Companhia Siderurgica (SID) Posts Q4 Earnings, Sales Solid
Zacks Investment Research | Mar 26, 2018 11:46PM ET
Companhia Siderúrgica Nacional (NYSE:SID) or CSN, yesterday, reported impressive financial results for the fourth quarter of 2017. This Brazilian steelmaker’s net earnings from continuing operations in the quarter were approximately R$377.4 million ($116.1 million) versus the loss of R$53 million ($16.1 million) recorded in the year-ago quarter.
Earnings per share in the quarter was R$0.27 or roughly 8 cents per American Depository Receipt (ADR). This compared favorably with the year-ago quarter’s loss of R$0.04 or 1 cents per ADR.
For 2017, the company’s net earnings were R$111.2 million ($34.9 million) versus the loss of R$853.1 million ($244.4 million) in 2016. Earnings per share were R$0.08 or 3 cents per ADR in 2017, better than the loss of R$0.61 per share or 17 cents per ADR in 2016.
Revenues Improved Y/Y
In the quarter, CSN’s net revenues were R$4,992.7 million ($1,536.2 million), increasing 10.5% year over year, driven by a rise in prices of steel products and iron ore.
Domestic revenues in the quarter grew 9.8% year over year, representing 47.5% of net revenues. International business flourished with revenues generated in the foreign market, increasing 11.1% year over year and representing 52.5% of net revenues.
The company operates through five business segments. The segments’ results for the fourth quarter are briefly mentioned below:
Steel: The segment’s revenues totaled R$3,435 million ($1,056.9 million) in the quarter, reflecting year-over-year growth of 16%.
Slab production grew 4% year over year to roughly 1,099 thousand tons while production of flat-rolled products inched up 1% year over year to 959 thousand tons. Production of long rolled products declined 17% to 45 thousand tons.
Steel sales volume grew 6% year over year to 1,253 thousand tons, of which, domestic sales accounted for 61.5%, overseas subsidiaries for about 32% and exports for roughly 6.5%.
Mining: The segment generated revenues of R$1,175 million ($361.5 million) in the quarter, down 10.8% year over year.
Iron ore sales were up 4% year over year to 9,561 thousand tons, of which, domestic sales accounted for 12.9% and international sales of roughly 87.1%.
Logistics: Revenues in the quarter were R$436 million ($134.2 million), up 13% year over year.
Cement: The segment’s revenues totaled R$106 million ($32.6 million) in the quarter, reflecting the year-over-year decline of 17.2%. Cement product in the quarter declined 9.4% year over year to 726 thousand tons while sales volume decreased 17.3% to 661 thousand tons.
Energy: Revenues in the quarter were R$104 million ($32 million), up 55.2% year over year.
Get The News You Want
For 2017, net revenues were R$18,524.6 million ($5,807.1 million), up 8% year over year.
Higher Proportion of Costs Hurt Margins
CSN’s cost of sales in the quarter increased 12.9% year over year to R$3,579.8 million ($1,101.5 million). It represented 71.7% of the quarter’s net revenues versus 70.1% in the year-ago quarter. Gross margin decreased 160 basis points (bps) to 28.3%.
As a percentage of net revenues, selling expenses increased 110 bps year over year to 11% while general and administrative expenses decreased 50 bps to 2.1% over the same time frame.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) decreased 4% year over year to R$1,203 million ($370.2 million) with a margin of 24.1% compared with 27.6% in the year-ago quarter. Net financial results were an expense of R$860 million ($264.6 million), up 27% year over year.
Balance Sheet & Cash Flow
Exiting the fourth quarter, CSN’s cash and cash equivalents were R$4,147.3 million ($1,253 million), slightly above R$4,138.8 million ($1,309.7 million) at the end of the previous quarter. Borrowings and financing decreased 8.1% sequentially to R$22,983.9 million ($6,943.8 million). Net debt to adjusted EBITDA ratio in the quarter was 5.66, down from 6.34 in the year-ago quarter.
In the quarter, the company generated net cash of R$477.7 million ($147 million) from its operating activities, down from R$585.4 million ($185.3 million) in the previous quarter. Capital spent on fixed assets/intangible increased 19.2% sequentially to R$343.9 million ($105.8 million).
Key Players in the Sector
Some stocks worth considering in the Zacks Investment Research
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.