Usiminas (USIM5) profit of R$1.263 billion in the first quarter, an increase of 5% year on year; Adjusted EBITDA down 36%

Usiminas (USIM5) recorded net income of R$1.263 billion in the first quarter of 2022 (Q1 22), an increase of 5% compared to the same quarter of 2020, but a decrease of 49% compared to the fourth quarter of 2021 (Q4 of 21). The earnings forecast was in line with analyst estimates compiled by Refinitiv, of R$1.25 billion.

Adjusted earnings before interest, tax, depreciation and amortization (Ebitda) totaled R$1.560 billion in the first quarter of 22, a decrease of 36% over the same period in 2021.

Net revenue, in turn, was R$7.845 billion, an increase of 11% year-on-year, but decreased by 3% from the fourth quarter of 2021. Refinitiv’s forecast was R$7.95 billion.

The steel company attributes the decline in profitability to the one-off, operational and financial impacts recorded in the fourth quarter of ’21, as well as the lower operating result recorded in the period.

Ebitda’s adjusted margin (Ebitda on net revenue) was 20% in the period, down 14 percentage points (pp) compared to margin reported in 1Q21.

Steel sales volume reached 1.135 million tons in the first quarter of ’22, a decrease of 10% compared to the volume reported in the first quarter of ’21.

Iron ore sales volume decreased by 17% in the first quarter of 2022, reaching 1.610 million tons.

Gross profit was R$1.715 billion in the first quarter of 2022, down 30% from the same quarter of 2021.

Total general and administrative expenses in the first quarter of the year amounted to R$ 2,230 million, an increase of 13% over the same quarter of the previous year.

The financial result for the first quarter of 2200 amounted to R$502 million, compared to a negative result of R$375.7 million in the first quarter of 21, due to net foreign exchange gain of R$434 million in the quarter, compared to a net foreign exchange loss of R$90 million. BRL and cash restatement for tax credits of R$377 million in the previous quarter.

Usiminas invested R$285 million between January and March 2022, an increase of 19% over the amount invested in the same period last year.

The company’s net cash amounted to R$1.049 billion at the end of March 2022, compared to net debt of R$1.674 billion in the same month of 2021.

The leverage index, measured as net debt/adjusted EBITDA, was -0.09 times in March 2022, an improvement of 0.41 times over the same period in 2021.

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