(Updates with crude steel output in third paragraph.)
Nov. 8 (Bloomberg) -- Usinas Siderurgicas de Minas Gerais SA, the second-largest Brazilian steelmaker by output, said third-quarter profit plunged 80 percent as production declined.
Net income dropped to 103 million reais ($58.9 million) from 514 million reais a year ago, Usiminas, as the Belo Horizonte, Brazil-based company is known, said today in a regulatory filing. The company was expected to post profit excluding some items of 93.3 million reais, according to the average of six analysts in a Bloomberg survey.
Crude steel output declined 21 percent to 1.55 million metric tons from last year, a fourth straight quarterly drop. Net sales fell 7.4 percent to 3 billion reais, while the cost of goods sold rose 8.7 percent, the company said.
“In line with the slowdown in the economic activity, flat steel consumption in the third quarter remained negatively affected by efforts to reduce inventories in the entire production chain and the continuing increase of indirect imports,” Usiminas said.
The company’s preferred shares dropped 38 percent this year, more than double the 15 percent decline in Brazil’s benchmark Bovespa index, as higher raw-material costs and lower demand harmed steelmakers’ profit margins. Industrial production in Latin America’s biggest economy sank 2 percent in September, the biggest decline since April, and vehicle output fell 9.5 percent in October.
Usiminas declined 0.2 percent to 11.85 reais in Sao Paulo yesterday.
(Usiminas will host a conference call with investors today at 8:30 a.m. New York time.)
--Editors: Dale Crofts, Karen Eeuwens
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