(Adds details from release and conference call with analysts, background and share moves)
SAO PAULO, Aug 13 (Reuters) - Steel producer CSN is selling assets in an effort to reduce its heavy debt burden, executives said on Thursday, shortly after Brazil’s No. 2 maker of flat steel posted a quarterly loss that dragged shares to their lowest level in over a decade.
CSN swung to a net loss of 614.6 million reais ($175.1 million) in the second quarter while adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) dropped 39 percent from the same quarter a year ago to 801 million reais.
Shares in the company, which is formally known as Companhia Siderúrgica Nacional SA, sank nearly 8 percent on Thursday.
Analysts have been closely watching CSN’s ability to service its mounting debt in the wake of a weaker currency and lower iron ore prices. Debt excluding cash holdings reached 5.6 times EBITDA in the quarter, up from 2.7 times EBITDA a year earlier.
“The whole company is focused on preserving cash, reducing debt levels and improving EBITDA,” Chief Executive Officer Benjamin Steinbruch said on a Thursday conference call to discuss results.
“We have accumulated excellent assets over time, but with changes in the cost of capital, the fall in iron-ore prices, the decline in the domestic market, we are working to return our focus to our core business,” he said.
Executive director Paulo Caffarelli said on the call that asset sales efforts had already begun and that CSN had already hired banks to assist in the process.
CSN, along with other Brazilian steelmakers, is struggling with weak domestic demand as the economy slows. Domestic sales made up 60 percent of CSN’s global steel sales in the quarter, down from 73 percent a year earlier.
As a significant producer of iron ore, the company is also feeling the brunt of weak prices for the main steel-making ingredient .IO62-CNI=SI, which languished near six-year lows during the quarter.
$1 = 3.51 Brazilian reais Reporting by Asher Levine; Editing by Christian Plumb and Chris Reese