Companhia Siderúrgica Nacional (CSNA3) Q3 2024 earnings summary

Executive summary

• Achieved record sales volumes and cost reductions across all business segments in 3Q24, with operational excellence driving cost reductions and expanded industrial capacity, despite weaker price dynamics, especially in mining.

• Domestic steel sales volume rose 9% sequentially, and mining and cement segments set new sales records.

• Adjusted EBITDA reached R$2.3 billion with a margin of 19.7%–27.5%, pressured by lower iron ore prices.

• Leverage decreased due to improved cash management, capital recycling, and major stake sales in cement and mining.

• Strong ESG progress with zero fatalities, reduced emissions, and increased diversity.

Financial highlights

• Net revenue totaled R$11.07 billion, up 1.7% sequentially but down 0.5% year-over-year.

• Adjusted EBITDA reached R$2.3 billion in Q3 2024, margin between 19.7% and 27.5%, impacted by lower iron ore prices.

• Free cash flow was negative R$986 million, impacted by higher CapEx, increased financial expenses, and higher income tax disbursement.

• Net debt reduced to R$34.2 billion, with net debt/EBITDA at 3.34x.

• Gross debt at R$54.5 billion; average debt term 51.2 months.

Outlook and guidance

• Positive outlook for steel and cement segments, with expectations of margin recovery and continued operational improvements.

• Guidance for leverage at 2.5x by year-end, supported by asset sales and operational evolution, though challenges remain due to market volatility.

• Additional R$4.4 billion in cash expected in 4Q24 from the sale of a mining stake.

• Anticipates price recovery in steel by Q3 2025, with government measures supporting margin normalization.

• Ongoing focus on capital recycling and extending debt amortization terms.