CARACAS: Venezuela’s currency woes cut nearly USD 3 billion in profit at United States blue-chip companies during the second quarter and prompted Procter & Gamble Co to remove its operations in Venezuela from its consolidated financial reports.
More so-called deconsolidation moves and exits from Venezuela are likely to happen during the second half of the year as US corporations grow increasingly frustrated with Venezuela’s sinking Bolivar (VEB) currency, according to analysts and US regulatory filings.
Deconsolidating Venezuelan operations means that business can largely no longer hurt or benefit a US parent company’s financial results. Often companies are taking a big one-time charge so that they can ring-fence what is left in Venezuela.
With slumping crude oil prices and debt payments coming due this year, the Venezuelan government has fewer US dollar reserves available to meet the private sector’s demands.
As a result, entities may have a harder time obtaining US dollars than any time since currency controls were first implemented in 2003, Ernst & Young said in an April report.
