CSN reported a Q4 net loss of 85 million reais due to high financial expenses, yet beat core earnings expectations with an EBITDA of 3.33 billion reais and net revenue of 12.03 billion reais. Steel sales increased while iron ore sales declined. The company’s key business units performed strongly, leading to optimistic market projections.
Brazilian steelmaker CSN, identified as one of the nation’s largest steel and mining entities, reported a net loss of 85 million reais (approximately $14.66 million) for the fourth quarter due to what it termed “still high volumes of financial expenses.” However, the company’s core earnings and revenues surpassed market expectations, demonstrating resilience in challenging conditions.
In its October-December report, CSN experienced a decline from a previous profit of 851 million reais the year prior. The firm reported an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of 3.33 billion reais, reflecting an 8% year-on-year dip, yet notably exceeding analysts’ predicted EBITDA of 2.87 billion reais. The net revenue reached 12.03 billion reais, slightly above the forecast of 11.8 billion reais, while steel sales increased by 10.4% year-on-year despite a 3.7% decline in iron ore sales.
CSN remarked, “The steelmaking operation took another step in the process of normalizing operations and recovering profitability,” attributing improved performance to stronger volumes and elevated prices propelled by domestic demand, even amid a weaker seasonal context. Furthermore, the mining segment faced challenges from the onset of the rainy season but maintained robust production levels while capitalizing on rising iron ore prices.
Market analysts at JPMorgan noted that both CSN and its publicly traded mining branch, CSN Mineracao, exceeded quarterly forecasts due to better cost management. They observed, “The beat was driven by strong performances from its key business units, mainly steel, mining, and cement,” suggesting that there may be upward revisions in consensus estimates for the company moving forward.
In summary, CSN’s fourth quarter presented a mixed financial picture with a net loss attributed to heightened financial expenses. Nevertheless, the company showcased robust core earnings and revenue growth, outstripping analysts’ predictions. With improved operational normalization in steelmaking and solid performance in mining, CSN remains a significant entity in Brazil’s industrial sector, with analysts predicting positive adjustments to future estimates.
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