CSN has better-than-expected operating results in the 4th quarter, but profits plummet

CSN had a net profit of 197 million reais in the fourth quarter of last year, well below the approximately 1 billion reais obtained a year earlier, but the operating performance was higher than expected by the market, according to balance sheet data released at the end of Wednesday night.

The company, which in addition to steel operates in the cement, mining and energy markets, found cash generation measured by earnings before interest, taxes, depreciation and amortization (Ebitda) of 3.12 billion reais, down 16% over the result of 3.7 billion released for the fourth quarter of 2021. The margin plummeted from 34.9% to 27.1%.

Analysts, on average, expected CSN to disclose net income of around 1 billion reais and an operating result measured by Ebitda of 2.9 billion for the last three months of last year, according to data from Refinitiv.

The company found sales of 1 million tons of steel in the period, down 1% over a year earlier. The cost of board consumed in the fourth quarter was 3,923 reais per ton compared to 3,673 a year earlier. CSN mentioned that the result of the steel industry at the end of the year was “impacted by a commercial pace and by a dynamic of cooled prices”. Iron ore sales totaled 9.7 million tons, growth of 26% in the same comparison. “For 2023, the perspective is for production growth, with richer ore and prices that are positively surprising,” said the company in the balance sheet.

CSN ended December with a leverage of 2.21 times net debt over adjusted Ebitda, compared to 0.76 times at the end of 2021 and 1.69 times in the third quarter of last year.

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