CSN Mineração (CMIN3) Q4 2024 earnings summary

Executive summary

• Achieved highest own production since 2019, with annual growth of 3.78 million tons (+13.4%), surpassing guidance and setting records at TECAR, despite seasonal rain impacts in 4Q24.

• Prioritized margin over volume, reducing third-party purchases and inventory by 17.1%, and achieving a unit cost below guidance at $21 per ton.

• Net income surged 352% in Q4 to R$2 billion, and 26.9% year-over-year to R$4.5 billion, driven by price recovery, operational improvements, and cost reductions.

• 100% of exports shipped via own port, with record shipments reducing logistics costs and reliance on third-party ports.

• ESG achievements include 100% growth in female representation, 10% reduction in CO2 emissions per ton, and 73% reduction in water use intensity; ranked 8th globally by Sustainalytics and entered FTSE4Good Index.

Financial highlights

• 4Q24 adjusted EBITDA reached R$2.0 billion (51.6% margin), up 77% sequentially; full-year EBITDA was R$5.9 billion (45.3% margin).

• 4Q24 net revenue was R$3.9 billion, up 31.4% sequentially but down 22.1% year-over-year; 2024 net revenue was R$13.0 billion, down 23.7% year-over-year.

• Cost of goods sold dropped 21.9% year-over-year to R$6.8 billion, reflecting reduced third-party purchases and lower prices.

• Adjusted free cash flow in 4Q24 was R$212 million, reversing the previous quarter's negative result.

• Ended 2024 with R$15.2 billion in cash and equivalents, despite R$3 billion in dividend and interest on equity payments.

Outlook and guidance

• 2024 iron ore production met or exceeded guidance, with a focus on margin over volume and reduced third-party purchases.

• Market outlook remains constructive, with expectations of stable iron ore prices around $100–$110 per ton.

• Infrastructure works for the P15 expansion project began in 4Q24, expected to accelerate investment pace.

• CAPEX expected to rise, with R$2–2.5 billion planned for 2025 and an average of R$2.6 billion per year over the next five years.

• Prepayment contracts at 49.2 million tons, with maturities managed to avoid cash flow impact.