Batista’s MMX Drops on Wider-Than-Expected Loss: Rio Mover
MMX Mineracao & Metalicos SA (MMXM3), the iron-ore producer of Brazilian billionaire Eike Batista, had it biggest five-day decline since August after posting a quarterly loss that was seven times bigger than analysts’ expectations.
MMX, based in Rio de Janeiro, dropped 0.9 percent to 3.16 reais at the close in Sao Paulo, extending its five-day drop to 16 percent, the most since Aug. 15 on a closing basis. The stock traded at 1.3 times its three-month average volume.
MMX yesterday reported a fourth-quarter net loss of 348.7 million reais ($175.7 million), more than the 48.7 million reais adjusted net loss estimated by analysts in a Bloomberg survey, after writing down a canceled project in Chile.
The results are “negative” as they show a deterioration in the company’s operating figures in relation to the previous quarter, Banco Santander SA analysts Felipe Reis and Alex Sciacio said in a note to clients today.
“We have a negative read on MMX’s fourth-quarter results,” the Sao Paulo-based analysts wrote. “We remain on the sidelines with respect to the stock due to increased risk perception associated with project execution and funding.”
MMX, which aims to invest about 2 billion reais this year, expects to finish a review of its projects in 90 days, Chief Executive Officer Carlos Gonzalez said in a conference call with investors today, adding that 2013 will still be a “difficult” year for the company.
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