Brazilian steelmaker Usiminas has posted a wider than expected net loss in Q4, as the company struggles to generate cash to pay its financial obligations.
The flats steelmaker said on Thursday its net loss in Q4 rose 56 percent, quarter-on-quarter, to BRL 1.6 billion. In Q4 2014, net loss was BRL 117 million. As for the full-year of 2015, Usiminas’ losses totaled BRL 3.7 billion, as opposed to a net profit of BRL 208.5 million seen in the year prior.
The steelmaker attributed the net loss in 2015 mainly to an impairment of assets of BRL 2.6 billion as well as to higher financial expenses related to a foreign exchange devaluation of 47 percent in 2015. A lower operational performance of its steel, mining and steel transforming units also contributed for the company’s negative performance in the full year of 2015.
Usiminas reverted a 11.3 percent EBITDA margin in Q4 2014 and posted a 75.7 percent negative performance for the indicator in Q4. Adjusted EBITDA margin went from 11.7 percent in Q4 2014 to down 10.4 percent in Q4 2015. Adjusted EBITDA in Q4 was down BRL 250 million.
Net revenues in Q4 diminished 7 percent, year-on-year, to BRL 2.4 billion. As for the company’s full-year results, revenues declined 13 percent, year-on-year, to BRL 10.2 billion.
Following the same downtrend, both steel and iron ore sales volumes in Q4 declined by 3.3 and 42.2 percent, year-on-year, to 1.2 million and 670,000 mt, respectively. In 2015, steel and iron ore sales volumes diminished by 11 and 33 percent, year-on-year, reaching 4.9 and 3.7 million mt, respectively.
Usiminas said this week it’s currently “analyzing all available alternatives” to increase cash flow generation, so it can improve the profile of its debts, while reinforcing its capital structure.
Usiminas consolidated gross debt on December 12, 2015 was BRL 7.9 billion.