Usiminas reported a substantial rise in first-quarter net income, posting 896 million reais ($178.32 million), an increase of 166% compared with the same quarter a year earlier. The company said foreign exchange gains tied to appreciation of the Brazilian real helped lift results and led the headline outperformance versus market forecasts.
A Reuters report said that analysts polled by LSEG had expected net profit of 190.9 million reais, indicating that the company beat consensus by a wide margin.
Despite the profit increase, Usiminas recorded weaker top-line and physical performance in the quarter. Net revenue fell 14% to 5.87 billion reais. Steel sales volumes declined by 8% to 1 million metric tons, while iron ore sales dropped 12% to 1.95 million tons. Those volume and revenue declines contrasted with the improved bottom line driven in part by foreign exchange movements.
Looking ahead to the second quarter, the company expects steel sales volumes to remain stable relative to the first quarter. However, management cautioned that cost of sales is likely to rise as a result of pressure from raw material, energy and freight prices. Within its mining unit, Usiminas forecast higher Q2 volumes but said those gains will be accompanied by increased costs related to maritime freight.
Corporate structure notes included that Usiminas is controlled by Ternium (NYSE:TX).
Key figures at a glance:
- First-quarter net profit: 896 million reais, up 166% year-on-year.
- Net revenue: 5.87 billion reais, down 14% year-on-year.
- Steel sales volumes: 1 million metric tons, down 8% year-on-year.
- Iron ore sales: 1.95 million tons, down 12% year-on-year.
The combination of stronger reported earnings and weaker sales volumes highlights a divergence between financial outcomes influenced by FX and the underlying operational trends in steel and mining. Management commentary points to margin pressure ahead from higher input and logistics costs, even as production in the mining unit is expected to increase in the near term.