NOTE 26 — SEGMENT REPORTING
|
|
|
Business Segments |
|
||||||||||
|
|
|
2017 |
|
||||||||||
|
|
|
Brazil Operation |
|
North America |
|
South America |
|
Special Steels |
|
Eliminations and |
|
Consolidated |
|
|
Net sales |
|
12,562,727 |
|
15,433,380 |
|
4,025,736 |
|
6,228,543 |
|
(1,332,767 |
) |
36,917,619 |
|
|
Cost of sales |
|
(10,996,383 |
) |
(14,823,590 |
) |
(3,523,394 |
) |
(5,301,172 |
) |
1,331,544 |
|
(33,312,995 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
1,566,344 |
|
609,790 |
|
502,342 |
|
927,371 |
|
(1,223 |
) |
3,604,624 |
|
|
Selling, general and administrative expenses |
|
(539,613 |
) |
(569,696 |
) |
(202,862 |
) |
(166,656 |
) |
(176,081 |
) |
(1,654,908 |
) |
|
Other operating income (expenses) |
|
(11,513 |
) |
29,113 |
|
11,260 |
|
14,989 |
|
47,882 |
|
91,731 |
|
|
Impairment of assets |
|
(45,279 |
) |
(1,069,528 |
) |
— |
|
— |
|
— |
|
(1,114,807 |
) |
|
Gains and losses on assets held for sale and sales of interest in subsidiaries and associate company |
|
— |
|
— |
|
— |
|
— |
|
(721,682 |
) |
(721,682 |
) |
|
Reversal of contingent liabilities, net |
|
— |
|
— |
|
— |
|
— |
|
929,711 |
|
929,711 |
|
|
Equity in earnings of unconsolidated companies |
|
— |
|
(111,581 |
) |
41,554 |
|
15,460 |
|
19,970 |
|
(34,597 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operational (Loss) income before financial income (expenses) and taxes |
|
969,939 |
|
(1,111,902 |
) |
352,294 |
|
791,164 |
|
98,577 |
|
1,100,072 |
|
|
Financial result, net |
|
(564,397 |
) |
(46,184 |
) |
(74,301 |
) |
(122,837 |
) |
(335,629 |
) |
(1,143,348 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) before taxes |
|
405,542 |
|
(1,158,086 |
) |
277,993 |
|
668,327 |
|
(237,052 |
) |
(43,276 |
) |
|
Income and social contribution taxes |
|
(103,263 |
) |
201,807 |
|
(123,552 |
) |
(192,902 |
) |
(77,481 |
) |
(295,391 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (Loss) |
|
302,279 |
|
(956,279 |
) |
154,441 |
|
475,425 |
|
(314,533 |
) |
(338,667 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales between segments |
|
1,216,526 |
|
59,478 |
|
6,490 |
|
50,273 |
|
— |
|
1,332,767 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation/amortization |
|
909,333 |
|
684,121 |
|
155,038 |
|
344,059 |
|
— |
|
2,092,551 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in associates and jointly-controlled entities |
|
— |
|
346,080 |
|
584,898 |
|
199,647 |
|
149,674 |
|
1,280,299 |
|
|
Total assets |
|
17,051,262 |
|
14,872,755 |
|
5,208,265 |
|
8,834,041 |
|
4,335,438 |
|
50,301,761 |
|
|
Total liabilities |
|
9,592,948 |
|
3,315,546 |
|
1,711,963 |
|
2,753,091 |
|
9,034,272 |
|
26,407,820 |
|
|
|
|
Business Segments |
|
||||||||||
|
|
|
2016 |
|
||||||||||
|
|
|
Brazil Operation |
|
North America |
|
South America |
|
Special Steels |
|
Eliminations and |
|
Consolidated |
|
|
Net sales |
|
11,634,862 |
|
15,430,814 |
|
4,775,598 |
|
6,884,733 |
|
(1,074,340 |
) |
37,651,667 |
|
|
Cost of sales |
|
(10,405,078 |
) |
(14,514,789 |
) |
(4,103,231 |
) |
(6,238,749 |
) |
1,073,906 |
|
(34,187,941 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
1,229,784 |
|
916,025 |
|
672,367 |
|
645,984 |
|
(434 |
) |
3,463,726 |
|
|
Selling, general and administrative expenses |
|
(678,369 |
) |
(778,218 |
) |
(253,177 |
) |
(284,962 |
) |
(244,302 |
) |
(2,239,028 |
) |
|
Other operating income (expenses) |
|
2,111 |
|
26,223 |
|
41,396 |
|
14,166 |
|
43,951 |
|
127,847 |
|
|
Impairment of assets |
|
— |
|
(2,779,146 |
) |
(138,765 |
) |
— |
|
— |
|
(2,917,911 |
) |
|
Gains and losses on assets held for sale and sales of interest in subsidiaries and associate company |
|
— |
|
— |
|
— |
|
— |
|
(58,223 |
) |
(58,223 |
) |
|
Equity in earnings of unconsolidated companies |
|
— |
|
(46,917 |
) |
16,366 |
|
— |
|
17,780 |
|
(12,771 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operational (Loss) income before financial income (expenses) and taxes |
|
553,526 |
|
(2,662,033 |
) |
338,187 |
|
375,188 |
|
(241,228 |
) |
(1,636,360 |
) |
|
Financial result, net |
|
(603,373 |
) |
(63,654 |
) |
(96,822 |
) |
(148,313 |
) |
(33,093 |
) |
(945,255 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) before taxes |
|
(49,847 |
) |
(2,725,687 |
) |
241,365 |
|
226,875 |
|
(274,321 |
) |
(2,581,615 |
) |
|
Income and social contribution taxes |
|
13,140 |
|
133,818 |
|
(107,124 |
) |
(64,348 |
) |
(279,800 |
) |
(304,314 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (Loss) |
|
(36,707 |
) |
(2,591,869 |
) |
134,241 |
|
162,527 |
|
(554,121 |
) |
(2,885,929 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales between segments |
|
885,050 |
|
90,267 |
|
6,386 |
|
92,637 |
|
— |
|
1,074,340 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation/amortization |
|
952,848 |
|
874,299 |
|
182,672 |
|
526,136 |
|
— |
|
2,535,955 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in associates and jointly-controlled entities |
|
— |
|
303,526 |
|
404,522 |
|
— |
|
90,796 |
|
798,844 |
|
|
Total assets |
|
18,672,770 |
|
16,459,784 |
|
5,582,926 |
|
11,970,202 |
|
1,949,459 |
|
54,635,141 |
|
|
Total liabilities |
|
10,761,705 |
|
3,407,444 |
|
1,651,590 |
|
6,519,255 |
|
8,020,494 |
|
30,360,488 |
|
|
|
|
Business Segments |
|
||||||||||
|
|
|
2015 |
|
||||||||||
|
|
|
Brazil Operation |
|
North America |
|
South America |
|
Special Steels |
|
Eliminations and |
|
Consolidated |
|
|
Net sales |
|
12,977,327 |
|
17,312,166 |
|
5,477,228 |
|
8,882,071 |
|
(1,067,551 |
) |
43,581,241 |
|
|
Cost of sales |
|
(11,433,115 |
) |
(15,800,270 |
) |
(4,800,063 |
) |
(8,333,189 |
) |
1,076,111 |
|
(39,290,526 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
1,544,212 |
|
1,511,896 |
|
677,165 |
|
548,882 |
|
8,560 |
|
4,290,715 |
|
|
Selling, general and administrative expenses |
|
(821,152 |
) |
(814,393 |
) |
(313,521 |
) |
(371,481 |
) |
(261,938 |
) |
(2,582,485 |
) |
|
Other operating income (expenses) |
|
3,638 |
|
18,379 |
|
2,985 |
|
21,791 |
|
50,207 |
|
97,000 |
|
|
Impairment of assets |
|
(834,665 |
) |
(1,882,239 |
) |
(354,468 |
) |
(1,924,868 |
) |
— |
|
(4,996,240 |
) |
|
Equity in earnings of unconsolidated companies |
|
— |
|
(72,774 |
) |
36,550 |
|
— |
|
11,722 |
|
(24,502 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operational (Loss) income before financial income (expenses) and taxes |
|
(107,967 |
) |
(1,239,131 |
) |
48,711 |
|
(1,725,676 |
) |
(191,449 |
) |
(3,215,512 |
) |
|
Financial result, net |
|
(624,526 |
) |
(234,183 |
) |
(98,557 |
) |
(288,021 |
) |
(1,633,609 |
) |
(2,878,896 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) before taxes |
|
(732,493 |
) |
(1,473,314 |
) |
(49,846 |
) |
(2,013,697 |
) |
(1,825,058 |
) |
(6,094,408 |
) |
|
Income and social contribution taxes |
|
60,804 |
|
5,196 |
|
(104,308 |
) |
(283,633 |
) |
1,820,363 |
|
1,498,422 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (Loss) |
|
(671,689 |
) |
(1,468,118 |
) |
(154,154 |
) |
(2,297,330 |
) |
(4,695 |
) |
(4,595,986 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales between segments |
|
817,494 |
|
121,292 |
|
685 |
|
128,080 |
|
— |
|
1,067,551 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation/amortization |
|
928,861 |
|
836,660 |
|
192,014 |
|
650,374 |
|
— |
|
2,607,909 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in associates and jointly-controlled entities |
|
— |
|
725,356 |
|
575,845 |
|
2,082 |
|
89,599 |
|
1,392,882 |
|
|
Total assets |
|
20,791,119 |
|
27,324,285 |
|
7,046,438 |
|
17,077,208 |
|
(2,144,341 |
) |
70,094,709 |
|
|
Total liabilities |
|
12,831,815 |
|
7,214,899 |
|
2,451,835 |
|
9,369,552 |
|
6,256,225 |
|
38,124,326 |
|
The main products sold in each segment are:
Brazil Operations: rebar, bars, shapes, drawn products, billets, blooms, slabs, wire rod, structural shapes and iron ore.
North America Operations: rebar, bars, wire rod, light and heavy structural shapes.
South America Operations: rebar, bars and drawn products.
Special Steel Operations: stainless steel, round, square and flat bars, wire rod.
The column of eliminations and adjustments includes the elimination of sales between segments, corporate expenses, gains and losses on assets held for sale and sales of interest in subsidiaries and associate company, reversal of contingent liabilities, net, reversal of monetary update of contingent liabilities, net in the context of the Consolidated Financial Statements.
The Company’s geographic information with revenues classified according to the geographical region where the products were shipped is as follows:
|
|
|
|
|
|
|
|
|
|
|
Geographic Area |
|
|
|
|
Brazil |
|
Latin America (1) |
|
North America (2) |
|
Europe/Asia |
|
Consolidated |
|
|
|
|
2017 |
|
2017 |
|
2017 |
|
2017 |
|
2017 |
|
|
Net sales |
|
13,450,378 |
|
4,769,526 |
|
18,142,218 |
|
555,497 |
|
36,917,619 |
|
|
Total assets |
|
23,872,075 |
|
6,009,394 |
|
19,629,950 |
|
790,342 |
|
50,301,761 |
|
|
|
|
Brazil |
|
Latin America (1) |
|
North America (2) |
|
Europe/Asia |
|
Consolidated |
|
|
|
|
2016 |
|
2016 |
|
2016 |
|
2016 |
|
2016 |
|
|
Net sales |
|
12,229,582 |
|
5,828,564 |
|
17,917,485 |
|
1,676,036 |
|
37,651,667 |
|
|
Total assets |
|
24,266,983 |
|
6,159,387 |
|
23,463,447 |
|
745,324 |
|
54,635,141 |
|
|
|
|
Brazil |
|
Latin America (1) |
|
North America (2) |
|
Europe/Asia |
|
Consolidated |
|
|
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
|
Net sales |
|
14,033,792 |
|
6,653,980 |
|
19,813,519 |
|
3,079,950 |
|
43,581,241 |
|
|
Total assets |
|
22,803,505 |
|
9,327,457 |
|
36,048,019 |
|
1,915,728 |
|
70,094,709 |
|
(1) Does not include operations of Brazil
(2) Does not include operations of Mexico
IFRS requires the Company to disclose revenue per product unless the information is not available and the cost to obtain it would be excessive. Management does not consider this information useful for its decision making process, because it would aggregate sales in different markets and in different currencies, subject to the effects of changes in exchange rates. Furthermore, the trends of steel consumption and the price dynamics of each product or group of products in different countries and different markets within these countries are poorly correlated and, as a result, the information would not be useful and would not serve to conclude about historical trends. Considering this scenario and considering that the information of revenue by product is not maintained by the Company on a consolidated basis and the cost to obtain the revenue per product information would be excessive compared to the benefits of the information, the Company does not present revenue by product.