XML 36 R28.htm IDEA: XBRL DOCUMENT v3.23.3
Loans, borrowings, leases, cash and cash equivalents and short-term investments
 6 Months Ended
Jun. 30, 2023
Notes and other explanatory information [abstract]  
Loans, borrowings, leases, cash and cash equivalents and short-term investments

 

21.Loans, borrowings, leases, cash and cash equivalents and short-term investments

 

a) Net debt

 

The Company monitors the net debt with the objective of ensuring the continuity of its business in the long term.

 

       
    June 30, 2023   December 31, 2022
Debt contracts   12,417   11,181
Leases   1,520   1,531
Total of loans, borrowings and leases   13,937   12,712
         
(-) Cash and cash equivalents   4,983   4,736
(-) Short-term investments (i)   46   61
Net debt   8,908   7,915

 

(i) Substantially comprises investments in exclusive investment fund, whose portfolio is composed of committed transactions and Selic Treasury Notes (“LFTs”), which are floating-rate securities issued by the Brazilian government.

 

 

b) Cash and cash equivalents

 

   
  June 30, 2023 December 31, 2022
R$ 1,147 1,770
US$ 3,598 2,798
Other currencies 238 168
  4,983 4,736

 

 

c)Loans, borrowings, and leases

 

i) Total debt

 

     
    Current liabilities Non-current liabilities
  Average interest rate (i) June 30, 2023 December 31, 2022 June 30, 2023 December 31, 2022
Quoted in the secondary market:          
US$ Bonds 6.02% - - 7,157 6,157
R$ Debentures (ii) 10.07% 95 47 132 186
Debt contracts in Brazil in (iii):          
R$, indexed to TJLP, TR, IPCA, IGP-M and CDI 10.62% 50 46 226 232
R$, with fixed interest 3.04% - 2 - -
Debt contracts in the international market in:          
US$, with variable and fixed interest 5.37% 400 54 4,112 4,212
Other currencies, with variable interest 4.10% - - 9 9
Other currencies, with fixed interest 3.87% 12 11 68 78
Accrued charges   156 147 - -
    713 307 11,704 10,874

 

(i) In order to determine the average interest rate for debt contracts with floating rates, the Company used the rate applicable as of June 30, 2023.
(ii) The Company has debentures in Brazil obtained for the Company's infrastructure investment projects.
(iii) The Company entered into derivatives to mitigate the exposure to cash flow variations of all floating rate debt contracted in Brazil, resulting in an average cost of 3.42% per year in US$.

 

Future flows of debt payments, principal and interest

 

   
  Principal

Estimated future

interest payments (i)

2023 39 387
2024 657 759
2025 451 733
2026 572 702
2027 1,700 609
Between 2028 and 2030 3,125 1,519
2031 onwards 5,717 2,173
Total 12,261 6,882

 

(i) Based on interest rate curves and foreign exchange rates applicable as of June 30, 2023 and considering that the payments of principal will be made on their contracted payments dates. The amount includes the estimated interest not yet accrued and the interest already recognized in the interim financial statements.

 

Covenants

 

Some of the Company’s debt agreements with lenders contain financial covenants. The primary financial covenants in those agreements require maintaining certain ratios, such as debt to EBITDA (as defined in note 4a) and interest coverage. The Company did not identify any instances of noncompliance as of June 30, 2023.

 

ii) Lease liabilities

 

           
  December 31, 2022 Additions and contract modifications Payments (i) Interest Translation adjustment June 30, 2023
Ports 690 - (34) 12 6 674
Vessels 441 5 (32) 8 (2) 420
Pelletizing plants 222 12 (2) 5 18 255
Properties 105 - (19) 2 8 96
Energy plants 52 - (2) 2 - 52
Mining equipment 21 2 (3) 1 2 23
Total 1,531 19 (92) 30 32 1,520
Current liabilities 182         199
Non-current liabilities 1,349         1,321
Total 1,531         1,520

 

(i) The total amount of the variable lease payments not included in the measurement of lease liabilities for the six-month period ended June 30, 2023 was US$74 (2022: US$143).

 

Annual minimum payments and remaining lease term

 

The following table presents the undiscounted lease obligation by maturity date. The lease liability recognized in the statement of financial position is measured at the present value of such obligations.

 

                               
    2023   2024   2025   2026   2027 onwards   Total   Average remaining term (years)   Discount rate
Ports   49   66   65   52   697   929   3 to 20   3% to 5%
Vessels   46   60   59   54   292   511   2 to 10   3% to 4%
Pelletizing plants   59   50   47   17   115   288   1 to 10   2% to 5%
Properties   25   28   18   16   38   125   1 to 10   1% to 6%
Energy plants   5   7   7   6   46   71   1 to 7   5% to 6%
Mining equipment   6   6   6   5   2   25   1 to 5   2% to 6%
Total   190   217   202   150   1,190   1,949