Chinalco could invest $426 million in Suriname bauxite project
If approved by parliament, Chinalco could begin construction by the middle of next year.
Brazilian steelmaker Usiminas reported a 77% drop in second-quarter net income from a year earlier, broadly in line with analyst expectations, after currency swings eroded revenues and output disruption reduced sales.
The company, formally known as Usinas Siderurgicas de Minas Gerais SA, said in a securities filing it made a net profit of 1.06 billion reais ($204.48 million) in the period, almost matching a Refinitiv poll forecast of 1.05 billion reais.
Net revenue totaled 8.53 billion reais, down 11% year-on-year but beating the 8.34 billion forecast by analysts.
Usiminas said currency volatility had led to a 306 million-real loss in the second quarter, against a 482.9 million-real net gain from foreign exchange moves a year ago.
Preferred shares were down 3.3% at 8.73 reais in early afternoon trade, whereas Brazil’s Bovespa stock index was up 0.36%.
Sales at Usiminas’ steel division dropped 17% after lower production as blast furnace No.2 has been halted for repair work since September 2021. Higher prices, however, improved operating margins.
Looking ahead, the company said its board of directors had given approval for blast furnace No.2 to resume operations by the end of October, but said its Ipatinga coking plant may have to reduce production.
Usiminas said it expects its third-quarter steel sales to be between 950,000 tonnes and 1.05 million tonnes, below the 1.1 million tonnes reported in the quarter through June. In the same period in 2021, sales reached 1.2 million tonnes.
Usiminas director Miguel Camejo told analysts in a conference call on Friday he expects stable demand for steel in Brazil over the coming quarters. Steel plates demand may rise in the second half of the year due to building of new energy projects.
In the mining division, second quarter iron ore sales rose 16% from a year ago and also increased versus a sluggish first quarter when heavy rainfall in Brazil limited output.
“The quarter was marked by strong steel results mainly as the company implemented price hikes for the automotive sector,” analysts at JPMorgan said.
BTG Pactual viewed the results as better than feared given the company’s operational issues but said they were still below potential. It made a “buy” call based on Usiminas’ discounted valuation – the stock has plunged almost 40% year-to-date.
($1 = 5.1838 reais)
(By Gabriel Araujo; Editing by Barbara Lewis and Nick Zieminski)
Comments