CSN Mineração (CMIN3) Q3 2024 earnings summary

Executive summary

• Achieved record iron ore sales volume of 11.9 million tons in 3Q24, the highest in company history, reflecting operational efficiency and improved cost structure with C1 cost at US$19.2/ton, the lowest since 2021.

• Net cash position reached R$5.3 billion, supported by new prepayment contracts and strong deleveraging, with Net Debt/EBITDA at -0.80x.

• Approved R$3 billion in dividends and interest on capital to be paid by year-end 2024.

• Net profit for 3Q24 was R$446.3 million, down 70.4% sequentially, mainly due to weaker iron ore prices, higher freight costs, and negative exchange rate effects.

• Strategic focus on margin led to reduced third-party purchases and inventory drawdown.

Financial highlights

• Net revenue for 3Q24 was R$2.97 billion, down 10.5% from 2Q24 and 31% year-over-year, mainly due to lower iron ore prices despite record sales volume.

• Adjusted EBITDA was R$1.1 billion with a margin of 38.3%, down from 48.7% in 2Q24, impacted by price declines and higher freight costs.

• Free cash flow was negative R$276 million, reflecting lower operating results, higher CapEx, and exchange rate effects.

• COGS increased 7.4% to R$1.77 billion, driven by higher sales volume and iron ore purchases.

• Gross profit in 3Q24 was R$910 million, a 33.9% decrease from 2Q24 and 49.1% from 3Q23.

Outlook and guidance

• Production and sales guidance for 2024 maintained at 42.0–43.5 million tons, with C1 cash cost projected at US$21–23/ton, expected at the lower end.

• CapEx for 2023–2028 projected at R$15.3 billion, with major investments in the P15 project expected to drive future EBITDA growth.

• Expansion projects, especially P15, drove a 17% increase in capital expenditures in 3Q24.