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Impairments, nickel suspension drag Votorantim to FY'16 loss


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Impairments, nickel suspension drag Votorantim to FY'16 loss

Votorantim SA sunk back in the red after posting a full-year 2016 net loss of 1.25 billion Brazilian reais, compared to the preceding year's net profit of 382 million reais.

In an April 6 statement, the company attributed the loss to the temporary suspension of its nickel operations and the 1.8 billion reais impairment charge from the reclassification of its Brazilian long steel assets as available for sale, which pushed total impairments for 2016 to 2.16 billion reais.

The Brazilian firm also booked a 9% drop in net revenue to 26.74 billion reais, mainly due to Brazil's economic recession in 2016. Adjusted EBITDA, meanwhile, dropped 38% to 4.29 billion reais.

Votorantim's zinc and byproducts business posted a 3% increase in net revenues to 1.84 billion reais on the back of higher sales volumes and improved prices, though production was 2% lower year over year at 519,000 tonnes.

Net revenue from the group's aluminum business fell 9% to 4.16 billion reais, negatively impacted by the reduction in energy sales volume and lower demand for downstream products and despite a 5% growth in aluminum sales volumes to 331,000 tonnes.

Votorantim's CapEx for the year totaled 3.03 billion reais, down 6% from 2015.

In February, the company struck a deal to merge its Brazilian long steel operations with ArcelorMittal's, making Votorantim Siderurgia a subsidiary of ArcelorMittal Brasil SA.

As of April 5, US$1 was equivalent to 3.09 Brazilian reais.