UPDATE 1-Debt weighs on Brazil's Usiminas results; margins fall

viernes 14 de febrero de 2014 08:06 GYT

(Recasts to add earnings breakdown, company comment)

SAO PAULO Feb 14 (Reuters) - Fourth-quarter net income at Brazil's Usinas Siderúrgicas de Minas Gerais SA tumbled as rising debt-servicing expenses counteracted efficiency gains and higher prices for some domestic products, company data showed on Friday.

Brazil's largest flat steelmaker, commonly known as Usiminas, earned 47 million reais ($19 million) in the quarter, down 59 percent from 114.6 million reais in the prior quarter, according to a securities filing. It reversed a net loss of 283.1 million reais a year earlier, the filing added.

According to four out of six analysts polled by Reuters, profit at Usiminas was expected to be around 73 million reais for the quarter. The other two analysts had estimated a net loss of 45 million reais.

Operational indicators pointed to a mixed performance in the quarter, with a decline in consolidated profit margins and weaker-than-expected results at its mining unit.

Steel output and sales fell due to seasonal reasons, but Usiminas responded to that by controlling costs and putting a lid on growth in sales, general and administrative (SG&A) expenses.

Management will discuss fourth-quarter results at a conference call with investors later in the day.

A slump in the currency during the second half of 2013 drove up expenses related to debt-servicing, paring back profits, the filing said. Financial expenses soared 62 percent to 391.9 million reais in the quarter from the prior three months.

Revenue fell 0.2 percent on a quarterly basis after the implementation of domestic price hikes for some products failed to offset falling sales volumes.   Continuación...