October 26, 2018 / 12:52 PM / 22 days ago

Brazilian steelmaker Usiminas beats profit estimates on higher steel prices

SAO PAULO, Oct 26 (Reuters) - Usinas Siderurgicas de Minas Gerais SA, one of Brazil’s largest steel producers, beat analysts’ third-quarter expectations due to higher steel prices internationally as well as a depreciating local currency, the company said in a securities filing on Friday.

Net income totaled 289 million reais, almost four times higher than in the same quarter in 2017 and beat the Refinitiv average estimate of 188 million reais.

Usiminas sold more than 85 percent of its steel in the local market. Overall production came in at 1.1 million tons of steel, a 9 percent increase from 2017, and higher steel prices boosted revenue by much more. Year-over-year revenue increased by 40 percent to 3.4 billion reais.

An explosion in a gasometer in Usiminas’ Ipatinga plant, which injured more than 30 people, did not affect production, the company said, but did drive up production costs up by some 47 million reais.

“The preliminary report of investigation concluded that the cause of the explosion was the undue entry of atmospheric air in the gasholder,” Usiminas said in the filing.

Since Usiminas is not a major exporter of steel to the United States it is not expected to be hurt by U.S. President Donald Trump’s new tariffs. Trump has already put in place tariffs against the import of Chinese steel, and capped the imports of Brazilian steel. (Reporting by Marcelo Rochabrun; Editing by Jeffrey Benkoe)

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