Usiminas Falls Most on Ibovespa as Debt Costs Surge: Rio Mover

Usinas Siderurgicas de Minas Gerais SA, Brazil’s second-largest steelmaker by output, led losses on the Ibovespa after its quarterly earnings report showed sales missed estimates and debt costs surged as the real weakened.

Shares of Usiminas, as the company is known, dropped 4.1 percent to 11.54 reais at the close of trading in Sao Paulo, the lowest since Oct. 29. The Ibovespa rose 0.8 percent.

Net financial expenses totaled 265.2 million reais ($111.2 million) in the fourth quarter, compared with 117.6 million in the prior three months, as the currency tumbled 6.1 percent, according to a regulatory filing today. Sales were 3.19 billion reais, trailing the average estimate of 3.27 billion reais from eight analysts surveyed by Bloomberg.

Investors are concerned “given expectations of further currency depreciation,” Andreas Bokkenheuser, an equity analyst at UBS AG with a sell recommendation on the stock, said today in an e-mail message. Thirty-four percent of Usiminas’s 6.9 billion reais of gross debt as of Dec. 31 was denominated in foreign currencies, according to today’s filing.

The real has lost 18 percent in the past year, the most after the South African rand among major currencies. Usiminas got 94 percent of its revenue from Brazil in the third quarter, data compiled by Bloomberg show.

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