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Brazilian metals and cement group Votorantim, formerly known as Votorantim Industrial, posted net income of 519mn reais (US$158mn) in 3Q17, over three times the 149mn-real profit reported for the same quarter of last year.
Net income was booted by positive results from equity investments and that was due to the results of investee companies, particularly Fibria, Citrosuco and Banco Votorantim, the company said in an earnings release.
Net revenue was up to 7.51bn reais compared to 6.68bn reais in 3Q16, mainly due to higher average metals prices in 3Q17. Adjusted Ebitda rose to 1.31bn reais from 1.29bn reais, but the Ebitda margin slipped to 17% from 19%.
The cost of goods sold was up 10% year-on-year to 5.54bn reais, as a result of higher LME metals prices, higher purchase prices and sales volume of energy and higher sales volume of primary aluminum in the quarter, partially offset by lower sales volume in the Brazilian cement operations, the company said.
In Votorantim's metals division, aluminum sales revenue increased 18% to 1.25bn reais in the quarter.
Long steel sales were not included in the company's financial statements since these assets were classified as available for sale.
Recently, the company's large-scale integrated zinc producer Nexa Resources (Nexa), formerly known as Votorantim Metais, announced the launch of its initial public offering (IPO). The common shares started trading on the New York Stock Exchange and the Toronto Stock Exchange on October 27.
After the IPO, Votorantim continues to consolidate its results as the controlling shareholder, with 64% of its shares, the release said.
Capex last quarter decreased 5% to 674mn reais, with 62% corresponding to expansion projects and 38% to the areas of maintenance, modernization, safety, health and the environment.
Votorantim will hold an undisclosed minority stake in ArcelorMittal Brasil.
The move will result in combined crude and rolled steel capacities of 5.6Mt/y and 5.4Mt/y, respectively.