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CSN Post Record Steel And Mining Revenue In 3Q13

|About: Companhia Siderurgica Nacional (SID)

Companhia Siderurgica Nacional S.A (CSN) (NYSE: SID) was incorporated for the manufacturing of iron and steel in Brazil. The company specializes in the manufacture and distribution of galvanized steel, hot-rolled and cold-rolled products. Its major consumers are those in the auto parts, automobile, electrical equipment, civil construction, and packaging industries. The company also operates railroads, mines, integrated steel mills, and service centers.

On November 14, 2013, CSN announced its financial results for its third quarter. The company made a record $4.7 billion in net revenue, which represented a 15% increase from the same quarter of last year. The company also went further to create another record in its year-to-date net revenue after it made net revenue of $12.4 billion.

With a 51% increase in its adjusted EBITDA from its 2Q13 value of $1.1 billion, the company made $1.7 million in its Q3 2013. This increase was mainly engineered from its mining and steel segments. The company made another record this third quarter in its consolidated EBITDA margin by having its highest quarterly figure of 31% since its trading in Q4 of 2011.

In the company's 9M13, it recorded steel revenue of $9.3 billion, which represented a 17% increase from the same period under review in 2012. In Q3 2013, it had a 2% increase from its second quarter net revenue, realized from its steel operations at a value of $3.2 million. New records were also reported in the company's total steel sales in 9M13 as it sold 4.7 million tons. Domestic steel sales made a totaled sale of $3.6 million and an 8% increase in its year-on-year records.

The company recorded a 67% increase from its second quarter with a net revenue of $1.6 million in its third quarter from its mining operations. The third quarter recorded the highest volume sale of Iron ore shipped through Tecar in the Port of Itaguai at 8.3 million tons. Also in the records for this third quarter was the company's net revenue from port logistics (Tecon) with a total value of $133 million in 9M13. The company was able to handle 194,000 containers in the aforementioned period and a 22% increase year-on-year.

The company's cement sales in the first nine months made a record sales volume of 1.5 million tons and generated a net revenue of $308 million. At the end of the third quarter, the company made a close with an impressive cash and cash equivalent of $14.4 billion.

My Recommendation

CSN was all about creating records in its third quarter. The company has been able to solidify its investment and revenue inflow. With its financial strength, it is impossible for the company to go down anytime soon. With its formidable portfolio, I strongly recommend the company to anyone with intention of investing in the basic materials industry.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.