BRASILIA, Feb 17 (Reuters) - Brazilian steelmaker Usinas Siderúrgicas de Minas Gerais SA (Usiminas) on Friday reported a fourth-quarter net loss of 195 million reais ($63.13 million), but said a return to operating profit showed the company’s results were improving after a series of heavy losses.
The net loss, which stemmed partly from provisions for tax-related losses and the end of supply contracts, was significantly lower than the 1.6 billion reais loss the company posted a year earlier, when it took hefty writedowns on assets due to lower iron ore and steel prices.
The company posted adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of 234 million reais.
Brazil’s worst recession on record has slowed construction and automobile sales, causing a slump in domestic steel demand. Usiminas, which is entangled in a battle between controlling shareholders Techint Group and Nippon Steel & Sumitomo Metal Corp, has been hit badly by the slump.
Despite the loss, Usiminas Chief Executive Romel de Souza said in an interview the results showed the company was improving, pointing to operating profit of 223 million reais, the company’s best since the first quarter of 2014.
“The result is positive and the trend is to continue improving,” de Souza said. “It shows we are getting positive results from our operations ... the net profit is negative because of non-recurring items.”
Usiminas will look to increase the variety of steel it produces, De Souza said, introducing seven new types in 2017 in an effort to improve sales.
De Souza also said he was confident Usiminas will be able to access funds from its mining subsidiary in order to help make debt payments, a move that was blocked by one of its shareholders.
De Souza said negotiations with Sumitomo, which owns 30 percent of the Mineração Usiminas SA subsidiary, are ongoing but declined to give a timeline as to when the issue might be resolved.
Usiminas shares were flat at 5.46 reais in Friday afternoon trading. ($1 = 3.0889 Brazilian reais) (Reporting by Stephen Eisenhammer; editing by Jason Neely, G Crosse)