Companhia Siderurgica Nacional
), or CSN reported quite disappointing second quarter 2012 results.
The company entered the negative zone reporting a net loss of
R$1,048.4 million (US$534.9 million) versus net earnings of
R$1,137.2 million (US$715.2 million) in the year-ago quarter.
Loss per share came in at R$0.72, or US$0.37 per ADR as compared
with the Zacks Consensus Estimate of earnings of US$0.04 per ADR.
Fall in net income was attributable to lower revenues and higher
cost of sales and expenses.
The company generated net revenues of R$4,136.8 million
(US$2,110.6 million) in the second quarter of 2012, registering a
year-over-year decline of 4% and sequential increase of 6%.
Crude steel production in the quarter was 1.2 million tons and
rolled steel was 1.2 million tons, down 2% and 4% year over year,
respectively. Steel sales volume inched up 7% sequentially to 1.4
million tons, of which domestic sales accounted for 74.0%, overseas
subsidiaries about 23% and direct exports around 3%.
Iron ore sales were down 9% sequentially to 6.1 million tons. Of
total sales, domestic market accounted for 3.0% and exports about
During the second quarter 2012, cost of goods sold went up 19.8%
year over year to R$2,981.0 million (US$1,520.9 million), leading
to a fall in gross margin to 28% from 42% in the year-ago
As a percentage of net revenue, selling expenses increased by
roughly 100 basis points (bps) year over year, while general and
administrative expenses decreased 10 bps year over year.
Adjusted EBITDA in the quarter dipped 36.8% to R$1,120.1 million
(US$571.5 million) with a margin of 27% compared with 41% in the
year-ago quarter. Net financial results plummeted 51% year over
year to an expense of R$317.9 million (US$162.2 million).
Exiting the second quarter, Companhia Siderurgica had cash and
cash equivalents of roughly R$13,690.5 million (US$6,582 million)
compared with R$14,144.0 million (US$7,771.4 million) in the
previous quarter. Loans, financing and debentures, net of current
portion increased to R$26,863.5 million (US$12,915.1 million)
versus R$25,783.6 million (US$14,166.8 million) in the previous
Net cash flow from operating activities plummeted 71.7% to
R$306.9 million (US$156.6 million) while capital spending totaled
R$673.8 million (US$343.8 million), down 23.2% year over year.
CIA SIDERUR-ADR (SID): Free Stock Analysis
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