Brazil's Usiminas first-quarter profit falls 93%

Brazilian steelmaker Usiminas USIM3 reported on Tuesday a 93% decline in its first-quarter net profit, despite the slight uptick in steel and iron ore sales.

The company posted profit of 36 million reais ($6.97 million)for the first three months of 2024, compared with 544 million reais a year earlier.

Usiminas sold 1.04 million metric tons of steel in the period, or 1% above the figure reported a year earlier, with the automotive sector leading the purchases, the company said, adding that it expects sales to be flat in the second quarter.

Sales of iron ore products grew 4% year-on-year to 1.96 million tons. Significant volatility in the price of iron ore negatively affected the pricing of Usiminas' exports, which accounted for 64% of total sales of the commodity, it said.

"In the quarter there were greater sales of products with discounts based on quality, also affecting the average value," the firm said.

Its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) fell 47% to 416 million reais, but still landed above the estimate of analysts polled by LSEG of 387 million reais.

($1 = 5.1658 reais)