CSN Reports Q4 Net Loss but Surpasses Earnings Expectations

CSN reported a fourth-quarter net loss of 85 million reais but exceeded expectations in core earnings with an EBITDA of 3.33 billion reais. The company saw strong growth in steel sales, while iron ore sales dipped slightly. Analysts predict an optimistic outlook following the company’s performance, which outperformed forecasts.

Brazilian steelmaker CSN (CSNA3) reported a net loss for the fourth quarter, attributing it to elevated financial expenses. Despite this, core earnings and revenues surpassed market forecasts, showcasing resilience in key segments of the business.

In its recent filing, CSN disclosed a net loss of 85 million reais (approximately $14.66 million) for the October-December quarter, contrasting sharply with a profit of 851 million reais reported in the same period last year. The company recorded adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of 3.33 billion reais, which, although an 8% decline year-on-year, still exceeded analysts’ expectations of 2.87 billion reais. Net revenue for the quarter reached 12.03 billion reais, outperforming analysts’ projections of 11.8 billion reais. Steel sales increased by 10.4% year-on-year, while iron ore sales experienced a slight decline of 3.7%.

CSN remarked, “The steelmaking operation took another step in the process of normalizing operations and recovering profitability,” crediting strong performance in volumes and pricing, particularly due to improvements in the domestic market amid weaker seasonal patterns.

Additionally, while the mining division faced some disruptions owing to the rainy season, it “maintained a solid production pace and managed to benefit from the upward trajectory of iron ore prices,” according to CSN.

Market analysts at JPMorgan noted that CSN, along with its mining division CSN Mineracao (CMIN3), surpassed forecasts largely attributed to better-than-expected costs. They stated, “The beat was driven by strong performances from its key business units, mainly steel, mining, and cement,” and anticipated an upward revision of consensus estimates.

In summary, despite posting a net loss in the fourth quarter, CSN demonstrated robust core earnings and revenue performance that exceeded market expectations. The company’s steel operations showed signs of recovery, while its mining business managed to sustain production levels amidst seasonal challenges. Analysts remain optimistic about CSN’s future, anticipating revisions to earnings estimates based on strong performance indicators across its divisions.

Original Source: www.tradingview.com