National Steel Q2 Earnings Call Highlights

National Steel (NYSE:SID), also known as CSN, reported higher consolidated EBITDA in the second quarter of 2026, supported by improved commercial performance across its steel, cement, logistics and energy businesses, while management continued to emphasize asset sales, working-capital reductions and debt-management initiatives.

Investor Relations Executive Officer Marco Rabello said consolidated EBITDA increased 5% both sequentially and from the prior-year period. The company generated positive free cash flow of BRL 808 million, reversing negative cash flow reported in prior quarters. Rabello attributed the improvement primarily to working-capital release and fundraising activity, which helped offset debt amortization and prepayment-contract obligations.

“The expectation is that the company will gradually evolve to a more sustainable cash generation going forward,” Rabello said.

Steel recovery aided by anti-dumping measures

CSN’s steel business showed signs of recovery after a difficult period, according to management. The company said anti-dumping measures approved in March reduced imports and improved conditions for domestic producers. Steel sales increased 17% during the quarter, driven by stronger domestic and export activity. Domestic sales rose 10% year over year, while the company cited its highest export volume since the first quarter of 2023.

Luis Fernando Martinez, an executive director at CSN, said the company increased domestic flat-steel sales by 11% and achieved approximately 4% price growth. He said about 600,000 metric tons of market demand had shifted from imports to domestic production through June, with CSN capturing roughly 70% of that volume.

Steel EBITDA margin returned to double digits, reaching 10.5% in the second quarter, CEO Benjamin Steinbruch said. Martinez said management is targeting steel margins of 15% to 17% in the second half, supported by additional price adjustments, product-mix improvements and operating-efficiency initiatives.

Management continues to view imports from Asian countries, including Vietnam and Korea, as a concern. Martinez said CSN is seeking further trade measures, including anti-dumping actions involving Chinese products and certain imported tinplate products. He also said the company expects import penetration to decline toward a range of 15% to 17%.

Mining margins remained above 30% despite freight and currency pressure

CSN’s mining division recorded its fourth-best sales result in the segment’s history despite a 15-day shutdown for work at its operations. The company said May and June were among the strongest monthly performances in its history, aided by operational efficiency and drier seasonal conditions.

However, mining results were pressured by higher freight rates and foreign-exchange effects. Rabello said geopolitical tensions involving the U.S. and Iran contributed to higher maritime freight costs, while exchange-rate effects also weighed on revenue and EBITDA. Mining profitability nevertheless remained above 30%, according to the company.

Management expects mining performance to improve in the third quarter as scheduled shutdowns conclude, dry-weather conditions continue and the exchange rate improves relative to recent weeks. CSN is also working to manage freight-rate pressure.

The company said it continues to advance the P15 mining project, which is expected to be completed by the end of 2027. The project is expected to ramp up during 2028 and become fully operational in 2029. Rabello said approximately BRL 4 billion in capital expenditures remain for the project, which is being funded through a long-term credit line.

Cement, logistics and energy delivered record or near-record results

The cement business posted its second consecutive quarterly EBITDA record, supported by resilient demand, higher prices and a commercial strategy focused on profitability rather than volume. CSN said cement revenue increased 14% from the prior quarter and 10% from the year-earlier period. EBITDA exceeded BRL 420 million, according to the presentation, with a margin above 30%.

Steinbruch cited demand connected to Brazil’s Minha Casa, Minha Vida housing program and infrastructure projects. Management said average cement prices had reached BRL 75 to BRL 80, compared with historical levels of BRL 55 to BRL 60 cited by Rabello.

CSN received binding offers for its cement business and said it would disclose further details once a buyer, final valuation and transaction terms are determined. Rabello said the sale is expected to be an important component of the group’s deleveraging plan, though he did not provide the number or value of bids.

Logistics recorded its second-highest EBITDA in the company’s history, with profitability above 45%. CSN attributed the performance to drier weather, increased cargo transportation and efficiencies in its multimodal operations. The company expects to receive non-binding offers by the end of the month for a minority stake in its infrastructure and logistics unit. Management said it expects to sell between 20% and 30% of that business.

Energy results benefited from retroactive recognition of revenue related to the Jacuí Hydroelectric Power Plant. The revenue had been contingent on the balance sheet since October 2025, and management expects the energy segment to return to more normalized results in coming quarters.

Deleveraging efforts remain central

CSN said capital expenditures rose 26% from the prior quarter and 6% from the year-earlier period, primarily reflecting construction progress at P13, as well as maintenance spending in mining and cement.

The company reduced working capital through lower inventory levels, particularly in steel, and expects the trend to continue. Rabello said CSN could release an additional BRL 1 billion of cash by year-end through reductions in inventories of finished products, raw materials, intermediate materials and maintenance supplies.

Net debt increased during the period due to prepayment-contract amortization, exchange-rate effects and a BRL 500 million impact involving Transnordestina, partially offsetting cash generation. Leverage declined to 3.49 times from 3.6 times, according to Rabello.

CSN also completed an exchange involving its 2030 bond, with 77% participation. Management said the transaction moved about $1 billion of maturities further into the future and should support discussions with bank creditors on extending remaining debt obligations.

“The most important path of deleveraging is to continue to have good sales and to focus on our operational performance, our cash generation,” Rabello said, while adding that the company could consider sales of additional non-core assets if its board decides to do so.

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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