Usinas Siderurgicas de Minas Gerais S.A. - USIMINAS

Usiminas reported consolidated EBITDA of BRL 653 million in 1Q26, up 56% versus the previous quarter. Steel sales were down 7.0% q/q, while mining sales volume fell 21% q/q because of seasonal rain and logistics issues; mining net revenue per ton was stable at $87. The company said the steel unit saw nearly a 5% improvement in revenue per ton, and adjusted EBITDA was “very much in line” with 1Q25. Operating cash flow was BRL 370 million, working capital increased by BRL 120 million, CapEx was BRL 285 million, and free cash flow was BRL 84 million. Guidance-wise, management said it expects consolidated EBITDA to remain relatively stable in the next quarter, with steel helping offset mining; it also said steel volumes should stay around current levels, while costs are expected to rise from slabs, coke, coal, energy and freight, partly offset by price increases already implemented in April.

Marcelo Chara framed the quarter as a clear improvement, pointing to higher EBITDA, better steel pricing/mix and lower COGS from a stronger real and efficiency gains. He also sounded cautious on the macro backdrop, citing the Iran war’s impact on energy, freight and inflation, and said the company is preparing for a challenging next few quarters. Strategically, he emphasized financial discipline, safety, environmental performance, cost reduction and ongoing investment in priority projects such as PCI and coke-oven retrofitting.

Diego Garcia highlighted that this was the first quarter converted from dollars into reais, which affected reported comparisons. He said the steel segment’s better mix and profitability offset lower volumes, while COGS benefited from reduced maintenance and retrofitting costs; later in Q&A, management quantified the savings at about $15 per ton and said they expect that benefit to be permanent unless something unexpected occurs. On cash flow, he cited BRL 370 million of operating cash flow, BRL 120 million of working-capital use, BRL 285 million of CapEx, BRL 84 million of free cash flow, and a net cash position broadly similar to the prior quarter, with debt maturity described as comfortable.

Most of the Q&A focused on costs, FX and pricing. Management said raw materials, slabs, coke, coal, energy and freight should all pressure 2Q costs, while April pricing actions included a 5% increase in spot/distribution and similar increases in some industrial agreements; they did not give exact magnitude for further increases. On FX, they said the stronger reported income came from a BRL 110 million FX gain and a BRL 450 million deferred-tax benefit tied to the real’s appreciation, but warned these benefits depend on future exchange-rate moves. On demand and imports, they said domestic apparent consumption is being held back by elevated inventories and imports, which were said to be up 30% sequentially, with normalization expected only in the second half of the year.