SÃO PAULO Brazilian ferroalloys producer Cia. de Ferro Ligas da Bahia (Ferbasa) saw first-quarter earnings fall year on year on reduced exports and increased costs.
Net income in the three months ended March 31 totaled 8.6 million reais ($4.2 million) compared with 20.4 million reais in the first quarter of 2012. Total revenue amounted to 185.7 million reais ($91.2 million) in the quarter, up 1.8 percent from last year.
Sold volumes stood at 63,925 tonnes, down 2 percent year on year. Domestic sales totaled 144.4 million reais ($70.9 million), up 3.6 percent year on year, while import revenue stood at 41.3 million reais ($20.3 million), down 19 percent in the same comparison.
Ferrosilicon exports fell 19.2 percent year over year to 11,108 tonnes from 13,751 tonnes in the first quarter of 2012, while low-carbon ferrochrome shipments fell 53.5 percent to 838 tonnes in the same comparison.
Meanwhile, high-carbon ferrochrome shipments rose 69.2 percent to 1,166 tonnes.
"The results were negatively affected by the payment of additional energy fees (due to the use of thermoelectric power plants), which amounted to 7.1 million reais ($3.5 million)," the Bahia-based company said. "We also considered the payment of 7.3 million reais ($3.6 million) as a result of a collective agreement with (local) unions."
The company also faced extra costs due to an operational problem with its ferrosilicon furnace, caused by changes in technical specifications imposed by the supplier, Ferbasa said. Losses are still being calculated and will be negotiated with the furnace supplier.
Total first-quarter ferroalloy production in 2013 was 66,038 tonnes, up 11 percent year on year from 59,497 tonnes. High-carbon ferrochrome accounted for most of Ferbasas production, at 36,069 tonnes. This represented a 29.4-percent year-over-year increase.
Meanwhile, ferrosilicon production amounted to 19,883 tonnes in the period, down 8.8 percent year over year, as low-carbon ferrochrome output fell 3.9 percent to 4,918 tonnes.
The high-carbon ferrochrome price in the period was negotiated at $1.12 per pound. For the second quarter of 2013, the company announced an increase to $1.27 per pound.
A version of this article was first published by AMM sister publication Metal Bulletin.