Usiminas keeps positive results trajectory and begins a new phase after shareholders agreement : Usiminas Mecânica – Eng

Usiminas

Usiminas keeps positive results trajectory and begins a new phase after shareholders agreement

09-02-2018

Nippon and Ternium reported yesterday, among other measures, the closure of litigation and changes in corporate governance rights

For the fourth consecutive quarter, Usiminas has kept its recovery trajectory and presented positive financial results. The company, has disclosed today (02/09) its balance sheet for the fourth quarter of 2017, and is now entering a new phase from the announcement made yesterday by Ternium and Nippon Steel & Sumitomo Metal Corporation (NSSMC), which ends litigation involving the company shareholders. According to the balance sheet disclosed, Usiminas recorded a positive Ebitda Consolidated (earnings before interest, taxes, depreciation and amortization) of R$ 450 million in the last quarter of last year and R$ 2.2 billion in the accumulated of 2017. In the accumulated result in 2016, the Company's Adjusted Ebitda was R$ 660.4 million.

With the result of the last quarter of 2017, Usiminas reached an Adjusted EBITDA margin of 20.4% in the year, compared to 7.8% in the previous year. In the consolidated period of 2017, it registered net income of R$ 315.1 million, against a net loss of R$ 576.8 million in 2016.

In 4Q17, the company posted a net revenue of R$ 3.1 billion, against R$ 2.7 billion in 3Q17, scaling up 12.4% due to higher sales volume in the Steelmaking and Mining units, a 7.3% increase in the volume of steel sold and a 287.3% increase in external sales of iron ore. In the in the accumulated of 2017, net revenue was R$ 10.7 billion, compared to R$ 8.5 billion in 2016, a growth of 27% due to higher sales volumes of steel and iron ore, as well as and the rise on average prices throughout the year.

Shareholders Agreement

With the agreement announced yesterday, Usiminas is now starting a new phase in its operations, supporting the company's resumption process. According to the document, new rules were established for the relations of shareholders and members of the Usiminas control group and the adoption of all necessary measures to solve and amicably settle pending legal disputes with the company.

Among the measures disclosed in the announcement, it was determined that each party will have the right to nominate the company Chairman of the Board and CEO, respectively, for two consecutive two-year terms (four consecutive years each). In a display of support and confidence in the current administration, the controllers plan to elect current CEO Sergio Leite to remain in office for the May 2018 to April/May 2020 term.

Regarding legal disputes, shareholders were obligated to take all necessary actions and steps to settle pending legal or administrative litigation related to Usiminas.

Ibovespa Leadership

For Usiminas, the year of 2017 was also marked by good results in the capital markets – the company's ordinary shares were the most valued in Ibovespa in the period and the main global risk assessment agencies – Standard and Poors, Fitch and Moody's – raised the company's credit note.

According to CEO Sergio Leite, “the results presented by Usiminas consolidate a recovery trajectory initiated after the second quarter of 2016, thanks to a focused work of Usiminas team, with management goals established and oriented mainly on the generation of results, pursuit of excellence in customer service and improvement of internal atmosphere, among others”.

Production and Sales

Crude steel production at Ipatinga Plant in the fourth quarter of last year reached 747 thousand tons, slightly lower than in the previous quarter (3Q17). However, the production of rolled products totaled 1.1 million tons in 4Q17, the highest of the last eight quarters, and 4 million tons in the consolidated of the year. An increase of 11.8% compared to the production of rolled products registered in 2016, of 3.6 million tons.

Steel sales, in turn, totaled 1.1 million tons in the last quarter of 2017, scaling up 7.3% compared to the previous quarter (3Q17). The domestic market was the destination of 82% of the company's total sales in the fourth quarter. In the consolidated total of the year, total sales volume reached the mark of 4 million tons, against the 3.7 million tons registered in 2016, a 10.2% increase.

Business Units

In the steel transformation segment, Soluções Usiminas' net revenue remained stable in comparison to the third quarter of the year, totaling R$ 667 million. Although there was an increase on the average price of 5.5%, there was lower volume of sales and services in the period. In 4Q17, the Usiminas Solutions Adjusted EBITDA was R$ 18.6 million. Adjusted EBITDA margin in the period was 2.8% compared to 2.7% in the previous quarter. Regarding the annual adjusted EBITDA, Soluções Usiminas registered the highest index in its history, from R$ 101.1 million last year, against R$ 48.8 million in 2016, and adjusted EBIT margin of 4.0% in 2017 and 2.6% in the previous year.

In the capital goods unit, the main contracts in the year were allocated to the mining, pulp and paper, oil and gas, bridges, wagons and industrial assembly sectors. In the fourth quarter of the year, net revenue in this business unit of R$ 50.7 million was 31.2% lower than in 3Q17, mainly due to the slowdown in the market that led to a reduction in the equipment, structures and assemblies due to the stagnation of projects in the oil and gas and infrastructure sectors in the country. In the consolidated statement of the year, net revenue was R$ 287 million, against R $ 568.3 million in the previous year.

The Adjusted EBITDA of the area in the 4Q17 was negative R$ 2.2 million, against the negative R$ 25.5 million in 3Q17, due to the adhesion to the Regularize Program in 3Q17, with the collection of R$ 22.5 million to the Government of Minas Gerais. In this particular case, the Adjusted EBITDA margin was 4.3% in the fourth quarter, compared to 34.6% in the previous three months. In the accumulated of the year, the Adjusted EBITDA margin was 11.6% negative, against a positive 2.1% in 2016.

In the Mining business, Usiminas registered in the last three months of 2017 a production of 1.5 million tons against 1.1 million tons in 3Q17. In the consolidated last year, production volume reached 4 million tons, a volume 44% higher than in 2016, mainly due to the resumption of operations of two plants of Mineração Usiminas, “Mina Leste” (East Mine) and “Flotação” (Flotation Mine). Sales were of 3.7 million tons in the year, an increase of 14.6% attributed to the resumption of exports occurred in the third quarter of the year.

Still regarding this business unit, the net revenue registered in 4Q17 was R$ 205.9 million, a 69.6% increase when compared to the previous three months, of R$ 121.4 million. Adjusted EBITDA reached R$ 41.4 million in the fourth quarter, against R$ 26.6 million in 3Q17, an increase of 55.9%. The Adjusted EBIT margin in Mining was 20.1% in 4Q17, against 21.9% in the previous quarter.

A Year to be Remembered

Unlike other companies that see 2017 as a year to be forgotten, CEO Sergio Leite states that for Usiminas, it is a year to be remembered forever. “It was the year that Usiminas completed 55 years of operation and witnessed its history taking a new turn. Until then, we suffered the consequences of the severe crises in the steel market and the Brazilian economy, which almost took the company to an extremely critical situation. For this year 2018, we will keep our strategy always focused on finding solid and sustainable results for Usiminas”, he says.


Categorizados em: Notícias, Releases