CSN Mineração (CMIN3) Q3 2024 earnings summary

Executive summary

• Achieved record iron ore sales volume of 11.9 million tons in 3Q24, the highest in company history, reflecting operational efficiency and improved cost structure with C1 cost at US$19.2/ton, its lowest in recent years.

• Net cash position reached R$5.3 billion, supported by new prepayment contracts and strong liquidity.

• Adjusted EBITDA for 3Q24 was R$1.1 billion with a margin of 38.3%, down from 48.7% in 2Q24, impacted by lower iron ore prices and higher freight costs.

• Net profit for 3Q24 was R$446.3 million, down 70.4% sequentially, mainly due to weaker prices, exchange rate effects, and absence of hedging gains.

• Approved R$3 billion in dividends and interest on capital to be paid by year-end 2024.

Financial highlights

• Net revenue for 3Q24 was R$2.97 billion, down 10.5% from 2Q24 and 31% year-over-year, mainly due to lower iron ore prices despite record sales volume.

• Adjusted EBITDA margin fell to 38.3% in 3Q24 from 48.7% in 2Q24, reflecting price declines and higher freight costs.

• Free cash flow was negative R$276 million, impacted by lower operating results, higher CapEx, and exchange rate effects.

• C1 cash cost reached US$19.2/ton, the lowest since 2021, down 9.4% from 2Q24.

• Capex in 3Q24 reached R$475 million, up 16.7% from 2Q24, driven by expansion projects, especially P15.

Outlook and guidance

• Production and sales guidance for 2024 maintained at 42.0–43.5 million tons, with C1 cash cost projected at US$21.5–23/ton, expected at the lower end.

• Capex for 2023–2028 projected at R$15.3 billion, with potential EBITDA of R$4 billion from the P15 project after ramp-up in 2028.

• Expect stronger cash generation in the next quarter, with CapEx to increase due to P15 project acceleration.