CSN(SID)2024-05-10 22:24Financial Data and Key Metrics Changes - The company reported a consolidated EBITDA margin of 19% for Q1 2024, impacted by lower iron ore prices and seasonality [8][10] - There was a negative cash flow of BRL 636 million, influenced by lower operating results and interest rates [9] - Net debt increased by BRL 1.2 billion compared to Q1 2023, attributed to commodity price drops [10] Business Line Data and Key Metrics Changes - Mining achieved record sales of over 9 million tonnes, with an EBITDA margin of 40% despite a significant price drop [7][14] - Steel production increased by 5.7%, but the company faced challenges with pricing due to competition from imports [12][13] - Cement maintained stable revenue despite lower volumes, achieving an adjusted EBITDA margin surpassing 25% for the first time [15] Market Data and Key Metrics Changes - The domestic steel market faced pressure from imports, with a significant portion of flat steel coming from China [36][39] - The Brazilian cement market is projected to grow by 2% this year, with April showing positive volume reactions [66] - The company noted a stable demand in the Brazilian market, particularly in civil construction, with expectations for aggressive growth in Q2 [59] Company Strategy and Development Direction - The company aims to reduce leverage below 3 times while pursuing significant capital expenditures in mining and steel [24][46] - Strategic partnerships in energy and minority stakes in mining are being explored to diversify operations [11] - The focus remains on operational excellence and capturing synergies post-acquisition of Lafarge Holcim in the cement sector [68] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about recovering EBITDA in Q2 due to rising prices and improved production control [22][25] - Concerns were raised about the slow governmental response to import competition, particularly from China [30][31] - The company is committed to maintaining operational efficiency and leveraging its competitive advantages in the market [39][68] Other Important Information - The company published its 2023 integrated ESG report, highlighting advances in emissions control and safety measures [8][18] - A significant investment program is underway, focusing on infrastructure and operational improvements [12][24] Q&A Session All Questions and Answers Question: Impact of government measures on import competition - The management discussed the recent government quota system and its potential effects on stabilizing margins in the steel sector, emphasizing the need for more robust measures against unfair competition [34][36] Question: Growth opportunities and capital structure - Management addressed the balance between pursuing growth opportunities and maintaining leverage below 3 times, emphasizing cautious investment strategies [34][46] Question: Overview of the cement industry and investment analysis - The management provided insights into the cement market dynamics, including pricing strategies and operational efficiencies post-acquisition of Lafarge Holcim [63][66] Question: Future margin recovery in steel operations - Management discussed strategies for increasing profitability in the steel sector, focusing on cost reduction and price adjustments in response to market conditions [64][71]