UPDATE 2-Brazil's CSN sees margins, ore sales up in 2014

viernes 28 de febrero de 2014 13:17 GYT

SAO PAULO Feb 28 (Reuters) - Brazilian steelmaker Companhia Siderúrgica Nacional SA expects profit margins to rise in 2014 as a result of cost-cutting measures and sees iron ore sales increasing from the prior year, executives said on Friday.

Known as CSN, Brazil's second-largest producer of flat steel products posted an unexpected 487.1 million reais ($210 million) loss in the fourth quarter after settling a tax bill on foreign earnings.

Adjusted earnings before interest, tax, depreciation and amortization, a measure of profitability known as EBITDA, rose to 32 percent of net revenue at the end of December. The so-called EBITDA margin was 31 percent in the previous three months.

Margins should continue to improve due to "a significant reduction in costs," commercial director Luis Fernando Martinez said on a conference call to discuss quarterly earnings.

Sales, general, and administrative expenses jumped 13 percent from the previous quarter to 355 million reais, with the company citing administrative provisions.

The company, whose steel mill is running at nearly full capacity, sees steel sales stable this year at 6.1 million tonnes, while iron ore sales from its mining operations is expected to rise to 44 million tonnes from 25.67 million tonnes in 2013, executives said on the call.

The company expects investments to total 2.8 billion reais in 2014, investor relations officer David Salama said. While the number is little changed from the previous year, the firm sees more of its investment focused toward the mining sector.

A major overhang on CSN shares has been the company's conflict with a group of Asian steelmakers that own a share in CSN's Namisa ore unit. The companies want to exit the partnership by exercising a put option, which would force CSN to pay them compensation.   Continuación...