Usinas Siderúrgicas de Minas Gerais (USIM5) Q4 2024 earnings summary

Executive summary

• Consolidated net revenue for 2024 was R$25.87 billion, down 6.4% year-over-year, with net profit dropping sharply to R$3.4 million from R$1.64 billion in 2023, mainly due to significant net exchange losses.

• Steel sales volume grew 6% year-over-year to 4.3 million tons, with domestic sales up 8%, while mining sales volume fell 6% to 8.5 million tons.

• Adjusted consolidated EBITDA for 2024 was R$1.6 billion, 8% lower than 2023, with margin stable at 6.2%.

• Major investments focused on steel and mining units, including blast furnace refurbishment, coking plant, PCI plant, and dam decharacterization.

• No dividends or interest on capital were paid in 2024 due to the net loss.

Financial highlights

• Net debt at year-end was R$937 million, versus net cash of R$89 million in 2023, with a leverage ratio of 0.58x.

• Cash and cash equivalents at year-end were R$6.0 billion, stable year-over-year.

• Adjusted mining EBITDA dropped 49% year-over-year to R$437 million; steel adjusted EBITDA rose 31% to R$1.1 billion.

• Free cash flow for 2024 was negative R$89 million, with CAPEX at R$1.1 billion.

• 4Q24 adjusted EBITDA rose 22% sequentially to R$518 million, with margin improving to 8%.

Outlook and guidance

• Management expects improved consolidated results in 1Q25, with higher domestic steel sales and stable mining volumes.

• Net revenue per ton anticipated to be slightly above last quarter due to better mix and price transfer.

• CapEx guidance for 2025 set between R$1.4 billion and R$1.6 billion, with focus on PCI and coke plant projects.

• Continued volatility in commodity prices and foreign exchange rates expected, with ongoing cost control and efficiency initiatives.

• The company is monitoring impairment indicators and expects to maintain a conservative capital structure.