Cia de Ferro Ligas da Bahia – FERBASA

What it is

Founded on 23 February 1961 by engineer José Corgosinho de Carvalho Filho, Ferbasa began in Campo Formoso, Bahia as a chromite mining company and grew to become the largest producer of ferroalloys in Brazil and the sole integrated ferrochrome producer in the Americas.

Its industrial capacity stands at 342,000 tonnes of ferroalloy per year — ferrochrome from eight furnaces and ferrosilicon from six — and it controls the entire supply chain, from mining chromite ore and quartz to producing its own charcoal fuel and generating electricity through 92 wind turbines.

The company makes its own carbon-based fuel (charcoal) from cultivated eucalyptus forests, feeding it directly into its reduction furnaces — a built-in cost buffer most rivals lack.

Ferbasa’s customers are mainly the steel and stainless steel industry, in both domestic and international markets.

Who owns it

The controlling shareholder is Fundação José Carvalho (FJC), a charitable educational foundation that holds 50.1% of the company, including 98.8% of the ordinary (voting) shares. That means the foundation controls every board vote while outside investors hold the economic upside through preference shares.

The founder donated a large part of his Ferbasa shares to the foundation fifteen years after founding the company, and today the FJC uses the income to run six schools that serve around 4,000 needy children and adolescents in Bahia.

A legal dispute over this arrangement is live in the Brazilian courts: José Eduardo de Carvalho, the founder’s son, contests the legality of the original donation and is seeking to be recognised as a shareholder. Ferbasa says the dispute is between third parties and its controlling shareholder, and is unrelated to the company itself.

Who runs it

As of April 2026, Silvano de Souza Andrade serves as CEO and now also as Investor Relations Officer, after the board added that second role to his mandate in April 2026.

The financial and investor relations function is supported by Heron Albergaria de Melo as Financial and IR Officer, and Carlos Henrique Temporal as IR Manager. The Board of Directors is chaired by Sergio Curvelo Dória.

The money, in plain words

Sales edged up 4.4% in 2025 to R$2.33 bn (~US$453 m) after a 8.2% fall the year before — a company bouncing on the bottom of the ferrochrome price cycle, not yet climbing out of it (our calculation).

The company kept only about 8 cents of profit from every real of sales — a net margin of 8.1% — down sharply from 14.6% in 2024 and 15.7% in 2023 (our calculation); a squeeze in gross profit from R$534 m (US$104 mn) to R$268 m (US$52 mn) tells you that higher costs, not lower volumes, did the damage.

For every real shareholders own in the business, Ferbasa earned roughly 5.7 cents last year — a return on equity of 5.7% — below what investors could earn in Brazilian government bonds, which is the central tension in the investment case right now (our calculation).

The balance sheet is essentially flat: cash of R$373 m (~US$72 m) sits against debt of R$412 m (~US$80 m), leaving a tiny net debt of R$39 m (~US$7.6 m) — the company is not leveraged in any meaningful way (our calculation).

Despite the earnings compression, the board paid out enough to deliver a dividend yield of 7.1% — nearly double the payout a typical Brazilian equity offers — because the foundation-owner depends on that income to fund its schools.

At a price-to-earnings ratio of 24.6×, the stock is priced for a recovery that has not yet arrived in the numbers.

What it is doing now

In the most recent quarter reported, ferroalloy revenue grew 14.2% quarter-on-quarter, with export sales jumping 34.5%, and consolidated net revenue rose 11.1% to R$602.6 m (US$117 mn).

The company directly and indirectly employs around 4,800 people across 18 municipalities in Bahia. Key risks flagged include cost inflation, regulatory challenges on energy generation, and currency moves that affect profitability.

What to watch

• Ferrochrome price cycle. Ferbasa’s margin lives and dies with global chrome prices, which collapsed in 2023–25; any recovery in stainless steel demand in China would flow straight to the bottom line.
• Ownership litigation. The founder’s son has two live court actions contesting the legality of the share donation to the foundation; an adverse ruling would destabilise the company’s entire ownership structure.
• Wind energy regulation. The company generates its own electricity from 92 wind turbines; any change in Brazil’s renewable energy rules could alter a significant cost advantage.
• Dividend sustainability. With profits down 50% in two years yet yield still above 7%, the question is whether the payout holds — or whether the foundation’s own funding needs force a cut that would reprice the stock.

This is news, not investment advice.