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Magnesita disappoints market by reporting US$40mn loss

Bnamericas Published: Tuesday, March 31, 2009
Brazilian refractory brick producer Magnesita (Bovespa: MAGG3) disappointed market analysts Tuesday as the company posted losses of 93mn reais (US$40.3mn) for the last quarter of 2008, versus a net profit of 59mn reais in Q3. In 4Q07, Magnesita made a profit of 19mn reais. Ebitda fell to 21mn reais in 4Q08 from 148mn reais in Q3, down 81%. "Results came in significantly below our expectations," said Luciana Leocadio, an analyst at Ativa brokerage. "Operational results were depressed." The company blamed weak demand caused by the global economic crisis. Magnesita's most recent acquisition, Germany's LWB, also did not fare well in Q4 and posted negative Ebitda of 10mn reais. Ativa said that LWB's operations were running at a loss in the last two months of 2008 and will see a slow recovery in 2009. Almost 80% of LWB's revenues come from Europe and the US.

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