CSN Mineração (CMIN3) Q2 2024 earnings summary

Executive summary

• Achieved the second highest own production volume in company history at 10.4 million tons in Q2 2024, driven by operational efficiency, logistics optimization, and cost control, despite lower iron ore prices and market volatility.

• Adjusted EBITDA reached R$1.62 billion, with margin rising to 49% (up 8.6 p.p. sequentially), supported by higher sales volumes and lower production costs.

• Net profit surged to R$1.51 billion, a 170.2% increase over the previous quarter, reflecting improved operations, hedging gains, and FX effects.

• Net cash position reached R$2.8 billion, reflecting strong cash generation and robust capital structure.

Financial highlights

• Sales volumes grew 18% sequentially to 10.8 million tons in Q2 2024, supporting revenue growth to R$3.32 billion, up 18.5% from Q1 2024.

• Adjusted cash flow was R$1.2 billion, aided by operating results and hedging gains.

• C1 cash cost fell 10% sequentially to US$21.2/t.

• Unit net revenue per ton dropped to US$58.6 due to lower prices and product adjustments.

• Free cash flow reached R$1.1 billion, with cash and equivalents at R$11.8 billion at quarter-end.

Outlook and guidance

• 2024 production guidance: 42.0–43.5 million tons, with C1 cash cost between US$21.5–23/t.

• Capex for 2024 projected at R$2 billion, with R$15.3 billion planned for 2023–2028 and potential EBITDA of R$4 billion from the P15 project by 2028.

• Management maintains guidance, citing operational control, but notes external factors may impact results.

• Dividend policy to be maintained, supported by strong cash position.