Companhia Siderúrgica Nacional Q3 FY2024 earnings call

• Production and Cost: Growth in all segments, with mining at record production, steel seeing domestic sales growth, cement achieving new sales records, and logistics benefiting from seasonality.
• Cash and Debt: Reinforced cash by R$3.7 billion through initiatives like credit for exports and prepayment contracts, sale of CMIN stake brought in R$4.4 billion, net debt reduced from R$37 billion to R$34 billion.
• ESG: Signed gas supply contract with Petrobras, steel segment reduced CO2 emissions by 10%, mining reduced CO2 intensity, zero fatalities in worker safety, and diversity initiatives with over 7,000 women in the workforce.

Mining: Had robust performance with record production, sales of 11.5 million tons, production cost $19 per ton (down $9 from last quarter), net revenue dropped 11% due to ore price fall but offset by volume increase. Steel: Strong sales dynamic in domestic market, commercial activity grew 9%, slab costs dropped 5%, EBITDA up 20%, sales volume over 1.1 million tons. Cement: New sales records, 3600 tons sold, EBITDA 37% above last year, margin 28% above sector average. Logistics: Seasonality positive, EBITDA up 4%, growth in volume and billing.

• Leverage target of 2.5 times by end of 2024.
• Positive outlook for steel segment in Q4 and 2025, with expectations of iron ore prices around $100.
• Optimistic outlook for cement market due to growth in civil construction.

• International price fluctuations impacting results.
• High import penetration affecting steel prices.
• Exchange rate variability and delays in equipment/part deliveries for steel mill maintenance.

Q: Regarding steel mill costs and price dynamics, could you provide more on cost recovery and future price expectations?

A: Slab costs dropped 5%, outlook for Q4 and 2025 is positive with operational excellence aiming for slab costs to drop to R$3,000 per ton. Import penetration is a variable, but anti-dumping measures are in place for some products.

Q: How is leverage being managed, including prepayments and the sale of CMIN stake?

A: Leverage target is 2.5 times by end of 2024, sale of CMIN stake and prepayments are used as tools, with subsequent events like the sale of mining stake impacting leverage. Prepayments are routine tools with low net effect on the company.

Q: What's the status of anti-dumping measures for other products and import issues?

A: Anti-dumping measures are in place for tin plate, with the government working on further measures to address import penetration, focusing on competitiveness and verifying Chinese plants for dumping practices.