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Companhia Siderurgica Nacional (SID - Analyst Report), or CSN reported its financial results for the fourth quarter and fiscal year 2011 onMarch 26, 2012. Net income jumped 81% year over year to R$817.0 million (US$453.9 million), or R$0.56 per share (31 cents per ADR). The reported results were above the Zacks Consensus Estimate of 20 cents per ADR.

In fiscal year 2011, net income of R$3,667.0 million (US$2,195.8 million) increased 46% year over year leading to earnings per share of R$2.52 per share (US$1.51 per ADR). Earnings were above the Zacks Consensus Estimate of US$1.24 per ADR.


The company generated net revenues of R$4,166.7 million (US$2,314.8 million) in the fourth quarter, registering a growth of 21% year over year. 

Crude steel production in the quarter was 1.24 million tons and rolled steel was 1.23 million tons, roughly flat sequentially. Steel sales volume inched up 1% sequentially to 1.2 million tons, of which domestic sales accounted for 88.0%, overseas subsidiaries 9% and direct exports around 3%.

Iron ore sales improved 1% sequentially to 8.0 million tons. Of total sales, domestic market accounted for 2.5% and exports about 97.5%.

In fiscal year 2011, net revenues jumped 14% to R$16.5 billion (US$9.9 billion) attributable to higher iron ore prices and sales volume.


During the fourth quarter, cost of goods sold went up 31.6% year over year to R$2,558.4 million (US$1,421.3 million), leading to a fall in gross margin to 39% from 43% in the year-ago quarter.

As a percentage of net revenue, selling expenses increased by roughly 270 basis points (bps) year over year, while general and administrative expenses declined by 24 bps year over year.

In the reported quarter, adjusted EBITDA totaled R$1,462.8 million (US$812.7 million) with a margin of 35% compared with 42% in the year-ago quarter. Net financial results decreased 7.5% year over year to an expense of R$497.2 million (US$276.2 million).

Balance Sheet

Exiting the fourth quarter, Companhia Siderurgica had cash and cash equivalents of roughly R$15,417.4 million (US$8,288.9 million) compared with R$15,635.2 million (US$8,543.8 million) in the previous quarter. Loans, financing and debentures, net of current portion increased to R$25,186.5 million (US$13,541.1 million) compared with R$25,355.0 million (US$13,855.2 million) in the previous quarter.

Cash Flow

Net cash flow from operating activities in fiscal year 2011 was R$4,201.8 million (US$2,516.0 million), reflecting an increase of 66.9% year over year. Capital spending totaled R$4,401.5 million (US$2,635.6 million), up 20.2% year over year.

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