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

Executive summary

• Achieved the second highest crude steel production since 2015, with steel sales volume up 6% and domestic sales up 8% year-over-year.

• Adjusted consolidated EBITDA for 2024 reached R$1.6 billion, with steel unit EBITDA up 31% year-over-year; mining results were negatively impacted by lower iron ore prices and sales volume.

• Net profit for 2024 was R$3 million, a sharp drop from R$1.6 billion in 2023, mainly due to significant net exchange losses on dollar-denominated debt.

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

• Sustainability initiatives advanced, including a decarbonization program, ESG recognition, and Ecovadis Silver Seal.

Financial highlights

• Net revenue for 2024 was R$25.9 billion, down 6% year-over-year; Q4 consolidated net revenue dropped 5% sequentially to R$6.5 billion.

• Adjusted EBITDA for 2024 was R$1.6 billion, with Q4 adjusted EBITDA up 22% sequentially to R$518 million.

• Steel sales volume grew 6% to 4.3 million tons; mining sales volume fell 6% to 8.5 million tons.

• Net debt at year-end was R$937 million, with a leverage ratio of 0.58x; cash and cash equivalents at R$6.0 billion.

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

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.

• Cautious on macroeconomic environment due to expected interest rate hikes and international trade uncertainties.

• Mining sales expected to remain stable; improvement in consolidated results projected for Q3 2025.