National Steel Q1 Earnings Call Highlights
National Steel (NYSE:SID), the Brazilian steelmaker known as CSN, reported higher first-quarter 2026 adjusted EBITDA despite heavy rainfall, a stronger Brazilian real and continued pressure from steel imports in the early part of the year, executives said on the company’s earnings call.
Marco Rabello, CSN’s investor relations executive officer, said consolidated EBITDA rose 5.5% to 5.6% from the same period a year earlier, with margin expansion of 1.8 percentage points. He said the performance reflected the benefits of CSN’s diversified portfolio, with cement and logistics helping offset weaker conditions in steel and mining.
“This shows the importance of having a diversified operation and a good portfolio,” Rabello said. He added that CSN reduced leverage to 3.36 times in the first quarter, down from 3.47 times in the prior period, supported by operational improvements, debt payments and new prepayment contracts.
Rainfall Weighs on Operations, But Mining Sets Production Record
Management repeatedly cited unusually heavy rainfall as a key challenge across mining, steel, cement and logistics. Rabello said mining recorded a first-quarter record for own production despite “some situations of public calamity” in areas near the company’s mine. He said the result demonstrated operational resilience and the ability to mitigate weather-related disruptions.
Rabello also said Tecar reached a new shipment record for the period, totaling 8,700 tons, and described the asset as robust. Iron ore pricing helped offset cost pressures, particularly freight, and management said the current pricing environment should support the segment for the remainder of the year.
Chairman Benjamin said the rainfall was not only intense but concentrated, with some days receiving more rain than would normally be expected over a much longer period. He said that created operational and logistics difficulties, but mining still performed “in an exceptional fashion.”
Steel Shows Signs of Improvement After Weak January and February
Rabello said the steel business faced a challenging start to the year as importers attempted to bring material into Brazil before protective measures took effect in March. Even with that pressure and normal first-quarter seasonality, steel sales rose 12% from the previous quarter. March accounted for about half of the quarter’s sales, which management said showed an improving trend for domestic producers.
CSN said domestic steel prices were stable in the first quarter, with price adjustments implemented early in the year offsetting pressure from imports. The stronger real weighed on translated results. Rabello said CSN implemented another price adjustment in April, and international trends support further increases.
In response to analysts’ questions, Luis Martinez, CSN’s executive director, said January and February were difficult months, but March showed meaningful improvement in both volume and pricing. He said the company expects better second-quarter results and is targeting a return to double-digit EBITDA margins in steel.
Martinez said CSN implemented price increases of 5% to 6.5% in April, depending on the product line, and has another increase scheduled for the second half of May. He said management is taking a cautious approach to avoid disrupting recovering volumes, particularly in coated products.
Martinez also pointed to a sharp expected decline in imports in the second and third quarters, citing trade defense measures against Chinese steel and ongoing discussions with Brazilian authorities regarding anti-dumping enforcement, tariff quotas and circumvention through other countries.
Cement Delivers Record EBITDA as Divestiture Process Advances
CSN’s cement segment was the standout performer in the quarter. Rabello said cement delivered the highest EBITDA in the company’s history, nearly BRL 400 million, with an EBITDA margin of 31.2%. He said the result came during a seasonally weaker quarter affected by rainfall, highlighting the segment’s resilience and pricing power.
Rabello said annualizing first-quarter cement EBITDA would imply potential EBITDA above BRL 1.6 billion for the year, while normal seasonality could put the figure above BRL 2 billion. He emphasized that this was not formal company guidance.
Management attributed cement demand to a strong labor market, wage growth and housing activity tied to Brazil’s Minha Casa, Minha Vida program. Edvaldo Rabelo, CSN’s executive officer for cement, said the company expects stronger results in coming quarters, supported by market growth, price recovery and cost management, despite pressure from petcoke and other input costs.
The cement divestiture process remains on schedule, executives said. Rabello said CSN received more than seven qualified non-binding proposals, and Chairman Benjamin said two were above the company’s expectations. Rabello later said CSN expects to move into a binding-offer phase with a smaller group of bidders, conduct due diligence and technical visits, and sign a sale agreement in the second half of the year. The company is selling control of the business, with the final ownership percentage to be determined by the buyer.
Logistics and Energy Support Diversified Earnings
Rabello said logistics was also affected by seasonal rainfall, which reduced cargo volumes on railroads. Even so, the segment grew EBITDA 26% from the same period a year earlier and maintained profitability above 40%, which he said demonstrated the resilience of CSN’s integrated platform.
The energy segment also posted strong growth, with EBITDA rising more than 92% from the prior quarter due to improved energy availability and prices, Rabello said.
Deleveraging Remains Central Focus
CSN’s management emphasized debt reduction as a central priority for 2026. Rabello said the company ended the quarter with BRL 2.6 billion in cash, which he described as more than sufficient for the short term. He said the company signed a $1.2 billion bridge loan in April, with the possibility of expanding it to $1.4 billion, to anticipate part of the proceeds from asset sales and address short- and medium-term needs.
In the Q session, Rabello said the bridge loan is structured as a committed facility, with CSN drawing funds as needed to avoid unnecessary interest costs. He said about one-third of the line had been used and that the company may use the facility over the next four months, depending on the timing of asset sales and refinancing opportunities.
Rabello said CSN is also working to reduce inventories and release working capital. He said the company had about BRL 12 billion in inventories across raw materials, work-in-process, finished goods and parts, and that a program started in April aims to convert excess materials into cash.
Management said other deleveraging initiatives include the infrastructure divestiture process, potential monetization of non-core assets and ongoing debt refinancing. Rabello said CSN is in talks with multiple creditors and has already rescheduled some bank debt without partial payments. He said the company also wants to address its 2028 bond “as soon as possible,” though no formal refinancing proposal had been made.
Helena Guerra, CSN’s director of sustainability, environment, health and safety, said the company improved ESG reporting and maintained stability in its tailings dams despite the heavy rainfall. She said CSN was positioned among the 10% of companies with the lowest ESG risk and had its MSCI rating upgraded from BB to BBB. Guerra also noted progress in reducing greenhouse gas emissions in steel and cement production, while saying health and safety remained a challenging area after more serious accidents during the quarter.
About National Steel (NYSE:SID)
Companhia Siderúrgica Nacional operates as an integrated steel producer in Brazil and Latin America. It operates through five segments: Steel Industry, Mining, Logistics, Energy, and Cement. The company offers flat steel products, such as hot and cold rolled, galvanized, galvalume, pre-painted, and metal sheets products; coil, sheets, and derivatives; tiles and derivatives, pipes, and profiles; long steel products; steel packaging solutions for the food industry; chemical packaging solution; and carbochemical products.
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