Brazilian steel maker,
Companhia Siderurgica Nacional
, or CSN
reported disappointing financial results for the first quarter
2013 on May 15. The company's net income fell 82.4% year over
year and settled at R$16.3 million (US$8.2 million). Earnings
were R$0.01 per share or 0.5 cent per ADR.
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CSN generated net revenue of R$3,642.0 million (US$1,821
million), up 6.0% over the year-ago quarter.
The company's crude steel production in the quarter was roughly
1.2 million tons and rolled steel produced was about 1.1 million
tons. Steel sales volume increased 3% sequentially to roughly 1.6
million tons, of which domestic sales accounted for 77.0%,
overseas subsidiaries about 21% and direct exports around 2%.
Iron ore sales were down 35% sequentially to 4.1 million tons.
Talking of segments of CSN, Steel revenue accounted for 71.8% of
total revenue and increased 22.8% year over year while revenue in
the Mining segment fell roughly 34% and represented 18.2% of
The Logistics segment contributed 6.5% of total revenue and was
down 5.7% over the year-ago quarter. Cement revenues increased
12.6% and settled at 2.4% of the total. Energy at 1.1% of total
revenue registered a 14.5% fall in revenue.
Cost of goods sold in the quarter rose 17.6% year over year to
R$2,851.6 million (US$1,425.8 million), leading to a fall in
gross margin to 22% from 29% in the year-ago quarter.
As a percentage of net revenue, selling expenses increased by
roughly 170 basis points (bps) year over year, while general and
administrative expenses plummeted 10 bps year over year.
Adjusted EBITDA of CSN in the quarter dipped 19.0% to R$902.0
million (US$452.0 million) with a margin of 24.8% compared with
32.4% in the year-ago quarter. Net financial results were
reflected in an expense of R$527.3 million (US$263.7 million),
down 17.4% year over year.
Exiting the first quarter, CSN had cash and cash equivalents of
R$11,332.1 million (US$5,610 million), down 4.7% sequentially.
Loans, financing and debentures, net of current portion decreased
1.3% to R$26,784.5 million (US$13,259.7 million).
In the first quarter 2013, CSN used cash flow of approximately
R$215.8 million (US$107.9 million) for operating activities.
Capital spending in the quarter totaled R$440.5 million (US$220.3
CSN currently has a market capitalization of roughly $5.0 billion
and carries a Zacks Rank #3 (Hold). Other stocks to watch out for
in the industry are
LB Foster Co.
Angang Steel Company Limited
), each with a Zacks Rank #2 (Buy).