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Gain on Usiminas holding lifts CSN's Q1 net profit over 1,100%

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Gain on Usiminas holding lifts CSN's Q1 net profit over 1,100%

Cia. Siderúrgica Nacional's net profit in the first quarter swelled over 1,100% year over year due to the gain accrued from the adjustment of the fair value of shares in Usinas Siderúrgicas de Minas Gerais SA.

The Brazilian steelmaker's net profit surged 1,159% year over year to 1.49 billion Brazilian reais in the quarter, compared to 117.6 million reais a year ago.

Net revenue in the three months increased 15% on a yearly basis to 5.07 billion reais on the back of higher steel and iron ore sales, according to the May 14 release.

Steel sales in the quarter increased 7% to 1.3 million tonnes, and iron ore sales grew 3% to 7.5 million tonnes, on a yearly basis. Gross profit also improved, up 5% year over year to 1.38 billion reais.

The quarter's results included other net income of 1.80 billion reais, mainly from the gain on the appreciation of Usiminas' shares, swinging from a year-ago loss of 99.2 million reais.

Operating income, meanwhile, climbed to 2.64 billion reais, compared to 751.8 million reais in the first quarter of 2017.

The same day, Steel Dynamics Inc. inked a definitive agreement to acquire CSN's Indiana-based unit for US$400 million.

CSN CEO Benjamin Steinbruch said late March that the company is looking to conclude asset sales of 2 billion reais to 3 billion reais, or between US$600 million and US$901 million, this year to slash its debt. Sources said that the company could sell its interest in Usiminas.

As of May 14, US$1 was equivalent to 3.62 Brazilian reais.