Companhia Siderurgica Nacional (SID): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

Summary:
CSN reported loss per American Depositary Receipt (ADR) of $0.15 in fourth quarter 2013 despite top-line improvement of 11%. Steel sales volume declined 5% sequentially, while iron ore sales volume was up 2%. Net financial result was an expense of R$929 million. Fourth-quarter results as well as near-term risks, including rising cost of sales, growing competition and exchange rate fluctuations, forced us to maintain our Neutral recommendation. Over the long term, we believe CSN is well positioned to reap benefits from the rising infrastructural demand worldwide. The World Steel Association predicts global steel consumption to grow 3.3% in 2014. Apart from steel, CSN's exposure to iron ore mining, cement and infrastructure projects will work in its favor.

Overview:

Companhia Siderurgica Nacional SID or CSN was a state-owned steel producer until 1993, when it was privatized and acquired by a Brazilian group headed by the Steinbruch family. The company produces hot and cold-rolled flat steel, galvanized sheets and tin plates for the packaging, automotive, and construction industries.

Companhia Siderurgica Nacional's integrated steel-making complex in Latin America consists of mines, steel mills, railroads, ports, services and distribution centers with the capacity to produce over five million tons of crude steel per year. The company is engaged in the mining of iron ore, limestone and dolomite in the State of Minas Gerais. CSN makes strategic investments in railroads, electricity and ports to cater to the needs of the Presidente Vargas mill and also to facilitate the company's other activities.

The company operates in five business segments namely, Steel, Mining, Logistics, Cement and Energy, which accounted for 63%, 27%, 7%, 2% and 1%, respectively, of total revenue in 2013.

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