The giant 24 companies in Latin America: revenues ain't what they used to be, still, for the region's multinationals.

How cold is it out there? Our Giant 24 Companies in Latin America racked up some serious money--all but one is at least a US$1 billion company, just counting regional revenues--but most, are still struggling to regain sales after losses piled up daring the last few years, particularly in Argentina.

An exclusive LATIN TRADE analysis of the biggest multinationals in Latin America this year shows two key indicators: revenue growth over the last full year, and an average of the last four full years. Using these two indicators, and adjusting for a strong euro in the case of the European companies, a clear picture emerges. Discounting a few standouts, many of the multinationals doing business in the region are behind the mark compared to their own track record.

Recovery is just around the corner, most predict in their latest reports to investors. For some, high oil prices, revved-up agriculture and a reigniting wireless telecom sector are helping already. But it's still mostly bad news. It's not too surprising that airlines are struggling, but Continental has added back enough to come up just positive on both measures--a minor miracle given the post Sept. 11 chill that lingers to this day around the world's air markets.

Wal-Mart reigns supreme. U.S. chemical and products giant DuPont, meanwhile, is positively booming following a massive, worldwide product restructuring just a couple of years ago.

But the far-and-away leader is Virigina electricity company AES. The power provider has shaken off what had been a painful time in its Latin American divisions, finalizing at the end of 2003 a deal to restructure its holdings in Brazil while recapitalizing debt at Chilean subsidiary Gener.

"The big reason for that jump up is acquisitions," says Scott Cunningham, Vice President of Investor Relations for AES. Revenues in Brazil rose to $2.19 billion in 2002 from $444 million the year before because of a single purchase, of Brazil's Eletropaulo, Cunningham says.

In Brazil, however, the company piled on debts of $2.3 billion, including $1.2 billion owed to Brazil's Banco Nacional de Desenvolvimento Economico e Social (BNDES), the national development bank, After 18 months of talks, BNDES and AES created Brasiliana Energia, an AES-controlled entity holding the U.S. company's interests in Eletropaulo, Uruguaiana and Tiete.

Rebound. While BNDES gets just under hall of the voting shares, AES gets to reduce its debt to the bank to $510 million, paid over 11 years. Eletropaulo separately restructured $787 million in debt over five years. In Chile, meanwhile, AES cut debt by $250 million yet retained 99% of the generator AES Gener, followed by a $100 million capital increase, Improving economies and rebounding currencies are helping the company's more recent improvements in performance.

AES management credited a 21% increase in generation to $868 million in the first quarter of 2004 in part to better operating results at Gener and in Brazil. A 17% rise to $818 million in utilities sales was also due in part to Brazilian business, the company says. Better distribution business, in part in El Salvador; drove that segment up 24% to $328 million.

Spain's Endesa spent the late 1990s as AES did, buying up electricity assets around the region. The company has been hit by much of the same financial pressure, too, as it unwinds debts, although Endesa seems to be coming out of the black hole of the last few years' economic malaise more slowly. A strategic plan, scheduled to end by 2006, includes a $2.12 billion capital increase for its Chilean operations and refinancing of $2.33 billion of debt held by Enersis and Endesa Chile. The company also sold off assets in Chile to raise money and refocus its business model there. Endesa Espana said it had cut its Latin American debt by nearly a third by the end of 2003.

Revenues from the Latin American electricity business during 2003 were 22% of Endesa's total sales. Generation demand rose in double digits in Argentina and Brazil, a sign of recovery economies there, the company says. By the and of the first quarter of 2004, demand in Argentina had risen another 70% compared to the same period a year before--a clear sign of economic renewal as factory lines restart--and in Brazil demand was up 166%. Endesa says the opening of a power plant in Fortaleza was the main reason for the rise in Brazil.

Wal-Mart continued to grow in Mexico by sticking with its business model, capitalizing on low prices to pull away from the pack of retail competitors in the country. Wal-Mart, added nine new stores in Mexico during 2003, bringing its total in the region to 641. In Mexico, Wal-Mart now serves 600 million customers a year. "Customers find what they want from a great selection and at low prices," says Wal-Mart spokesman Bill Wertz.

It's not all good news for Latin American retail, however. French hypermarket chain Carrefour; after building up quickly during the 1990s, continues to stagger from the hit it took on Argentinas huge devaluation. Following the country's historic meltdown, Carrefour's revenue continued to sink due to slumping demand at Argentine grocery stores. That's only turning around now as Argentines--famous consumers--begin to feel comfortable spending again.

Spending on life's little luxuries has helped at least one big brand in the region. Improving sales in Brazil and Mexico helped boost Avon's revenue in 2003 as hard times convinced ever-greater numbers of women to sign up and try out direct sales. The company also launched new products, giving representatives a greater mix of goods to sell. Avon told investors it improved operating efficiency, too, by moving to lower-cost distribution centers in Mexico and by improving supply-chain management across the region.

For hygiene company Colgate-Palmolive, unit volumes grew although revenue did not, the company reports. It blames exchange rate problems and marketing expenses. But that money is being spent to position for recovery: Colgate-Palmolive is launching new projects in the region, it says, including toothpastes, toothbrushes and other dental care products as well as soaps and personal care products.

New products. Sales jumped for U.S. cellular phone company Motorola in 2003 thanks to renewed demand for cellular telephones in emerging markets, which includes Latin America. New subscribers bought handsets and existing subscribers replaced old technology as fast as it could be shipped in some countries. While increased demand for the newest cellular telephone technology sparked interest in some of Swedish telecom equipment maker Ericsson's wireless products, declining demand for the company's other, more technologically outdated lines hurt sales, the company said. Ericsson also told investors that it focused more heavily on Asian markets during the past year.

The wireless boom is an indicator of big changes to come. Carlos Slim, the Mexican billionaire behind telefonos de Mexico (Telmex) and its regional wireless spinoff America Movil, went on a shopping spree in late 2003, spending hundreds of millions to snatch up assets around the region in both fixed-line and wireless. By the time our next Giant 24 comes around, look for Telmex to have enough outside-Mexico assets to crack the list of biggest multinationals in the region.

Similar, Chilean airline LAN now has enough foreign airlines under its wing to be credibly called a multinational, and the European beer giant Interbrew's purchase of Brazilian brewer AmBev will likely kick it onto the list.

THE GIANT 24

                                          2003 SALES IN
                                           US$ MILLIONS

                                              TOTAL

                                                  % change
                 COMPANY                 2003     '03/'02

AUTOS            VOLKSWAGEN             109,900      0.2%
                 GENERAL MOTORS         185,524      4.6%

AVIATION         AMERICAN AIRLINES       17,440      0.1%
                 CONTINENTAL AIRLINES     8,870      5.6%

BEVERAGES        PEPSICO                 26,971      7.4%
                 COCA-COLA               21,044      7.6%

CHEMICALS        BASF                    42,068      3.6%
                 DUPONT                  26,996     12.5%

ELECTRICITY      AES                      8,415     14.0%
                 ENDESA                  20,988     -3.4%

FOOD             NESTLE                  70,951     -1.3%
                 UNILEVER                53,836    -11.6%

HYGIENE          COLGATE-PALMOLIVE        9,903      6.6%
                 AVON                     6,876     10.4%

OIL & GAS        REPSOL YPF              46,917      2.0%
                 ROYAL DUTCH/SHELL      201,728     21.1%

PHARM.           BAYER                   36,023     -3.6%
                 AVENTIS                 21,173     -4.5%

RETAIL           WAL-MART STORES        258,681      4.9%
                 CARREFOUR               88,883      2.6%

TELECOM          TELEFONICA              35,812      0.0%
                 TELECOM ITALIA          38,902     -1.8%

TELECOM EQUIP.   MOTOROLA                27,058     -0.8%
                 ERICSSON                16,217    -19.2%

                                         2003 SALES IN US$ MILLIONS

                                                LATIN AMERICA
                                                               avg.
                                                  % change   % change
                 COMPANY                 2003     '03/'02    '03/'00

AUTOS            VOLKSWAGEN              9,770E     -1.0%     -17.5%
                 GENERAL MOTORS          8,380E     -9.4%      -3.6%

AVIATION         AMERICAN AIRLINES        2,477     -2.1%      -5.2%
                 CONTINENTAL AIRLINES     1,050      3.3%       0.9%

BEVERAGES        PEPSICO                 2,650E     -1.6%       0.7%
                 COCA-COLA                2,042     -2.2%       0.4%

CHEMICALS        BASF                   2,226 *      6.3%     -10.1%
                 DUPONT                   1,954     30.1%       4.7%

ELECTRICITY      AES                     4,830E     18.7%      29.3%
                 ENDESA                   4,569    -11.3%     -10.5%

FOOD             NESTLE                   6,908    -13.2%      -6.2%
                 UNILEVER                 5,523    -19.5%      -6.8%

HYGIENE          COLGATE-PALMOLIVE        2,180     -1.2%      -3.2%
                 AVON                     1,747      5.6%      -1.5%

OIL & GAS        REPSOL YPF              13,016      8.3%      -6.1%
                 ROYAL DUTCH/SHELL       8,865E     -6.4%      -5.3%

PHARM.           BAYER                   4,080E     -6.1%       1.2%
                 AVENTIS                 735 **    -14.6%      -9.7%

RETAIL           WAL-MART STORES         6,700E      4.7%      12.1%
                 CARREFOUR                5,824    -14.2%     -20.8%

TELECOM          TELEFONICA             11,925E     -5.4%      -0.4%
                 TELECOM ITALIA           3,236     -8.5%      22.1%

TELECOM EQUIP.   MOTOROLA                2,165E     13.3%      -8.7%
                 ERICSSON                 1,367    -21.7%     -35.6%