CSN reported a fourth-quarter net loss of 85 million reais while exceeding expectations in core earnings and revenues, driven by strong performance in steel and mining operations. Analysts project a positive outlook for the company despite challenging financial conditions.
Brazilian steelmaker CSN, identified as one of the largest in Brazil, reported a net loss of 85 million reais ($14.66 million) for the fourth quarter of 2022, a stark contrast to the profit of 851 million reais in the same period the previous year. This loss was attributed to elevated financial expenses, despite core earnings and revenues surpassing market expectations.
In terms of performance metrics, CSN’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) reached 3.33 billion reais, an 8% decline from last year, yet exceeding analyst projections of 2.87 billion reais. The company’s net revenue for the quarter was reported at 12.03 billion reais, which outperformed the anticipated 11.8 billion reais. Steel sales increased by 10.4% compared to the prior year, while iron ore sales faced a downturn of 3.7%.
CSN stated, “The steelmaking operation took another step in the process of normalizing operations and recovering profitability,” noting improvements in volumes and pricing, stimulated by the domestic market despite encountering seasonal challenges. Although the start of the rainy season impacted mining volumes, CSN highlighted that it “maintained a solid production pace and managed to benefit from the upward trajectory of iron ore prices.”
Analysts from JPMorgan remarked that CSN and its mining arm, CSN Mineracao, surpassed their quarterly forecasts due to lowered costs, indicating a favorable outlook. The report noted, “The beat was driven by strong performances from its key business units, mainly steel, mining and cement,” suggesting that an upward adjustment of consensus estimates is forthcoming.
In summary, Brazil’s CSN reported a fourth-quarter net loss, primarily due to considerable financial expenses; however, the company demonstrated strong core earnings and revenue performance that exceeded market predictions. The steel sector showed resilience, aided by domestic market strength, while mining managed to cope with seasonal disruptions despite facing challenges in iron ore sales. Analysts maintain an optimistic outlook for CSN’s future performance, reflecting confidence in its key business segments.
Original Source: www.tradingview.com
