According to Bloomberg, Brazil’s second-biggest steelmaker Usiminas “is an investment that keeps on losing for Italy’s billionaire Rocca family.”
Apparently, the Rocca’s have lost 76% on its R$5 billion (US$2.5 billion) purchase since November, when it agreed to pay R$36 for a 27.7% stake in Usiminas. The stock slumped to R$8.70 reais on June 8 in Sao Paulo as investors anticipate Brazil’s No. 2 steelmaker by output will struggle to increase profits.
The stock has dropped on fading prospects of other companies seeking to enter the control group, according to Barclays Plc., while a global steel glut and lower demand has curbed profitability.
First quarter Loss…
Usiminas posted a first-quarter net loss of R$70.8 million on April 23, its worst in three years and its second loss in five quarters as sales fell and a weaker real boosted the company’s financial expenses. Crude-steel output declined for a sixth consecutive quarter, to 1.67 million metric tons, as the Brazilian government’s efforts to spur economic growth failed to stem a plunge in car sales.