CSN Reports Q4 Net Loss but Exceeds Expectations in Core Earnings

CSN reports a Q4 net loss of 85 million reais but exceeds core earnings forecasts with EBITDA of 3.33 billion reais. Steel sales rose by 10.4% while iron ore sales decreased. Analysts express a positive outlook for future revisions on consensus estimates.

Brazilian steelmaker Companhia Siderúrgica Nacional (CSN) reported a net loss of 85 million reais (approximately $14.66 million) for the fourth quarter, attributed to elevated financial expenses. Despite this, the company surpassed market expectations for core earnings and revenues. Over the same quarter last year, CSN posted a profit of 851 million reais.

For Q4, CSN’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at 3.33 billion reais, reflecting an 8% decline from the previous year yet still outperforming analyst predictions of 2.87 billion reais. The company recorded net revenues of 12.03 billion reais, exceeding the estimated 11.8 billion reais. Steel sales increased by 10.4% year-on-year, while iron ore sales decreased by 3.7%.

CSN remarked, “The steelmaking operation took another step in the process of normalizing operations and recovering profitability,” citing improved volumes and higher prices bolstered by the domestic market, despite seasonal weaknesses. The mining sector’s production experienced some disruption due to rainy season conditions; however, it retained a strong production trajectory and benefited from rising iron ore prices.

According to analysts at JPMorgan, both CSN and its publicly traded mining division CSN Mineração (CMIN3) outperformed forecasts for the quarter due to unexpectedly favorable cost conditions. They identified robust contributions from CSN’s core business units—steel, mining, and cement—with expectations for upward revisions in consensus estimates as a result of the strong performance across sectors.

In summary, CSN faced a net loss in the fourth quarter due to high financial expenses but achieved impressive results in core earnings and revenue, exceeding analyst expectations. The company displayed resilience in its steel and mining operations, with an optimistic outlook for future performance as reflected in analyst commentary. The quarter’s results suggest a potential positive adjustment in market forecasts for CSN.

Original Source: www.tradingview.com