BRASILIA, Oct 28 (Reuters) - Usinas Siderurgicas de Minas Gerais SA, Brazil’s largest listed flat steelmaker, on Friday said it narrowed its quarterly loss as it cut operating and financial costs.
Usiminas, as the company is commonly known, posted a third-quarter net loss of 107 million reais ($33.8 million) compared with a year-earlier loss of 1.04 billion reais.
Sales of steel were hurt by Brazil’s recession, which has slowed construction and reduced demand for appliances such as refrigerators, Usiminas said.
The company’s shares rose as much as 7.2 percent after the release of the results, considered better than expected by analyst Leonardo Correa of Banco BTG Pactual
“Usiminas posted a strong set of operational results,” Correa wrote in a note to clients. “We credit the beat mainly to stronger than expected steel price increases in the domestic market than we were modeling.”
In late morning trading, Usiminas rose 6.7 percent to 4.45 reais.
Net sales fell to 2.27 billion reais from 2.42 billion reais, but the decline was limited to 6.5 percent. Exports as a portion of total sales fell to 12 percent from 27 percent.
Lower costs helped the company record earnings before interest, taxes, depreciation and amortization, a gauge of operational profit known as EBITDA, of 307 million reais, a more than four-fold increase from a year earlier.
“Usiminas steel division alone reported an EBITDA of 295 million reais compared with BTG Pactual’s estimate of 185 million real expectation and EBITDA margin expanded to 14 percent from 3 percent,” Correa wrote.
$1 = 3.1643 reais Reporting by Anthony Boadle and Jeb Blount; Editing by W Simon and Meredith Mazzilli