Brazilian iron ore miner MMX Mineracao e Metalicos SA posted a second-quarter net loss of BRR 392 million (USD 193.29 million), as slower demand from Europe and China reduced sales and cut prices. That compared with a net profit of BRR 90.9 million in the second quarter of last year and BRR 49.3 million profit in the first quarter of this year.

The company said in a filing to Brazil securities regulator that "Pessimism about the world economy, mainly in Europe and China, had a negative effect on the international iron ore market noting MMX expected global steel production to hold steady for the rest of the year and pick up in 2013.

Rio de Janeiro-based MMX is one of a conglomerate of companies forming the EBX group, controlled by Brazilian billionaire Eike Batista which has operations in oil, shipbuilding and other sectors as well as mining.

According to the filing, reflecting a drop in the price of the ore, revenue for the three months through end-June fell 31% from the second quarter of 2011 to BRR 216.1 million despite sales of iron ore in volume terms having fallen a lesser 18%.

Earnings before interest, taxes, depreciation and amortization, a gauge of operating profit known as EBITDA, fell 82% from the same quarter a year earlier to BRR 13.9 million.

MMX also suffered losses totaling BRR 412 million more than half of which was due to the recent weakening of Brazil's currency, the real, which drove up debt servicing costs.

MMX's iron ore sales were 1.7 million tonnes in the second quarter, down from 2.1 million tonnes in the same quarter of last year, the filing showed, but up from 1.4 million tonnes in the first quarter when output was hit by severe flooding.

Source - Reuters

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