Brazilian steelmaker Usiminas BMFBOVESPA:USIM3 more than doubled its net profit in the first quarter from a year earlier, it said on Friday, driving its shares higher as better steel prices and foreign exchange gains helped it beat market forecasts.
Usiminas posted first-quarter net profit of 896 million reais ($178.32 million), up 166% year-on-year. Analysts polled by LSEG expected profit of 190.9 million reais.
Usiminas pointed to improved pricing at its steelmaking unit as well as foreign exchange gains from the appreciation of the Brazilian real.
Net revenue fell 14% to 5.87 billion reais, as steel sales volumes dropped 8% to 1 million metric tons.
Iron ore sales declined 12% to 1.95 million tons.
Usiminas expects stable steel sales volumes in the second quarter but foresees higher cost of sales due to pressure from raw material, energy and freight prices.
In its mining unit, Usiminas expects higher Q2 volumes alongside increased costs related to maritime freight.
Shares in Usiminas were up 9% in early Sao Paulo trading, making it the biggest gainer on benchmark stock index Bovespa BMFBOVESPA:IBOV, which fell 0.3%.
"Solid beat driven by improvements in the steel unit. We expect an upward revision in consensus estimates," JPMorgan analysts said.
Usiminas is controlled by Ternium NYSE:TX.
($1 = 5.0248 reais)