Part of the Usiminas team in the Blast Furnace 3 Control Room at the Ipatinga Plant: with a huge dedication from our entire team during the relining, the equipment will feature important improvements that will increase its operational and environmental efficiency.
HIGHLIGHTS 3Q23
- Steel sales 1.0 million tons;
- Iron ore sales of 2.4 million tons;
- Adjusted EBITDA negative R$20 million;
- Net loss of R$166 million;
- Cash Position R$5.7 billion;
- Net debt/EBITDA of 0.21x.
Market data on 09/30/2023
USIM5 R$6.64/share
B3
USIM3 R$6.94/share
US/OTC | USNZY | US$1.27/ADR | ||||
XUSI €1.39/share
LATIBEX
XUSIO €1.32/share
Consolidated - R$ million | 3Q23 | 2Q23 | ∆ | 3Q22 | ∆ | 9M23 | 9M22 | ∆ | |
Steel Sales Volume (000 t) | 1,021 | 972 | 5% | 1,047 | -2% | 3,028 | 3,269 | -7% | |
Iron Ore Sales Volume (000 t) | 2,391 | 2,398 | 0% | 2,242 | 7% | 6,672 | 6,241 | 7% | |
Net Revenue | 6,714 | 6,887 | -3% | 8,434 | -20% | 20,857 | 24,811 | -16% | |
Adjusted EBITDA | (20) | 366 | - | 836 | - | 1,129 | 4,325 | -74% | |
Adjusted EBITDA Margin | 0% | 5% | - 6 p.p. | 10% | - 10 p.p. | 8% | 17% | - 10 p.p. | |
Net Income or Loss | (166) | 287 | - | 609 | - | 666 | 2,932 | -77% | |
Investments (CAPEX) | 886 | 879 | 1% | 604 | 47% | 2,346 | 1,318 | 78% | |
Working Capital | 7,900 | 9,444 | -16% | 10,700 | -26% | 7,900 | 10,700 | -26% | |
Cash and Cash Equivalents | 5,720 | 4,941 | 16% | 5,137 | 11% | 5,720 | 5,137 | 11% | |
Net Debt | 353 | 965 | -63% | 965 | -63% | 353 | 965 | -63% | |
Net Debt/Adjusted EBITDA | 0.21x | 0.38x | -0.17x | 0.14x | 0.06x | 0.21x | 0.14x | 0.06x | |
For Immediate Release - Belo Horizonte, October 27, 2023. Usinas Siderurgicas de Minas Gerais SA - Usiminas (B3: USIM3, USIM5 and USIM6; OTC:
USDMY and USNZY; Latibex: XUSIO and XUSI) today announces its third quarter results of fiscal year 2023 (3Q23). The Company's operating and financial information, except when otherwise stated, is presented based on consolidated numbers in Brazilian Real, in accordance with the IFRS (International Financial Reporting Standards). The comparisons made in this release take into account the second quarter of 2023 (2Q23), except stated otherwise. Statements contained in this release regarding business prospects, projections of operational and financial results and references to the Company's growth potential constitute mere predictions, based on Management's expectations regarding its future performance. These expectations are highly dependent on market behavior, the economic situation in Brazil, the industry and international markets, and are therefore subject to change.
1
Operational and Economic-Financial Performance
Consolidated Operating Results
R$ thousand | 3Q23 | 2Q23 | ∆ | 3Q22 | ∆ | |
Net Revenues | 6,714,210 | 6,887,396 | -3% | 8,434,426 | -20% | |
Domestic Market | 5,561,514 | 5,625,511 | -1% | 7,003,201 | -21% | |
Exports | 1,152,696 | 1,261,885 | -9% | 1,431,225 | -19% | |
COGS | (6,538,854) | (6,304,931) | 4% | (7,430,460) | -12% | |
Gross Profit | 175,356 | 582,465 | -70% | 1,003,966 | -83% | |
Gross Margin | 2.6% | 8.5% | - 5.8 p.p. | 11.9% | - 9.3 p.p. | |
Operating Income and Expenses | (420,010) | (452,008) | -7% | (362,001) | 16% | |
Selling Expenses | (110,685) | (155,479) | -29% | (139,207) | -20% | |
General and Administrative | (165,941) | (148,267) | 12% | (140,384) | 18% | |
Other Operating Income and expenses | (225,681) | (210,400) | 7% | (146,963) | 54% | |
Participation in the Results of Associate and Jointly-controlled subsidiaries | 82,297 | 62,138 | 32% | 64,553 | 27% | |
EBIT | (244,654) | 130,457 | - | 641,965 | - | |
EBIT Margin | -3.6% | 1.9% | - 5.5 p.p. | 7.6% | - 11.3 p.p. | |
Depreciation and Amortization | 261,514 | 262,314 | 0% | 224,953 | 16% | |
EBITDA (Instruction CVM 527) | 16,860 | 392,771 | -96% | 866,918 | -98% | |
EBITDA Margin (Instruction CVM 527) | 0.3% | 5.7% | - 5.5 p.p. | 10.3% | - 10.0 p.p. | |
(-) Equity in the Results of Associate and Jointly-controlled subsidiaries | (82,297) | (62,138) | 32% | (64,553) | 27% | |
(+) Jointly-controlled subsidiaries proportional EBITDA | 42,843 | 41,940 | 2% | 36,421 | 18% | |
(-)Impairment | 2,680 | (6,214) | - | (3,160) | - | |
Adjusted EBITDA | (19,914) | 366,359 | - | 835,626 | - | |
Adjusted EBITDA Margin | -0.3% | 5.3% | - 5.6 p.p. | 9.9% | - 10.2 p.p. | |
Main non-recurring itens | - | - | - | - | - | |
Adjusted EBITDA Excluding Non-Recurring Itens | (19,914) | 366,359 | - | 835,626 | - | |
Adjusted EBITDA Excluding Non-recurring Itens Margin | -0.3% | 5.3% | - 5.6 p.p. | 9.9% | - 10.2 p.p. |
Net Revenue
Net Revenue in the 3Q23 reached R$6.7 billion, 2.5% lower than in the 2Q23 (R$6.9 billion), with declines in all Business Units. The factors that led to these variations will be explained in the Business Unit Section of this Release.
Cost of Goods Sold - COGS
Cost of goods sold (COGS) in the 3Q23 totaled R$6.5 billion, a 3.7% increase compared to the 2Q23 (R$6.3 billion), with increase in the Steel Unit. Variations will be explained in the Business Unit Section of this Release.
Gross profit
Gross profit was R$175 million in 3Q23, 69.9% lower than in the 2Q23 (R$582 million).
Operating Income and Expenses
Sales expenses in the 3Q23 were R$111 million, 28.8% lower than the previous quarter (2Q23: R$155 million), with lower sales expenses in the Mining Unit.
In the 3Q23, General and Administrative Expenses totaled R$166 million, 11.9% higher than the previous quarter (2Q23: R$148 million), mainly with higher expenses in the Steel Unit.
Other operating income (expenses) totaled negative R$226 million in 3Q23, expenses 7.3% higher than the previous quarter (2Q23: negative R$210 million), with higher expenses in the Steel and Mining Units.
Share in the results of subsidiaries and jointly controlled and associate companies totaled R$82 million in 3Q23, expenses 32.4% higher than the previous quarter (2Q23: R$62 million), with higher revenues in the Steel and Mining Units.
Thus, the Operating income (expenses) were a negative R$420 million in the 3Q23 against negative R$452 million in the 2Q23.
2
Adjusted EBITDA reached a negative R$20 million in the 2Q23, R$386 million less than that accounted in the 2Q23 (R$366 million). Adjusted EBITDA margin was 0.3% in the 3Q23, compared to 5.3% in the previous quarter.
Adjusted EBITDA
Consolidated (R$ thousand) | 3Q23 | 2Q23 | 3Q22 | 9M23 | 9M22 | |||||
Net Income (Loss) | (165,586) | 287,357 | 608,575 | 665,847 | 2,931,674 | |||||
Income Tax / Social Contribution | (176,883) | 48,572 | 204,275 | 61,504 | 1,181,937 | |||||
Financial Result | 97,815 | (205,472) | (170,885) | (301,101) | (424,527) | |||||
Depreciation, Amortization and depletion | 261,514 | 262,314 | 224,953 | 772,498 | 668,185 | |||||
EBITDA - Instruction CVM - 527 | 16,860 | 392,771 | 866,918 | 1,198,748 | 4,357,269 | |||||
(-) Equity in the Results of Associate and Jointly-controlled subsidiaries | (82,297) | (62,138) | (64,553) | (189,482) | (155,594) | |||||
(+) Jointly-controlled subsidiaries proportional EBITDA | 42,843 | 41,940 | 36,421 | 123,474 | 126,925 | |||||
(-) Impairment of Assets | ||||||||||
2,680 | (6,214) | (3,160) | (3,534) | (3,160) | ||||||
Adjusted EBITDA | (19,914) | 366,359 | 835,626 | 1,129,206 | 4,325,440 | |||||
Adjusted EBITDA Margin | -0.3% | 5.3% | 9.9% | 5.4% | 17.4% | |||||
Adjusted EBITDA is calculated based on the net profit (loss) for the year, reversing: (a) income tax and social contribution; (b) the financial result; (c) depreciation, amortization and depletion; (d) participation in the results of jointly controlled and associated companies;
- impairment of assets; and including a proportional EBITDA of 70% of Unigal and other jointly controlled companies.
Consolidated Adjusted EBITDA and Adjusted
EBITDA Margin (R$ million):
9.9% | 10.8% | ||||||||
7.6% | |||||||||
5.3% | |||||||||
836 | 783 | -0.3% | |||||||
579 | 366 | ||||||||
(20) | |||||||||
3Q22 | 4Q22 | 1Q23 | 2Q23 | 3Q23 |
Consolidated Financial Result
R$ thousand | 3Q23 | 2Q23 | ∆ | 3Q22 | ∆ | 9M23 | 9M22 | ∆ | |
Financial Income | 295,323 | 295,276 | 0% | 434,235 | -32% | 892,774 | 964,148 | -7% | |
Financial Expenses | (260,810) | (261,505) | 0% | (238,226) | 9% | (711,779) | (641,522) | 11% | |
Net Currency Exchange Variation | (132,328) | 171,701 | - | (25,124) | 427% | 120,106 | 101,901 | 18% | |
Exchange variation on assets | 72,030 | (81,341) | - | 165,523 | -56% | (60,319) | 156,561 | - | |
Exchange variation on liabilities | (204,358) | 253,042 | - | (190,647) | 7% | 180,425 | 26,007 | 594% | |
FINANCIAL RESULT | (97,815) | 205,472 | - | 170,885 | - | 301,101 | 424,527 | -29% | |
+ Appreciation / - Depreciation of Exchange Rate (R$/US$) | -3.9% | 5.1% | - 9.1 p.p. | -3.2% | - 0.7 p.p. | 4.0% | 3.1% | + 0.9 p.p. | |
The Financial result in the 3Q23 was negative R$98 million, R$303 million lower than in the previous quarter (2Q23: R$205 million), with the accounting of foreign exchange losses of R$132 million, compared to net foreign exchange gains of R$172 million accounted in the previous quarter.
Net Profit (Loss)
R$ thousand | 3Q23 | 2Q23 | ∆ | 3Q22 | ∆ | 9M23 | 9M22 | ∆ | |
EBIT | (244,654) | 68,319 | - | 577,412 | - | 426,250 | 3,533,490 | -88% | |
EBIT Margin | -3.6% | 1.0% | - 4.6 p.p. | 6.8% | - 10.5 p.p. | 2.0% | 14.2% | - 12.2 p.p. | |
Financial Result | (97,815) | 205,472 | - | 170,885 | - | 301,101 | 424,527 | -29% | |
Operating Profit or Loss | (342,469) | 335,929 | - | 812,850 | - | 727,351 | 4,113,611 | -82% | |
Income Tax / Social Contribution | 176,883 | (48,572) | - | (204,275) | - | (61,504) | (1,181,937) | -95% | |
Net Income or Loss | (165,586) | 287,357 | - | 608,575 | - | 665,847 | 2,931,674 | -77% | |
Net Margin | -2.5% | 4.2% | - 6.6 p.p. | 7.2% | - 9.7 p.p. | 3.2% | 11.8% | - 8.6 p.p. |
3
In the 3Q23, the Company recorded net loss of R$166 million, R$453 million less than the net profit presented in the previous quarter (2Q23 R$287 million), mainly affected by the lower operating result and exchange losses accounted in the 3Q23.
Working capital
In the 3Q23, working capital was R$7.9 billion, 16.3% lower than in the2Q23 (R$9.4 billion).
The main variations were:
• Reduction of Inventories by R$810 million, mainly with the slab inventories. At the end of the 3Q23, Usiminas had 148 thousand tons of slabs to supply production during the Blast Furnace 3 revamp;
- Increase in Suppliers by R$405 million, with an increase in the average payment period in the quarter;
- Increase in Customer Advances by R$329 million.
Working Capital (R$ Million)
10,700 | 10,578 | 9,845 | 9,444 | 7,900 |
3Q22 | 4Q22 | 1Q23 | 2Q23 | 3Q23 |
Steel Inventories (Thousand Tons) | ||||
1,009 | 1,163 | 1,085 | 941 | |
821 | ||||
3Q22 | 4Q22 | 1Q23 | 2Q23 | 3Q23 |
Investments (CAPEX)
In the 3Q23, CAPEX totaled R$886 million, 0.8% higher than the 2Q23 (R$879 million), of which 83.2% was in the Steel Unit, 13.6% in the Mining Unit, and 3.2% in the Steel Processing Unit.
Cash and Indebtedness
867 | 879 | 886 | |||||
13 | 8 | 28 | |||||
189 | 61 | 121 | |||||
604 | 580 | ||||||
7 | 5 | ||||||
66 | 33 | ||||||
664 | 810 | 737 | |||||
532 | 543 | ||||||
3Q22 | 4Q22 | 1Q23 | 2Q23 | 3Q23 | |||
Steel | Mining | Steel Transformation | |||||
Consolidated Cash and Cash Equivalents on 09/30/23 was R$5.7 billion, 15.8% higher compared to the position on 06/30/23 (R$4.9 billion), due to the decrease in working capital by R$1.5 billion, partially compensated by CAPEX of R$886 million, as demonstrated below:
4
*"Others" detailed in Cash Flow in the Annexes Section.
On 09/30/23, Gross consolidated debt was R$6.1 billion, 2.8% higher than the gross
Consolidated Debt (R$ million)
debt on 06/30/23 (R$5.9 billion), with the effect of the 3.9% depreciation of the Real against the Dollar in the period.
0,14x
6,102
965
(5,137)
0,07X
6,121
284
(5,837)
Net Debt/ | |||
0,46X | 0,21X | ||
EBITDA | |||
965
5,905
(4,941)
On 09/30/23, Net Debt
was R$353 million, | 3Q22 | 4Q22 | 1Q23 | 2Q23 | 3Q23 | |||
Gross Debt | Cash and Cash Equivalents | Net Debt | ||||||
63.4% lower than the | ||||||||
net debt in the previous quarter (06/30/23: R$965 million). The variation between the periods is mainly due to the increase in the aforementioned Cash position, partially offset by the effect of exchange rate variation on the Company's debt, as shown below (in R$ million).
Debt composition by maturity on 09/30/23 was 3% in the short term and 97% in the long term, compared to 2% and 98%, respectively, on 06/30/23.
The chart below shows consolidated debt data:
R$ thousand | 30-set-23 | 30-jun-23 | Change | 30-Set-22 | Change | ||||
Short Term | Long Term | TOTAL | TOTAL | Sep23/Jun23 | TOTAL | Set23/Set22 | |||
Local Currency | 112,075 | 2,192,723 | 2,304,798 | 38% | 2,223,831 | 4% | 2,039,280 | 13% | |
CDI | 105,200 | 2,192,389 | 2,297,589 | - | 2,215,917 | 4% | 2,028,120 | 13% | |
Others | 6,875 | 334 | 7,209 | - | 7,914 | -9% | 11,160 | -35% | |
Foreign Currency* | 46,984 | 3,721,852 | 3,768,836 | 62% | 3,681,658 | 2% | 4,062,578 | -7% | |
Gross Debt | 159,059 | 5,914,575 | 6,073,634 | 100% | 5,905,489 | 3% | 6,101,858 | 0% | |
Cash and Cash Equivalents | - | - | 5,720,296 | - | 4,940,641 | 16% | 5,137,298 | 11% | |
Net Debt | - | - | 353,338 | - | 964,848 | -63% | 964,560 | -63% | |
Gross Debt (Principal Only) | - | - | 5,962,903 | - | 5,822,306 | 2% | 6,064,340 | -2% | |
(*)100% of total foreign currency is US dollars denominated in the 3Q23 | |||||||||
The graph below shows the cash position and the debt profile (principal only) in millions of Reais on 09/30/23.
Gross Debt (principal only)
5,720 | Debt Duration: R$: | 47 months | |||||||||||||
US$: 31 months | |||||||||||||||
1,274 | |||||||||||||||
3,756 | |||||||||||||||
4,447 | |||||||||||||||
6 | 460 | 683 | 683 | 125 | 125 | 125 | |||||||||
2 | |||||||||||||||
Cash | 2023 | 2024 | - | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | |||||
2025 | |||||||||||||||
Cash (Local Currency) | Cash (Foreign Currency) | ||||||||||||||
Debt (Local Currency) | Debt (Foreign Currency) | ||||||||||||||
The following table details the issues that comprise the Company's debt:
Emissão | Série | Valor | Taxa | Vencimento | |
(Milhões) | |||||
Bonds | - | USD | 750 | 5,875% | 2026 |
8ª Emissão de Debêntures | 1ª Série | BRL | 300 | CDI + 1,50% | 2027 |
2ª Série | BRL | 400 | CDI + 1,70% | 2028 e 2029 | |
1ª Série | BRL | 160 | CDI + 1,45% | 2027 | |
9ª Emissão de Debêntures | 2ª Série | BRL | 966 | CDI + 1,65% | 2028 e 2029 |
3ª Série | BRL | 374 | CDI + 1,95% | 2030, 2031 e 2032 |
Operational Performance of the Business Units
Intercompany transactions are on an arm's length basis (market prices and conditions), and sales between
Business Units are carried out as sales between independent parties.
Income Statement per Business Units - Non Audited - Quarterly
R$ million | Mining | ||
3Q23 | 2Q23 | ||
Net Revenue | 793 | 905 | |
Domestic Market | 131 | 140 | |
Exports | 661 | 765 | |
COGS | (623) | (685) | |
Gross Profit or Loss | 169 | 220 | |
Operating Income amd Expenses | (67) | (115) | |
Selling | (70) | (116) | |
General and Administrative | (14) | (13) | |
Other Operating Income and expenses, Net | (37) | (23) | |
Participation in the Results of Associate and | 54 | 36 | |
Jointly-controlled subsidiaries | |||
EBIT | 102 | 105 | |
Depreciation and amortization | 81 | 77 | |
EBITDA (Instruction CVM 527) | 183 | 182 | |
EBITDA Margin | 23.1% | 20.1% | |
Adjusted EBITDA | 129 | 147 | |
Adj.EBITDA Margin | 16.2% | 16.2% |
*Consolidated 70% of Unigal and 100% of Usiminas Mecânica
Steel* | |
3Q23 | 2Q23 |
5,754 | 5,976 |
5,270 | 5,484 |
484493
(5,839) (5,651)
- 325
- (202)
- (29)
- (120)
- (172)
188119
- 123
179185
- 308
-1.2% 5.2%
- 184
-4.4% 3.1%
Steel Processing
3Q23 | 2Q23 |
2,009 | 2,100 |
2,001 | 2,095 |
8 | 5 |
(1,957) | (2,070) |
52 | 30 |
- (38)
- (12)
- (20)
- (6)
- -
17 | (9) | |
12 | 10 | |
28 | 2 | |
1.4% | 0.1% |
282
1.4% 0.1%
Adjustment
3Q23 | 2Q23 |
(1,841) | (2,093) |
(1,841) | (2,093) |
- | - |
1,881 | 2,102 |
39 | 8 |
- (97)
0 | 1 |
4 | 4 |
- (9)
- (93)
- (89)
- (10)
- (99)
6.8% 4.7%
7434
-4.0%-1.6%
Consolidated
3Q23 | 2Q23 |
6,714 | 6,887 |
5,562 | 5,626 |
1,153 | 1,262 |
(6,539) | (6,305) |
175 | 582 |
- (452)
- (155)
- (148)
- (210)
8262
- 130
262 | 262 |
17 | 393 |
0.3% | 5.7% |
- 366
-0.3% 5.3%
Income Statement per Business Units - Non Audited - Accumulated
R$ million | Mining | ||
9M23 | 9M22 | ||
Net Revenue | 2,481 | 2,805 | |
Domestic Market | 483 | 782 | |
Exports | 1,997 | 2,023 | |
COGS | (1,801) | (1,669) | |
Gross Profit (Loss) | 680 | 1,136 | |
Operating Income (Expenses) | (269) | (322) | |
Selling | (250) | (281) | |
General and Administrative | (38) | (31) | |
Other Operating Income (expenses), Net | (90) | (91) | |
Participation in the Results of Associate and | 109 | 81 | |
Jointly-controlled subsidiaries | |||
EBIT | 410 | 814 | |
Depreciation and amortization | 226 | 154 | |
EBITDA (Instruction CVM 527) | 637 | 968 | |
EBITDA Margin | 25.7% | 34.5% | |
Adjusted EBITDA | 529 | 887 | |
Adj.EBITDA Margin | 21.3% | 31.6% |
*Consolidated 70% of Unigal and 100% of Usiminas Mecânica
Steel* | |
9M23 | 9M22 |
18,121 | 22,126 |
16,527 | 19,061 |
1,594 | 3,065 |
(17,365) | (18,914) |
755 | 3,213 |
- (6)
- (175)
- (346)
- (347)
513862
3393,207
543519
8823,726
4.9% 16.8%
3712,867
2.0% 13.0%
Steel Processing
9M23 | 9M22 |
6,243 | 7,181 |
6,227 | 7,170 |
15 | 11 |
(6,081) | (6,605) |
162576
- (112)
- (47)
- (55)
- (10)
- | - | |
63 | 463 | |
32 | 21 | |
95 | 484 | |
1.5% | 6.7% |
95484
1.5%6.7%
Adjustment
9M23 | 9M22 |
(5,987) | (7,302) |
(5,987) | (7,302) |
- | - |
6,033 | 7,284 |
46 | (18) |
- (777)
1 | - |
14 | 14 |
- (4)
- (787)
- (795)
- (26)
- (821)
6.9% 11.2%
13487
-2.2%-1.2%
Consolidated
9M23 | 9M22 |
20,857 | 24,811 |
17,250 | 19,711 |
3,607 | 5,099 |
(19,214) | (19,904) |
1,643 | 4,907 |
(1,216) | (1,217) |
- (503)
- (418)
- (452)
189156
- 3,689
- 668
1,199 | 4,357 |
5.7% | 17.6% |
1,129 | 4,325 |
5.4% | 17.4% |
6
Business Unit - Mining
Operational and Sales Performance
In the 3Q23 production volume was 2.4 million tons, a 4.4% increase compared to the 2Q23 (2.3 million tons).
Sales volume was 2.4 million tons in the 3Q23, stable compared to the previous quarter.
Production and sales volumes are shown below:
Thousand tons
Production
Total Sales
Exports
Domestic Market - Usiminas
Domestic Market - Third Parties
3Q23
2,410
2,391
1,753
215
422
2Q23 | ∆ | 3Q22 | ∆ |
2,309 | 4% | 2,513 | -4% |
2,398 | 0% | 2,242 | 7% |
1,895 | -7% | 1,543 | 14% |
248 | -13% | 589 | -63% |
256 | 65% | 110 | 283% |
9M23
6,540
6,672
4,886
960
826
9M22 ∆
6,587 -1%
6,241 7%
4,157 18%
1,646 -42%
438 89%
The types of ore sold by market are shown below:
Domestic | Exports | Total | |
Market | |||
Granulated | 32% | 0% | 9% |
Sinter Feed | 66% | 99% | 90% |
Pellet Feed/ | 2% | 1% | 1% |
Concentrate | |||
% of total sales | 27% | 73% | 100% |
Exports in the 3Q23 totaled 1.8 million tons, equivalent to ten shipments, one ship less compared to the 2Q23 (1.9 million tons).
In the 3Q23, export distribution was 60% including ocean freight (CFR) and 40% without ocean freight, against 83% and 17% in the 2Q23, respectively.
Comments on the Results - Mining
Net income totaled R$793 million in the 3Q23, 12.4% less over the 2Q23 (R$905 million). In the 3rd quarter, there was a higher proportion of sales without sea freight and with lower iron content in addition to the appreciation of the Real against the Dollar, which, on average, varied 1.4% between the quarters. In the 3Q23, the average reference IODEX spot price for 62% Fe iron ore CFR China was US$114/t, which represented a 2.8% increase compared to the previous quarter (US$111/t).
Total production cash cost per ton was R$115.1/t or US$23.6/t in the 3Q23 against R$108.8/t (US$22.0/t) in the 2Q23, a 5.8% increase between the periods, this variation is due to higher costs with operating services, mainly with internal feeding transport and waste handling, higher costs with equipment maintenance and greater use of ROM from third-party areas in processing plants.
Cost of goods sold (COGS) in the 3Q23 was R$623 million, 9.0% lower than in the 2Q23 (R$685 million), mainly due to higher export sales without ocean freight and lower ocean freight rates on the export sales route.
In unit terms, COGS/ton in the 3Q23 (R$260.7/t) showed an 8.7%decrease compared to the 2Q23 (R$285.7/t), due to the same events mentioned above.
Sales Expenses totaled R$70 million in the 3Q23, a 39.4% decrease compared to the previous quarter (2Q23: R$116 million), as a result of lower export port costs, due to the lower volume sold and sales in commercial conditions with port costs for the customers' account.
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General and Administrative Expenses totaled R$14 million in the 3Q23, up 9.9% in relation to the amounts presented in the previous quarter (2Q22: R$13 million), due to renewal of IT licenses.
In the 3Q23, Other Operating Income (Expenses) were a negative R$37 million, against a negative R$23 million in the 2Q23, a R$14 million variation between quarters, mainly due to higher provisions for legal proceedings.
Adjusted EBITDA reached R$129 million in 3Q23, a 12.4% decrease compared to the 2Q23 (R$147 million). Adjusted EBITDA margin was 16.2% in the 3Q23 (2Q23: 16.2%).
Investments (CAPEX)
CAPEX totaled R$121 million in the 3Q23, against R$61 million accounted in the 2Q23, a 97.2% increase in investments over the previous quarter.
Business Unit - Steel
Operational and Sales Performance
Crude steel production at the Ipatinga plant was 352 Kt in the 3Q23, 15.4% lower over the 2Q23 (416 Kt). Rolled steel production at the Ipatinga and Cubatão mills totaled 1.0 million tons in the 3Q23,
a 5.3% increase over the previous quarter (2Q23: 988 Kt). In the 3Q23, 674 thousand tons of purchased
slabs were processed (2Q23: 586 thousand tons).
Thousand tons
Total Crude Steel
Purchased Slab Processed
Total Rolled Steel
Sales Volume
Domestic Market
Exports
3Q23
352
674
1,040
1,021
931
90
2Q23 | ∆ | 3Q22 | ∆ |
416 | -15% | 660 | -47% |
586 | 15% | 512 | 32% |
988 | 5% | 1,037 | 0% |
972 | 5% | 1,047 | -2% |
902 | 3% | 938 | -1% |
70 | 29% | 109 | -18% |
9M23
1,485
1,748
2,999
3,028
2,768
260
9M22 ∆
2,008 -26%
1,445 21%
3,200 -6%
3,269 -7%
2,753 1%
517 -50%
In the 3Q23, total sales volume amounted to 1.021 million tons of steel, 5.0% higher that in the 2Q23 (972 Kt), higher than the guidance provided by the Company for the period. In the domestic market, sales were 931 thousand tons in the 3Q23, a 3.2% increase in relation to the 2Q23, (902 thousand tons). Exports in the 3Q23 were 90 Kt, 28.5% higher than in the 2Q23 (70 Kt). Sales volume was 91% for the domestic market and 9% for exports (compared to 93% and 7% in the 2Q23).
Domestic Market Sales were distributed in the following segments:
Auto Industry
Distribution
Industry
3Q23
35.5%
28.6%
35.9%
2Q23 | ∆ | 3Q22 | ∆ |
36.0% | - 1 p.p. | 32.7% | + 3 p.p. |
29.1% | - 0 p.p. | 25.3% | + 3 p.p. |
34.9% | + 1 p.p. | 42.0% | - 6 p.p. |
9M23
35.3%
27.8%
36.9%
9M22 | ∆ |
35.5% | - 0 p.p. |
27.8% | - 0 p.p. |
36.6% | + 0 p.p. |
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Main export destinations were:
2Q23 | 3Q23 | |
Comments on the Results - Steel
In the 3Q23, Net Revenue from the Steel Unit was R$5.8 billion, 3.7% lower than that recorded in 2Q23 (R$6.0 billion), due to a decline in the net revenue/ton sold in the quarter, partially compensated by higher steel volume sold in the quarter. Net revenue/ton sold was R$5,635/t, 8.3% lower than the previous quarter (2Q23: R$6.147/t). In the period, there was a 6.9% decline in net revenue/ton sold in the Domestic Market, and a 23.6% decrease in net revenue/ton sold in the Export Market.
Cash cost per ton was R$4,846/t in 3Q23, 7.3% lower than in 2Q23 (R$5,231/t). The main variations were: lower cost of coal and coke, better efficiency of blast furnaces with lower fuel consumption and lower cost of slabs in the production mix.
Cost of Goods Sold per ton was R$5,719/ton in 3Q23. COGS/ton was 1.6% lower than the previous quarter (2Q23: R$5,813/t). This variation was a result of efficiency gains during the quarter and smaller adjustments to the market value of inventories, partially offset by the sale of products manufactured in the previous quarter at higher costs, as shown in the graph alongside. Thus, the Cost of Goods Sold in 3Q23 was R$5.8 billion, 3.3% higher than the COGS of the previous quarter (2Q23: R$5.7 billion).
Sales expenses totaled R$31 million in the 3Q23, 7.4% higher than the 2Q23 (R$29 million), mainly due to higher distribution and commissions expenses in the period.
General and Administrative Expenses totaled R$136 million in the 3Q23, 13.7% higher than in the 2Q23 (R$120 million), with higher personnel expenses and social charges.
Other operating income (expenses) were a negative R$183 million in the 3Q23, expenses 6.1% higher than in the 2Q23 (negative R$172 million), mainly with higher expenses with downtime equipment by R$46 million, partially offset by lower expenses with contingencies.
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Thus, the Adjusted EBITDA reached R$251 million in the 3Q23, R$434 million lower than that accounted in the 2Q23 (R$184 million). Adjusted EBITDA margin was -4.4% in the 3Q23, against 3.1% in the 2Q23.
Investments (CAPEX)
CAPEX in the 3Q23 totaled R$886 million, 0.8% higher than in 2Q23 (R$879 million). In the quarter, R$386 million were used to revamp Blast Furnace 3.
Business Unit - Steel Processing
Comments on the Results - Soluções Usiminas
Net Revenue in the 3Q23 totaled R$2.0 billion, 4.3% lower than in the 2Q23 (R$2.1 billion), due to lower prices practiced. Sales of the Distribution, Services/JIT and Tubes segments accounted for
26.3%, 69.2% and 4.5% of the volume sold in the 3Q23, respectively.
Cost of Goods Sold (COGS) was R$2.0 billion in the 3Q23, 5.5% lower than in the 2Q23 (R$2.1 billion). COGS/t was R$6,503/t in the 3Q23, a 4.5% decrease compared to the 2Q23 (R$6,812/t), with lower raw materials costs.
In the 3Q23, Operating income (expenses) were negative R$35 million, 8.2% lower compared to 2Q23 (negative R$38 million), mainly due to reversals of provisions for tax credits occurred in the previous quarter.
Adjusted EBITDA in the 3Q23 was R$28 million, 1,518% higher than in the previous quarter (2Q23: R$2
million). Adjusted EBITDA margin was 1.4% in the 3Q23 (2Q23: 0.1%).
ESG Agenda - Sustainability Themes
Material Theme | Goal | SDG | Comments | |
Objective of Zero Accidents, in compliance with the Strategic | The Safety index obtained a result above the established | |||
People management | 3 and 8 | reference. The Company is adopting several preventive | ||
Safety Plan, with focus on achieving a Safety Index of 1.0; | ||||
actions to revert this result; | ||||
Deviation generated by voluntary and involuntary | ||||
People management | Reach 18% of women in leadership positions by 2023; | 5 | dismissals of women in leadership. The company | |
intensified actions in order to reverse these results. | ||||
Climate changes | Conducting a GHG inventory at Soluções Usiminas by | 13 | . | Done. The inventory was completed on 06/30/2023. |
09/30/2023; | ||||
Climate changes | Adhesion of Mineração Usiminas to the Brazilian GHG Protocol | 13 | Done. The emissions inventory of Mineração Usiminas was | |
Program; | submitted to the Brazilian GHG Protocol Program on | |||
07/25/2023. | ||||
Relationship with | Improvement of the General Customer Satisfaction Index; | 12 | Evolution in line with plan | |
Stakeholders | ||||
Relationship with | Sustainability in the supply chain, strengthening relationships | 12 | Evolution in line with plan | |
Stakeholders | and reducing risks at 75% of strategic suppliers; | |||
Relationship with | Strengthening relationships with formal and community leaders | 17 | Evolution in line with plan | |
Stakeholders | in Vale do Aço and Baixada Santista | |||
Management of natural | Donation of 100% of the steel aggregate generated in 2023 to | |||
resources and environmental | 12 | Evolution in line with plan | ||
the Caminhos do Vale program | ||||
impacts | ||||
In line with planning | Late in relation to planning |
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USIMINAS - Usinas Siderúrgicas de Minas Gerais SA published this content on 27 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 October 2023 11:04:05 UTC.