Usinas Siderurgicas de Minas ((USNZY)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call of Usinas Siderurgicas de Minas presented a mixed sentiment, reflecting both achievements and challenges. While the company celebrated strong cash generation, cost reduction successes, and growth in the mining segment, it also acknowledged significant hurdles such as increased import pressures, impairment impacts on net income, and high costs in the mining sector. Despite these challenges, Usiminas remains committed to its strategic focus on long-term sustainability and competitiveness.
Strong Cash Generation
The company reported robust free cash generation of BRL 613 million, which contributed to a reduction in net debt and a lower leverage ratio. This financial strength is a testament to Usiminas’ effective cash management strategies.
Cost Reduction Achievements
Usiminas achieved a 3% reduction in the cost of goods sold (COGS) per ton in its steel business unit compared to the previous quarter. This was a result of the company’s dedicated expense and cost reduction plan, highlighting its operational efficiency.
Growth in Mining Segment
The mining segment showed impressive growth, with higher prices and volumes leading to a 27% increase in net revenue compared to the accumulated revenue of 2024. This growth underscores the segment’s vital role in the company’s overall performance.
Increased Steel Sales Volume
Despite external pressures, Usiminas reported a higher steel sales volume of 1.1 million tons, demonstrating resilience in demand and the company’s ability to navigate challenging market conditions.
Positive Operational Improvements
Operational improvements were evident as the company reported a 6% increase in consolidated EBITDA over the previous quarter. This indicates enhanced performance across key indicators.
Increased Imports Pressure
The domestic industry faced a 33% increase in imports during the first nine months of 2025, posing a significant challenge. The impact of subsidized imports remains a pressing issue for Usiminas.
Net Income Impacted by Impairment
Despite operational improvements, net income was adversely affected by a BRL 3.6 billion accounting effect related to asset impairment and deferred taxes, overshadowing the company’s positive operational strides.
Challenging Market Environment
Usiminas continues to navigate a complex market environment both in Brazil and internationally. The steel segment experienced reduced net revenue due to lower prices, reflecting the broader market challenges.
High Mining Costs
The mining segment faced increased costs, particularly due to higher freight tariffs, which impacted overall cost efficiency. This remains a critical area for the company to address.
Forward-Looking Guidance
Looking ahead, Usiminas reported an adjusted EBITDA of BRL 434 million with a 7% margin in the third quarter of 2025, marking an improvement despite market challenges. The company anticipates continued cost reductions and stable net revenues per ton in the fourth quarter, although typical year-end seasonality may lead to volume declines. Usiminas remains optimistic about overcoming market challenges through strategic focus and disciplined execution.
In conclusion, the earnings call of Usinas Siderurgicas de Minas highlighted a balanced view of achievements and challenges. The company demonstrated strong cash generation and operational improvements, while also facing significant hurdles such as increased import pressures and high mining costs. Usiminas remains committed to its strategic goals, focusing on sustainability and competitiveness in a challenging market landscape.