Brazilian steelmaker and mining group CSN’s net profit jumped by more than fourfold in the fourth quarter, sending its shares higher on Thursday on the back of a solid performance in its mining business.
Shares of CSN rose as much as 3.5% in the session before paring some gains, while its listed mining subsidiary CSN Mineracao was up more than 5%. Brazil’s Bovespa stock index traded nearly flat.
CSN reported late on Wednesday an 851 million reais ($172.11 million) net profit for the quarter ended in December, a 332% year-on-year increase although still below the 981.9 million expected by analysts polled by LSEG.
The company said its mining segment was again the main lever of its results, with “solid margin expansion”. Revenue for the business grew 42.5% from a year earlier to 5.03 billion reais.
Steelmaking revenue, on the other hand, fell 6.6% to 5.65 billion reais.
Analysts at Itau BBA highlighted the mining results, “as better price realization more than offset lower volumes.”
Brazilian steelmakers have complained about cheaper steel, particularly from Russia and China, “flooding” the South American country’s market, and have asked the government for a temporary tax on imports.
Despite a “sharper quarterly drop” in China’s steel production during the fourth quarter, CSN expects that Chinese steelmakers will maintain their strong level of activity this year, “with the Chinese government’s incentives boosting various strategic sectors.”
CSN said its quarterly revenue rose 7.9% to 12 billion reais.
Its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) grew 16% to 3.62 billion reais, raising its adjusted EBITDA margin to 29.08% from 27.06% a year earlier.
($1 = 4.9446 reais)
(By Andre Romani and Peter Frontini; Editing by David Evans)
