CSN MAINTAINS EBITDA MARGIN OVER 46% IN 3Q10 - From their release
CSN MAINTAINS EBITDA MARGIN OVER 46% IN 3Q10 São Paulo, Brazil, October 28, 2010 Companhia Siderúrgica Nacional (CSN) (BM&FBOVESPA: CSNA3) (NYSE: SID) announces today its results for the third quarter of 2010 (3Q10), in accordance with Brazilian accounting principles, and denominated in Brazilian Reais (R$). All comments presented herein refer to the Company’s consolidated results and comparisons refer to the second quarter of 2010 (2Q10), unless otherwise stated. The Real/US Dollar exchange rate on September 30, 2010 was R$1.694. Executive Summary The EBITDA margin reached 46.4% in 3Q10; Year-to-date EBITDA totaled R$4.9 billion, a 105% improvement over 9M09. In 3Q10, EBITDA reached R$1.8 billion; Gross profit in 9M10 amounted to R$5.2 billion, 98% up year-on-year and a new Company record. In 3Q10, gross profit reached R$1.9 billion; The 3Q10 gross margin reached 48.7%; Net income in the first nine months of 2010 was R$2.1 billion, 13% higher than the same period in 2009. In 3Q10, net income reached R$720 million; Year-to-date net revenue of R$11.0 billion was also a new Company record. In 3Q10, net revenue totaled R$3.9 billion; Mining revenue reached a record of R$1.2 billion, 42% up on 2Q10; Iron ore sales totaled 7.0 million tonnes in 3Q10, the Company’s highest-ever figure; Consolidated steel product sales volume in the domestic market, where margins are historically higher, accounted for 87% of total sales volume in 3Q10; The net debt/EBITDA ratio closed the third quarter at 1.54x, based on EBITDA of R$6.1 billion in the last 12 months, virtually stable when compared to the 1.56x recorded at the end of 2Q10; In July 2010, CSN, through its wholly-owned subsidiary CSN Resources S.A., issued bonds worth US$1 billion at 6.5% p.a. and maturing in July 2020; In September 2010, CSN, through its wholly-owned subsidiary CSN Islands XII Corp., issued perpetual bonds worth US$1 billion at 7.0% p.a.; the proceeds were used mainly to settle the US$750 million perpetual bonds issued by CSN Islands X Corp, with return of 9.5% p.a.; CSN is a highly liquid company, with a cash position of R$ 11.5 billion.
I am no expert on the steel industry but think the results are outstanding by any measure.
That said, I sold my small position earlier this week and do not expect to re-up until sentiment reverses in general, and for Brazil, in particular. VALE posted record earnings and was very weak yesterday. The market is going through a phase of sell the good news and severely punish bad news... hard for a long to win.
So, I think SID is a great investment on a fundamental basis, really, really sound... just hope the market improves technically....
(I have a core portfolio of income-generating stocks and energy MLPs, and swing trade with another part of the portfolio. I take starter positions in stocks I like, add if the going is good, but sell if things are not moving as hoped/planned. I ride the winners, never long enough, and dump the losers, never soon enough. After a decent Sept/Aug, I have been reducing exposure in my trading portfolio.)