CSN(SID) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported an adjusted EBITDA of R $2.3 billion for Q3 2024, with a margin of 20% [17] - Net debt decreased from R$ 37 billion in Q2 to R $34 billion in Q3, indicating a reduction in leverage [21] - Free cash flow for the quarter was R$ 986 million, impacted by higher CapEx and financial expenses [20] Business Segment Performance - Mining: Achieved record production of 11.5 million tons, with production costs at $19.2 per ton, down from previous quarters [28][30] - **Steel**: Domestic sales volume increased by 9% in Q3, with a 20% rise in EBITDA due to a 5% drop in slab production costs [11][25] - **Cement**: Sales volume reached 3,600 tons, with EBITDA up 37% year-over-year and a profitability margin of 28% [12] - **Logistics**: Positive seasonality contributed to a 4% increase in EBITDA, benefiting from improved market prices [13][33] Market Data and Key Metrics Changes - The company noted a weaker dynamic in international iron ore prices, impacting consolidated results [17] - Domestic market dynamics showed a 9% growth in steel sales, reflecting effective commercial strategies [24] Company Strategy and Industry Competition - The company is focused on operational excellence and cost reduction across all segments, with ongoing investments in mining and steel efficiency [8][18] - Strategic partnerships and the sale of a stake in CMIN are part of the company's efforts to strengthen its financial position and reduce leverage [14][65] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the recovery of the cement market and infrastructure projects in Brazil, anticipating continued demand [47][82] - The company is preparing for potential price fluctuations in iron ore and steel, with expectations of improved margins in the coming quarters [42][60] Other Important Information - The company is actively pursuing anti-dumping measures to protect its market against high levels of imports, particularly in the tin plate sector [73][76] - The company has made significant strides in ESG initiatives, including a 10% reduction in CO2 emissions in the steel segment [36][37] Q&A Session Summary Question: Insights on steel mill costs and price dynamics - Management noted a recovery in margins and a drop in slab production costs, with a positive outlook for the fourth quarter [55][57][58] Question: Context on leverage and investment strategies - Management confirmed a target leverage of 2.5 times by year-end, with ongoing discussions for strategic partnerships and expected cash inflows from recent asset sales [63][65][66] Question: Updates on anti-dumping measures - Management provided details on the provisional anti-dumping measures for tin plate and ongoing discussions for additional products, emphasizing the need for government support [70][73][76] Question: Expectations for cement segment performance - Management highlighted strong performance in the cement segment, with expectations for continued growth and high margins [79][81][82] Question: Production cost outlook for iron ore - Management indicated a production cost of$ 19.2 per ton for iron ore, with long-term guidance between $21 to$ 23 per ton [94][95]