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.

• Adjusted EBITDA reached R$2.3 billion with a margin of 19.7%, down from 23.2% in 2Q24, mainly due to lower iron ore prices.

• Net loss of R$751 million in Q3 2024, a significant decline from the previous quarter, driven by lower operating income and higher financial expenses.

• Strengthened cash position by BRL 3.7 billion through export credits, prepayment contracts, and receivables, despite weaker international prices impacting EBITDA.

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

Financial highlights

• Adjusted EBITDA reached R$2,284 million in 3Q24, up 3.8% from 2Q24; margin at 19.7%–27.5% depending on segment.

• Net revenue totaled R$11.07 billion in Q3 2024, up 1.7% sequentially but down 0.5% year-over-year.

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

• Net debt at R$34.2 billion; net debt/EBITDA at 3.34x as of 3Q24.

• Cash and equivalents at R$19.32 billion, up 16.6% sequentially.

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.

• Management confirmed the going concern assumption and highlighted adequate resources for ongoing operations.

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