Brazil's state-owned postal service, Correios, reported a R$3.16 billion loss in the first quarter of 2026, nearly twice the R$1.7 billion deficit recorded in the same period last year. The figure, equal to roughly USD 600 million at recent exchange rates, adds pressure to a company that has posted losses since 2022.
The official result came after G1 reported in April, based on preliminary accounting data, that the quarterly loss could reach R$3.4 billion. Folha de S.Paulo, O Globo and CNN Brasil later reported the final figure from the company's financial statements at about R$3.16 billion.
Revenue Still Weak
Correios is undergoing a restructuring effort under president Emmanoel Rondon, who took over in late September 2025. The company ended 2025 with an R$8.5 billion loss, its worst recorded annual result, and later secured a R$12 billion loan backed by Brazil's federal government, meaning the Treasury would be responsible if the company defaults.
Revenue has not yet recovered. Gross revenue from sales and services reached R$4.04 billion in the first quarter, down 2.2% in nominal terms from R$4.13 billion a year earlier. Net revenue followed the same trend after taxes and discounts.
The steepest decline came from international parcels, where revenue fell 60.3% to R$156 million. G1 linked the longer-term drop in that business to Remessa Conforme, a federal import-tax program launched in 2023 that changed taxation on low-value overseas purchases and became popularly known in Brazil as the "taxa das blusinhas," or "little-blouse tax."
Parcel revenue overall fell 5.5% to R$2.2 billion. Mail and document delivery, grouped under messages, rose 11.4% to R$1.2 billion, while other revenue increased 48% to R$465 million.
Costs and Lawsuits
The company did reduce some operating costs. Costs of goods sold and services provided fell 7.6%, from R$4.01 billion in the first quarter of 2025 to R$3.7 billion this year. Personnel costs, the largest expense line, declined 4.1% to R$2.7 billion despite a 5.1% wage increase agreed with workers last year. Correios attributed part of the reduction to a voluntary dismissal program implemented in 2024.
The improvement was outweighed by higher administrative, legal and financial expenses. O Globo reported that general and administrative expenses rose from about R$1.2 billion to R$2.2 billion year on year. Correios recognized an additional R$1.06 billion provision for labor lawsuits, raising total lawsuit-related provisions from R$3.6 billion at the end of 2025 to R$4.66 billion in March. The company said expenses with judicial liabilities and court-ordered payments known in Brazil as precatorios totaled R$1.4 billion, equal to 44% of the quarterly loss.
That adjustment follows criticism from Brazil's Federal Court of Accounts (TCU), the external audit body that oversees public spending, and the Office of the Comptroller General (CGU), the federal internal-control agency. Both had questioned an earlier accounting treatment that removed roughly R$1 billion in potential labor liabilities from prior statements.
Estadao and Poder360 reported in December that the CGU found Correios had irregularly reduced a labor provision from about R$1 billion to R$18 in its 2023 accounts. The dispute involved lawsuits over additional pay owed to motorcycle mail carriers. Correios argued that a favorable court decision justified revising the estimate, but the CGU said the company had relied on uncertain future events and recommended corrections.
Debt Pressure
Financial expenses also rose sharply, from R$283 million in the first quarter of 2025 to R$985 million this year, according to Folha. G1's preliminary report had already pointed to higher interest, fines and loan-related costs as a major source of pressure. CNN Brasil said the negative financial result, around R$637 million, reflected debt charges and commissions tied to borrowings used to maintain liquidity.
Correios also paid more compensation to customers for late deliveries. In March 2026, those payments reached R$30.5 million, compared with R$2 million in the same month last year. Folha reported that the company had accumulated complaints about delayed deliveries during the Christmas peak after a worker strike late in 2025.
The balance sheet remains under strain. O Globo reported that Correios' negative shareholders' equity worsened from R$13.1 billion at the end of December 2025 to R$16.2 billion at the end of March 2026.
Restructuring Plan
In its own statement, Correios said the first-quarter result was compatible with the assumptions of its restructuring plan and came in better than the company had originally projected. The program, begun at the end of 2025, includes spending cuts, contract reviews, sales of unused real estate, technology upgrades, logistics improvements, worker training and efforts to develop new revenue streams, alongside the voluntary dismissal program. The company paid off some higher-cost loans early and replaced them with a longer-term debt operation guaranteed by the federal government, aiming to reduce short-term pressure on cash flow.
Correios said its goal is to restore economic and financial balance and return to net profit by the end of 2027. But the first-quarter figures show that lower operating costs have not yet offset shrinking revenue, litigation exposure and debt service.