debt. According to an XP survey cited by O Globo, average leverage, measured as net debt over operating profit, fell from 1.7 to 1.4 over the last four quarters among 135 companies tracked by its analysts. The cost of skipping that homework shows within a single industry: the homebuilders Cury and Direcional earned R$ 311 million and R$ 202 million, while MRV&CO paid R$ 393.2 million in net financial expenses, 60% more than a year earlier, and posted a loss of R$ 626 million.

The outliers

Two cases were left out of the sample so they would not distort the average. The retailer Casas Bahia booked an accounting loss of R$ 10.1 billion, closed 298 stores and filed for judicial recovery, a court-supervised process in Brazil that lets a company renegotiate debts to avoid bankruptcy, with R$ 17.3 billion to restructure. In its petition, the company said it had been "impacted by the challenging macroeconomic environment, marked by elevated interest rates, credit restriction, higher financial costs and pressure on consumption and working capital."

Petrobras was excluded for the opposite reason: it earned R$ 52.4 billion, up 96.8% from the second quarter of last year, lifted by oil prices that have risen amid tensions between Iran and the United States. Strip out those extremes, and the quarter shows companies that sell more but watch most of the extra gain go to interest and taxes.