Companhia Siderúrgica Nacional (CSNA3) Q2 2024 earnings summary

Executive summary

• Achieved record mining production since 2016 and record cement sales in 2Q24, with operational improvements and margin expansion across nearly all segments.

• Adjusted EBITDA rose 35% sequentially to R$2.6 billion, with margin up to 23.2%, driven by mining, cement, and steel recovery.

• Despite operational gains, net loss was R$223 million in Q2 and R$702 million for H1 2024, mainly due to higher financial expenses and FX losses.

• Strong cash position (R$16.57 billion) and ongoing deleveraging focus, though leverage increased to 3.36x due to FX impacts.

• ESG progress includes SBTI-approved decarbonization targets, FTSE4Good inclusion, and diversity milestones.

Financial highlights

• Net revenue reached R$10.88 billion in Q2 2024, up 12% sequentially, but H1 2024 revenue fell 7.7% YoY to R$20.6 billion.

• Adjusted EBITDA was R$2.6 billion in Q2 2024, up 35% sequentially, with margin at 23.2%.

• Adjusted cash flow was negative R$1.16 billion, impacted by working capital, investments, and FX.

• Net debt reached R$37.16 billion, with leverage at 3.36x.

• Interim dividends of R$950 million paid in May 2024.

Outlook and guidance

• Steel segment shows signs of recovery with improved demand, product mix, and price prospects.

• Mining and cement expected to maintain strong performance in H2 2024, with focus on operational efficiency and higher cement prices.

• Commitment to reducing leverage, targeting 2.5x by year-end, and ongoing capital recycling projects.