OREANDA-NEWS. May 3, 2012. Usiminas’ steel shipments grew 13% in 1Q12 compared to 4Q11. As a result, the overall net revenue from sales amounted to BRL  2.9 billion, up 2.5% from 4Q11.

Out of the total 1.5 million tonnes sold in the period, 1.2 million tonnes were shipped to domestic customers, up 10% from the previous quarter. Exports increased 31% to 300,000 tonnes due mainly to additional sales (including inventory slabs) to markets where the shareholder Ternium already has an industrial and commercial presence.

The crude steel output in Ipatinga and Cubatao mills totaled 1.7 million tonnes in the first quarter this year, an 11% increase when compared to the previous quarter. The rolled steel production reached 1.6 million tonnes, a 25% jump from the level seen in 4Q11. Iron ore production, for its turn, grew 11% from last year’s 4th quarter to 1.9 million tonnes.

Notwithstanding the good production and commercial results in the first quarter this year, Usiminas’ financial results were adversely impacted by foreign exchange losses and provisions for contingencies and inventory losses. The Company posted a net loss of BRL  37 million and an EBITDA of BRL  190 million, down 13% from 4Q11 figures. The EBITDA margin ended the period at 6.6%, i.e. 1.1 percentage point lower than that of the previous quarter.

According to Usiminas vice president for Finance and Investor Relations Ronald Seckelmann, the first quarter results are seasonally the weakest in the year. “When compared to 4Q11, the Company showed some evolution, with higher net revenue and sales volume. Such results allow us to work at a higher production level under more stable operating conditions. Based on such assumptions, we are endeavoring to recover Usiminas competitiveness through an industrial plan with a focus on efficiency improvement and operational cost reduction, not to mention the improved customer service with an aim to take the place of imported steel in the domestic market. Moreover, the investments under way will enable Usiminas to further upgrade its product portfolio,” Seckelmann says.

Usiminas’ consolidated investments amounted to BRL  561 million in first quarter 2012.

The start-up of a new project

Usiminas is about to complete the Investment Cycle started in 2008, which aimed at increasing the technology content of its products. Such investment projects will allow Usiminas to gradually increase its share of the upgraded product market.

In this context, the Company has just started up a new Vacuum Degassing plant at Ipatinga mill. The investment in the new equipment amounted to approximately BRL  170 million. The outcome will be improved steel cleanliness and better stampability properties, which adds value to the steel intended for market segments like civil construction, oil & gas, automotive, home appliances and shipbuilding.

Other investments have already come on stream, like the new Galvanizing Line, the CLC technology and Coke Plant no. 3, among others. The new Hot Strip Mill is currently in the test stage.