Companhia Siderurgica Nacional's CEO Discusses Q2 2012 Results - Earnings Call Transcript

Now, I turn the conference over to Mr. David Salama, CSN’s Executive Investor Relations Officer, who will present the Company’s operating and financial highlights for the period. You may begin the conference sir.

David Moise Salama



Good morning, everyone, and thank you for joining CSN’s second quarter results conference. Here, we are today at the CSN’s office, so let’s begin with Slide 3 where we can see the consolidated results for the second quarter of 2012. Net revenue totaled R$4.1 billion in the second quarter, 6% up in the first quarter is due to higher sales abroad. In the first, Nacional net revenue reached R$8 billion. Gross profit reached R$1.2 billion in line with the first quarter of this year. EBITDA reached R$1.1 billion in line with the first quarter 2012, totaling R$2.2 billion in the first half. EBITDA margin was 27%.

The second quarter CapEx reached approximately R$800 million, first half investments totaled R$1.7 billion. CSN posted second quarter net loss of R$1 billion, basically due to an accounting reclassification with no cash effect, low adjustment investment is not recurred. That is on the accounting rules as well on the Company's investment policy, management proceeds evidence of significant reduction in the Company’s investment in net sales by the end of June of 2012, and despite on the reclassification of accrued losses recorded under shareholders’ equity to the income statement.

It's worth mentioning that this reclassification has no cash impact, and that will affect the dividend payment due to existing profit results. Explaining the effect of these reclassification, net income would have totaled R$550 million in the second quarter and R$640 million in the first half of this year.

Now, let's move to the Slide 4 where represent EBITDA evolution. The EBITDA total R$1.1 billion in the second quarter in line with the first quarter of 2012. It’s worth mentioning certain sectors that partially offset one and another.

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