CSN Mineração (CMIN3) Q4 2024 earnings summary

Executive summary

• Achieved highest own production since 2019, with annual growth of 3.7 million tons (+13.4%), surpassing guidance and setting operational records despite seasonal rain impacts in 4Q24.

• Net income surged 352% in 4Q24 and 26.9% year-over-year to R$4.5 billion, supported by operational improvements and exchange rate gains.

• Prioritized margin over volume, reducing purchases and inventory by 17.1%, and achieved record export volumes through own port, generating significant cost savings.

• Maintained robust net cash position and strong cash generation, even after R$3 billion in dividends and interest on equity payments.

• Strong ESG performance: 100% increase in female representation, 10% reduction in CO2 emissions per ton, and entry into FTSE4GOOD portfolio.

Financial highlights

• 4Q24 adjusted EBITDA reached R$2.0 billion (51.6% margin), up 77% sequentially; annual adjusted EBITDA was R$5.9 billion (45.3% margin).

• 4Q24 net revenue was R$3.9 billion, up 31.4% sequentially; 2024 net revenue was R$13.0 billion, down 23.7% year-over-year.

• Cost of goods sold dropped 21.9% year-over-year, reflecting reduced third-party purchases and lower prices.

• Adjusted free cash flow in 4Q24 was R$212 million, reversing the previous quarter's negative result.

• 4Q24 iron ore sales were 10.7 million tons; annual sales reached 42.6 million tons, nearly flat year-over-year.

Outlook and guidance

• 2024 iron ore production met or exceeded guidance, with a margin-over-volume strategy and reduced third-party purchases.

• Infrastructure works for the P15 expansion project began in 4Q24, expected to accelerate investment pace.

• Prepayment contracts at 49.2 million tons, with 3 million tons maturing in 2024; company plans to roll maturities and maintain cash generation.

• CAPEX to increase steadily, with R$1.8 billion in 2024 (up 20.7% YoY) and R$3.2 billion planned over five years.