By Brazil Stock Guide – Usiminas (USIM5) reported net income of R$896 million in the first quarter of 2026, a 596% jump from the previous quarter and up 166% year-on-year, as Brazil’s newly imposed anti-dumping tariffs began to reshape domestic steel pricing and improve profitability.
Adjusted EBITDA reached R$653 million, up 56% quarter-on-quarter, with margins expanding to 11.1% from 6.8% in the fourth quarter. The recovery was concentrated in the steel division, where EBITDA rose 140% sequentially to R$544 million, driven by a 4.9% increase in net revenue per ton and a 1.8% decline in cost per ton.
Despite the margin expansion, top-line performance remained under pressure. Net revenue declined 5% quarter-on-quarter to R$5.87 billion and 14% year-on-year, reflecting lower volumes across both divisions. Steel sales totaled 1.0 million tons, down 7% sequentially, while iron ore sales fell 21% to 1.9 million tons, impacted by heavy rainfall and operational adjustments in mining.
The domestic market showed relative resilience, with internal sales rising 2% sequentially, partially offsetting a sharp 29% drop in exports. Within steel, the automotive segment increased its share to 33% of domestic volumes, highlighting a more favorable mix and stronger demand from higher-value segments.
Management pointed to a structural shift in the competitive environment following Brazil’s decision in February to impose anti-dumping duties on cold-rolled and coated steel imports. The move triggered a temporary surge in imports ahead of implementation, inflating inventories in the short term. As these inventories normalize, the company expects improved pricing discipline and a gradual recovery in domestic margins.
Financial results were further supported by currency effects. The company posted a positive financial result of R$110 million, reversing a loss in the previous quarter, as foreign exchange gains — particularly from the appreciation of the Brazilian real — more than offset financial expenses.
Usiminas ended the quarter with a net cash position of R$391 million and negative leverage of -0.20x net debt-to-EBITDA, reflecting a conservative capital structure. Free cash flow was positive at R$84 million, although significantly lower than the previous quarter due to working capital changes and continued capital expenditures of R$285 million.
Looking ahead, the company expects stable steel volumes in the next quarter but anticipates higher costs driven by raw materials, energy and freight. In mining, volumes are expected to increase, though accompanied by higher logistics costs. On a consolidated basis, management guides for broadly stable adjusted EBITDA in the near term.
The broader macro backdrop remains uncertain, with the company highlighting global risks tied to geopolitical tensions, higher energy prices and persistent inflation, all of which could weigh on demand and cost structures in the coming quarters.
Leave a Reply