CSN cut its quarterly net loss 24.2% to R$555 million as a 23.9% adjusted EBITDA margin masked steel volumes falling 2.5% and leverage hitting 3.36x, making it the Americas’ most indebted major steelmaker.
3 Key Points
—Companhia Siderúrgica Nacional (CSNA3), the group behind Brazil’s historic Volta Redonda steelworks, cut its quarterly net loss 24.2% to R$555 million ($109M) — its third straight year in the red at the annual level — as adjusted EBITDA of R$2.6 billion ($510M) and a 23.9% margin showed the mining arm carrying what steel cannot.
—The steel division is the casualty of a global war: with Chinese exports flooding Brazil, CSN’s steel volumes fell 2.5% and the segment’s EBITDA margin collapsed to 7.0% (R$393 million on R$5.6 billion of revenue), while iron ore mining — the asset Chinese demand pays for — kept the group alive.
—Everything hangs on the balance sheet: net debt of R$40.5 billion ($7.9B) against equity of R$12.8 billion and a leverage ratio of 3.36x EBITDA make CSN the most indebted major steelmaker in the Americas — the stock, at R$5.10 and 0.54x book, is effectively a leveraged option on steel tariffs, Chinese stimulus and asset sales.
