管理層發言
Good morning, and thank you for holding. At this time, we would like to welcome everyone to CSN's Conference Call for the Results for the Second Quarter 2026. Today, we have with us the company's executive officers. We would like to inform you that this event is being recorded. You can access this event at www.csn.com.br/ir, where the presentation is also available. The replay of the event will be available soon after closing. Before proceeding, please bear in mind that some of the forward-looking statements herein are mere expectations or trends based on the current assumptions and opinions of the company's management. Future results, performance and events may differ materially from those expressed herein which do not constitute projections. In fact, actual results, performance or events may differ materially from those expressed or implied by forward-looking statements as a result of several factors such as the general and economic conditions in Brazil, interest rates, exchange rate levels, future rescheduling or prepayment of debt denominated in foreign currencies, protectionist measures in the U.S., Brazil and other countries, changes in laws and regulations and general competitive factors at a global, regional or national basis. We will now turn the floor over to Mr. Marco Rabello, Investor Relations Executive Officer, who will present the company's operating and financial highlights for CSN for the period. You may proceed, sir.
Good morning, everybody, and thank you for participating in another CSN conference call. We're going to present the results for the second quarter 2026, a very important period for the company where the company was able to overcome all the adversities relating to costs and raw materials to offer vigorous growth of EBITDA in the previous quarter and in comparison with the quarter of 2025. This 5% increase in consolidated EBITDA is a result of better operational performance in all segments, sales and the commercial activity. You also see the importance of having a diversified operation without bending to the pressures of a specific sector. Financially, another important point was the release of cash flow and the positive cash flow during the period increased compared to the previous quarter. Now this movement reflects the evolution of the projects that the company has been working on since the beginning of the year to resolve the capital structure. With this, the expectation is that the company will gradually evolve to a more sustainable cash generation going forward. We're very satisfied to announce the conclusion of the new 2030 bond with a leverage of more than 77%. This shows the success of the operation and the credibility that people have in the project and movement of the company. It's important for the company to calmly carry out its projects. For example, the divestment of assets, the conclusion of P15, release of working capital in the company. After the conclusion of these projects, the company will be able to adhere better to its long-term goals. Let's go on to the highlights of mining. In the second quarter, we reached the fourth best sales result in the history of the segment. This is very relevant when we see that the operation was in shutdown for 15 days for work in the mine. Elsewhere throughout the quarter, we had two of the best monthly performances in the history of CSN with May and June as the strongest months in the group. This shows a high level of efficiency that the operation has achieved. This performance was important to offset the increase in logistic costs and the exchange rate due to the Middle East tensions. Because of the exchange rate, the EBITDA of mining in the second quarter was lower than in the previous quarter, but even that way, guaranteed profitability above 30%, showing the resilience and profitability of the operation. In steel, after a challenging year, we became successful after the antidumping measures approved in March. This allowed for a significant reduction of unfair material entering the Brazilian ports, allowing Brazilian producers to have a greater stake. The improvement in the commercial environment also allowed for a price readjustment. In the quarter, we began working with higher prices. The result of this more favorable dynamic with 10% expansion of sales in the domestic market more than offset the slowdown in steel exports. Another important factor for the recovery of steel was the excellent results achieved by subsidiaries abroad. Our SWT subsidiary in Germany had the best commercial performance since 2022. And the American operation, despite the difficulties imposed by the tariff war, has also been able to deliver stronger results compared to last year. The combination of these factors have allowed for a strong expansion of results, allowing the company to offset the pressure on costs and return to double-digit performance. Now steel will be an important vector of results for the company this year. In the cement market, we continue to have exceptional performance. The company was once again able to deliver the highest EBITDA in its history. This is the second consecutive quarter of record, showing that the company is growing with resilient demand, higher prices and a very assertive commercial strategy. This EBITDA record in the second quarter occurred despite scheduled maintenance for the period, showing that the performance can improve further. The strategy that is being implemented of prioritizing value instead of volume is important because of the sound performance of the cement market. We have growth in salaried income and a new dynamic in the real estate market because of the Minha Casa, Minha Vida system. This allows profitability to be above 30% with an efficiency level above that of the sector. If we think about the results for the last 12 months, EBITDA has made a significant evolution compared to last year, reaching BRL 6 billion with an even greater growth perspective for the rest of the year. Very similar to steel, cement is an important factor for the results of the company. In terms of the sale of the asset last Friday, as informed in a material fact, we have received binding offers that are unique for the Brazilian market and should lead to a very interesting valuation. Finally, if we look to the right of the slide, we have a highlight in logistics and energy. This semester was also excellent with the second best EBITDA in the company's history. The seasonality of a drier weather and efficiency of the logistic model were fundamental to resume the work of cargo with a margin of 45% in the quarter. This extraordinary performance shows the strength of our asset portfolio and should enhance the sale with a minority sale of Infra of CSN, and we have a very high number of NDAs signed. The expectation is that by the end of the month, the company will receive nonbinding offers for a minority share in this company. In the sector of energy, we had a favorable dynamic in the sector. It ended up being driven by the retroactive recognition of revenue of a favorable decision related to the Jacuí Hydroelectric Power Plant, whose commercialization had been suspended since October 2025. Now energy returns to normalized levels in the coming quarter because of this. Let's now go on to Slide 3, where we present our EBITDA results and margin for the second quarter 2026. We see the favorable dynamic of the quarter with a higher EBITDA in the year-on-year and quarter-on-quarter comparison. We were able to neutralize the problem with logistics and deliver strong commercial growth in all sectors. If we look at the graph to the right, it becomes evident of the importance of having diversified assets: steel, mining, logistics and energy. We were able to offset the negative effect of a higher cost in mining. On the following slide, we present the company's investments where we can see an increase of 26% in CapEx vis-à-vis the previous quarter and a 6% year-on-year comparison. We have advanced in civil construction related to the P15 project of mining besides the disbursements carried out for maintenance in mining and cement. In Slide 5, we analyze our working capital, where we can see a significant reduction in the quarter-on-quarter comparison related to the lower inventory levels of the company. This is in line with the project that has been put in place since the beginning of the year to release cash and normalize the volume of the operation, especially in steel products. We expect this trend to continue in the second half of the year. This will improve cash conversion and we will have a higher balance of recoverable taxes also contributing to this new working capital for the quarter. In the next slide, we show you the results of our free cash flow, where we can see a positive flow of BRL 808 million, an important reversion after some negative quarters. Now the release of working capital and the fundraising were the main factors for this performance. This has helped us offset the substantial debt amortization and amortization of prepayment contracts during the period. For the coming quarters, the company will continue to move forward in an operational improvement of these results in a continuous release of working capital and in new contracts for prepayment to maintain the impact of these operations neutral. On Slide 7, we show you the situation of our indebtedness and leverage as well as the behavior of the debt throughout the semester. To the right, you see a buildup of net debt because of the amortization of prepayments of iron ore contracts, the exchange rate on contracts and the AFAC of BRL 500 million in Transnordestina. This has more than offset the cash generation recorded in the period. To the left, we went from 3.36x to 3.49x this quarter, a minor increase that does not represent a trend. Our focus, once again, is on resolving our capital structure with the divestment of assets advancing very quickly and new initiatives that could result in important activities besides the increased operational results that we have. Going on to Slide 8, you see our indebtedness profile. We observed that we have a high level of cash despite the fact that we have reduced our debt. You can also see that the main maturity terms are for banking debt where CSN has been able to manage this properly. When we look forward in 2028, we have just addressed this with an adherence of 77% of shares sold. We're carrying out all efforts to lengthen our maturity terms to have a more structured payment of debt and to allow for the growth of our operational results. On Slide 9, you can see the pro forma of our new structure for debt. The expectation is that in a short time, CSN will become ever lighter, not only to be able to face future maturities, but also to enable several new projects that will completely transform the potential for cash generation of the group. With this, we conclude the analysis of consolidated results, and we go on to Slide 11, where we show you the results of our steel segment. You see the results of our commercial area with a growth of 17% in sales for the quarter, driven by the domestic market and the foreign market as well. In the domestic market, we have the first effects of the antidumping regulation with better initiatives for local producers. The result was an annual growth of 10% in the domestic market with a mix improvement in all of the markets we are present in. In the foreign market, we had the highest volume since the first quarter 2023 with the consumption of steel recovering in Europe and United States also increasing its imports. When we look at the following slide of production, we see the impact of the shutdown of one of the blast furnaces and the reduction of stock in the Vargas plant. To the right, you see a slight increase in the plate because of the cost of energy and raw material during the period. Despite this momentary pressure, we have a significant growth in the performance per ton with a consistent evolution in the market. This becomes even clearer when we go on to the financial performance of steel on Slide 13. In the graph to the left, we see an increase in net revenue and average price for the period. We have an intense commercial rhythm that has been recorded and the resumption of activities abroad and a more favorable dynamic of prices in Brazil after the readjustment that we put in place in April. Going to the graph to the right, you can see a strong recovery of EBITDA during the period with profitability back to double digits. The most difficult phase of these times is something we have left behind us. We still have a great deal of efficiency and value to add to the steel segment. The results of this quarter point to a sustainable recovery for steel and for the entire group. Let's now go on to the mining segment. On Slide 15, we see the result of production and sales. In the production graph, we see the effects of the 15 days of shutdown: with a lower volume of sales, we had a drop of 5.5%. On the other hand, when we look at the quarterly growth, this positive seasonality of the drier period offset the days in which production came to a standstill. We see a stronger pace of sales with the company recording the fourth best result in history, even with the 15 days of shutdown, showing the robustness and efficiency of the logistics infrastructure of the company. The result also shows the efforts deployed to recover the inventories of iron ore. Regarding the financial performance on Slide 16, despite the solid sales volume and iron ore prices remaining high, net revenue was impacted by foreign exchange appreciation and higher freight rates pressured by geopolitical tensions between United States and Iran. Unit revenue was $18 per ton, which was approximately 20% less than the first quarter of 2026 and below that recorded for the same quarter last year. Regarding EBITDA in the graph to the right, we see that this drop occurred in a period marked by operational excellence, showing the impact of logistics and exchange rate in this segment. Despite the results in this quarter, even in a quarter marked by logistic costs and foreign pressure, the company's profitability remained resilient with an EBITDA margin above 30%. In the following slide, we see the adjusted EBITDA in the second quarter of 2026 compared to the previous quarter. We see a clear and direct impact of maritime freight during the period and the effect of exchange rate in the iron ore. On the other hand, we had better volumes and costs, helping us to attenuate these effects. Let's go on to analyze the cement segment. On Slide 19, we see the sales volume. Here, we see a more timid commercial activity due to the scheduled maintenance events in several of the plants during this period. The strategy continues to prioritize value over volume. There was a market dynamic that was favorable in the cement market without having to enter a price war. We continue to see resilient demand and the focus is to have sustainable performance for the operation. In the next slide, we see the financial performance with a growth of revenue of 14% in quarter-on-quarter comparison and 10% compared to the second quarter of 2025. This shows the readjustments put in force in the last months and a more favorable market. On the part of EBITDA, we are very satisfied to announce a second consecutive record going beyond BRL 420 million and a margin of more than 30%. All of this profitability shows the positive moment begun by the operation and the ability to make an asset profitable despite price pressure. We see an operation that is ever more competitive, and we can see the competitive edge of CSN cement that has more streamlined plants and a very efficient management. We go on to analyze the logistics segment on Slide 22. We can see in terms of net revenue that the quarterly growth is due to the drier period and the transport of merchandise. Everything was driven by the subsegments of the multimodal segment. We had an increase of 3.1%. This is an evolution we have observed in the last quarter besides the synergies captured in the multimodal segment. To the right, we see that this was the second highest result of the segment, advancing in terms of efficiency and cost control, maintaining profitability at a very sound level above 45%, showing the operational resiliency of this process. Finally, on Slide 24, we see the financial performance of the energy segment. There was a performance in EBITDA and net revenue. There was an extraordinary effect in the period because of the retroactive recognition of revenue from the Jacuí Hydroelectric Power Plant that had been contingent on the balance sheet since October 2025. The expectation going forward is to have ever more stable results in coming quarters. With that, I would like to end the presentation on the segments, and I invite Helena Guerra to present the ESG highlights.
Good morning, everybody. I will begin by showing that we repeat advances in our ESG agenda. This, of course, is part of our strategy. We're improving in risk management and value generation. We treat ESG as a set of initiatives that have to undergo operational improvement, overcome regulatory risk and contribute to the long-term competitiveness of our company. The results for this quarter reinforce this position. In governance, we had an important evolution in terms of our market ratings. The FTSE rating went from 3.7 to 4.2. CSN and CMIN also had consecutive increases in the quarter. CSN and CMIN were awarded Industry Leader status in Sustainalytics' ESG Risk Rating and EcoVadis evolved from 74 to 80 points. With one additional point, we will be part of the gold category. So this shows the excellence of our management and the transparency of our controls and everything we do to mitigate regulatory risks. In terms of operational risks, we continue to move forward in our dam management. We had two recognitions by competent agencies in terms of the characterization of the Lagarto Dam and the B2A Dam. All dams have the Declaration of Conformity and Operability. In environmental management, we have complied with all of the obligations foreseen in this instrument. This, thanks to the millions of reais invested in improving the environmental conditions of our plants. The expectation is that we will be awarded with operational efficiency. We continue to make positive moves in social and diversity: an increase in female representation in the workforce, an increase in female representation in leadership positions, and we're preparing for regulatory systems that are ever more stringent. We have also published the 2025 Impact Report of the CSN Foundation with investments of more than BRL 48 million in social development helping thousands of youngsters throughout Brazil. So we're presenting consistent results and actions, which is our aim. We want to continue to ensure that risks do not materialize. Everything we do according to this agenda will translate into efficiency, improvement of our competitiveness and the generation of sustainable value for our company. I will now return the floor to Marco.
I will give the floor to our CEO, Mr. Benjamin Steinbruch, for his remarks at this point.
A good day to all of you. Welcome to the earnings call for CSN. I would like to quickly review the main points of each of our segments. Regarding steel, we have the initial positive impact showing a strong reduction in the volume of imported material, thanks to the antidumping regulation. In truth, this is the first time that we felt this benefit, not having that unfair competition that comes from Asian products with a negative impact on the market. Not only for the steel industry, but in all industries that are set up in Brazil, it is basically impossible to compete with Asian imports. It's up to all of us to react strongly against this so that we can protect new investments and protect our production and protect employment, which is of greater importance here. So we need to strongly continue with that antidumping policy, ensuring that they don't compete unfairly in the Brazilian market. We had an improvement in the competitive environment, resulting in a strong growth of more than 10% in the domestic market with room for a recovery of prices. This also holds true for the foreign market. We have significant evolution with a higher consumption of steel in Europe. Sales increased 36% year-on-year, and this is the company's best result since the first quarter of 2023, driven by the results of Germany, Portugal, Spain and of course the United States. The first signs of recovery in profitability with margins going beyond double digits: 10.5% for the second quarter. The expectation is for a stronger second half of the year, a maintenance of favorable volumes and prices as well. We are increasing production and the idea is to have a price increase as well. This will allow us to be more competitive and advance in product diversification. We're active in practically all segments of the economy. This allows CSN to have a differentiated capacity and a better expectation for the second half of the year in steel. Regarding cement, we continue with strong demand driven basically by Minha Casa, Minha Vida projects and some infrastructure projects. This favorable scenario has also allowed for a cost recovery in the last month despite exchange rate and freight increases that have a strong impact on cost. The strategy is to prioritize value over volume, and it is a very assertive strategy. We have been able to make the operation profitable. This was a second EBITDA record, a consecutive record this quarter, showing the strength of the operation with streamlined plants, integrated management and a very efficient commercial strategy. The outlook for results is even better in the second half of the year with the evolution of price and volume. We're rigorously delivering what we committed to do at the beginning of the year. We had an evolution in net revenue, margin and EBITDA. We're working full steam, and we simply did not have a better performance in the second quarter because of an unscheduled maintenance in June that limited us somewhat. Otherwise, this would have been a more exceptional quarter because of the recovery that we observed vis-à-vis previous years quarter-on-quarter. In the last 12 months, we are complying with our targets and presenting better figures quarter after quarter, and we do believe we will continue this way until the end of the year. In logistics, that has become a very important segment for us. It was the second best EBITDA in history recorded this quarter because of the dry period and an increase in the cargo transported. The strength of our assets is the best differential to capture synergies of the last acquisition we just carried out. Cement has been improving quarter-on-quarter, and we believe that logistics will follow suit in this improvement. It has been performing better quarter after quarter. In energy, we had record results and an extraordinary effect, the recognition of retroactive revenues from the Jacuí Hydropower Plant. Those values had been in contingency since October 2025. Regardless of this result, the segment continues to be strategic for the group, guaranteeing high production with high profit for the group and very predictable revenue. In consolidated terms, we have a growth of 5% EBITDA for the quarter and for the year. This points to the strength of the operation in a period of strong pressure because of freight and raw material. It shows the benefit of having a diversified operation and a robust asset portfolio. In terms of sales, we see the excellent commercial environment during the period, not only for sales, but also for production. If you analyze all of our activities, they had improvement in volume, in net revenue and an improvement in margin. We're working strongly on the operational part and expect a very strong second half of the year in all of our assets. We will continue to increase production, increase sales and, with this, have better profitability, always maintaining margins or improving them. This is a goal that we set forth of creating value even with a one-time reduction of delivery in some of the markets. The release of working capital shows the evolution of the project to reduce our level of inventory. We're working strongly on this. At the beginning of the year, we wanted to reduce our inventory from BRL 3 billion to BRL 1 billion. We're very close to that reduction. We think we can do this in the second half of the year, reducing raw material, spare parts, and finished and in-process products as well. Our effort is geared to this improvement in operational performance. I would like you to analyze each of the segments to see the considerable improvement that we present in quantitative terms and profitability and the work carried out in the reduction of working capital to enhance the company's cash. To conclude, we were very successful in the change complying with the request of our creditors to show this movement of part of our debt, rolling the rest of the debt. We continue with this process of selling our assets: the cement asset very clearly following the schedule that was set forth in March. We are now receiving binding offers that will be analyzed and debated to ensure an expeditious movement and the minority sale of logistics; we have nonbinding proposals in a number much higher than we had expected due to the quality and the moment that these assets are in. I do believe this will be a very successful project. We're deploying enormous efforts. I would like to thank all of our employees because of the challenges that we have set forth not only in production, but also in sales and in profitability. If you analyze each of these: mining quarter-on-quarter achieving records; cement every quarter also attaining records; logistics, infrastructure and energy with their own records; and finally steel, this result of the second quarter with a general improvement in figures — thank you to those working at the steel plant, enabling us to have this strong improvement in the second quarter. This is what I wanted to share with you. Thank you all. I return the floor to Marco Rabello.
Well, thank you, Benjamin. We will now go on to our Q&A session.
分析師問答
The first question is from Daniel Sasson from Itaú BBA. taining records; logistics, infrastructure and energy with their own records; and finally steel, this result of the second quarter with a general improvement in figures — thank you to those working at the steel plant, enabling us to have this strong improvement in the second quarter. This is what I wanted to share with you. Thank you all. I return the floor to Marco Rabello. Antonio Marco Rabello, Investor Relations Executive Officer. Well, thank you, Benjamin. We will now go on to our Q&A session.
My question is for Martinez in steel. Martinez, we have seen the company margin going back to double digit, a benefit in the drop of imports thanks to the antidumping regulation. Mr. Steinbruch spoke about the importance of these protectionist measures. Which part of this is a structural recovery of market share, which would be a sustainable margin for the steel business if the imported volumes stabilize at present-day levels? What is your vision for the second half of the year; will this margin further improve? My second question refers to the capital structure, if you can give us further details in the negotiation for the cement plant. You have received binding offers and from three different groups according to the news. Which are the next steps? Of course, without revealing the value of the offers, are they very close to what you think the asset is worth? Are you considering the sale of 100% of the cement unit or only selling control and keeping a minority share in the asset? So if you could comment on this path towards deleveraging in the future, what comes from operational cash or the divestment of assets?
Daniel, you will recall that in the first quarter call, I mentioned that I was seeing signs of transition from imported material to domestic production, the search for added value and that we were foreseeing a significant improvement for the second quarter. What happened in the second quarter? We speak a great deal about value over volume. In our case here, it was value and volume. We grew 11% in the slab market or flat steel market for the domestic market, a growth in higher added-value products and the price still has room for recovery. We had an increase of approximately 4% in average price. To give you an idea, if you look at the BQ product, a product that in our portfolio is not the main one in terms of margin, it has a gross margin of BRL 400 per ton; when we go to higher added-value products — pre-painted products — we have margins varying between BRL 1,000 to BRL 1,200 to more than BRL 2,000 in tinplate. So we have all of these choices in our portfolio. This is an important data that we captured in the second quarter regarding imports to give you more color to what Benjamin said. Imports last year, we ended the year with an import volume of 2.5 million tons for a 16 million ton market. This year, until June, we had practically 1.8 million tons with a trend towards reduction, which means practically 600,000 tons migrating to the domestic market. Of that 600,000, 70% belong to CSN. The material we produce serves civil construction, white goods and distribution. In the call in the first quarter, I said we would recover from the market about 1.5 million to 2 million tons for the domestic market this year. That's effectively a given already. This means that import penetration should be around 15% to 17%. This reinforces our strategy. From the viewpoint of demand, although we have observed negative comments in the market, we have a relative balance across several sectors, helping CSN offset cyclical weakness in any one sector. For example, if you only look at the agricultural market, there is a temporary drop; it may resume. The white goods market is relatively stable. The automotive assembly market, despite imported vehicles, had a 10% growth in production. And civil construction has proven to be very resilient despite interest rates. This is something very peculiar to Brazil. Brazil has learned to operate with high inflation and interest rates and continues to grow. So the main challenges for the third quarter for steel are, first, operational excellence. Our business is moved by cost, and we're heading to get to a slab cost of BRL 3,000 to BRL 3,100 per ton. In our day-to-day, this is our mantra to seek out this cost. Otherwise, we're out of the international market, and it will be very difficult to compete. Regarding margin recoveries, from the first quarter we went from 7% to 11% in the second quarter, and we are working in a scenario of reaching 15% to 17% in the second half of the year. By recovering volume and margins, we can reduce some discounts, and align some prices by perhaps 5% to 7% in September. This would help a great deal in recovering higher double-digit margins. Another point mentioned by Benjamin and Marco is the inventory reduction. We want 500,000 tons of inventory in-house. This is very important for our cash flow. Finally, we want to capture 600,000 to 700,000 more tons that will migrate from imports to the domestic market. This is a scenario we are working with. Regarding variables not under our control, the antidumping measures: we obtained practically everything we requested. We are still missing some coverage for hot rolled from China; we had meetings this week and next week, and we want to include antidumping against Chinese product in August or September, which would be fundamental for us in other products such as tinplate, which is something very relevant for CSN. Antidumping has been detected, for example, against Germany, the Netherlands and Japan in certain cases, and margins moved from $300 to $600, and we're not even speaking about China. We also hope to implement antidumping where appropriate. In CSN, we will be highly competitive because of this. Obviously, the government has to be more attentive. It's not only a problem of steel. As Benjamin mentioned, the problem is for all upstream supply chains and for other Chinese products. The automotive market, white goods and machines are examples. Vietnam and Korea have been sources of material and we are monitoring whether some shipments could be circumvention. We are working with the authorities on this. What we can create in Brazil is a technical barrier where appropriate. So Daniel, I'm at your disposal should you need more detail. This is a scenario we imagine for the third quarter: optimistic, but very realistic in terms of what is happening in Brazil.
Daniel, regarding your next question about the cement sale: Yes, we did have a material fact this week stating that we received the binding proposals for the sale of cement. Obviously, the media conveys a great deal of information. It's very difficult to manage media commentary, but to benefit this competitive process where we hope to get the very best to benefit the company and the creditors, we cannot share too many details with you at this time. This is a competitive bidding process. Once we have identified who will be the buyer and which is the final value and the conditions agreed upon, we will be able to disclose this. We're still not at that point to inform anything precise to the market. We do have regulatory restrictions, but as soon as we have precise information, we will inform the entire market in a uniform way. What we can comment on is the excellent performance that cement has delivered this year: two excellent quarters with record EBITDA despite maintenance. It's a unique asset, and we think we will have the valuation it deserves to carry out this operation that will be very important for the group's deleveraging. A broader question about deleveraging going forward: to recall what we said at the beginning of the year, our deleveraging plan is proceeding on the schedule that we approved. We're following it very closely across all of our assets and in infra logistics as well. CSN has many valuable assets. Some are noncore, but they are also valuable and could be sold if the Board decides. But the most important path of deleveraging is to continue to have good sales and to focus on operational performance and cash generation. Martinez has just given us important information on the recovery we see in the steel market as well. Operational improvements and cash generation are key. Cement and steel are the two segments that can deliver significant cash flow. It's important to mention that in cement we are seeing average prices of BRL 75 to BRL 80 per bag for the first time versus past levels; in FOB terms we are at roughly BRL 360 to BRL 380, which shows a strong recovery in prices. With operational excellence and our distribution network — 24 distribution centers and a large customer base — we are well positioned. Civil construction has proven resilient to interest rates. Real estate funding has increased and new home sales are strong; launches have decreased somewhat, but we expect the market to remain active. When we speak about results, cement is delivering margins of 30% to 32%, roughly double that of our main competitor in the domestic market. This motivates our teams and supports the Company’s deleveraging prospects.
The next question comes from Marcio Farid from Goldman Sachs.
Martinez, you have spoken a great deal already, but I'm asking for a follow-up. We have seen significant imports coming from Vietnam, hot coils. Simply to try to understand, is this a one-off movement or another circumvention? Does this concern you, and what will happen in the second half of the year? To follow up on liability management, the focus presently is on cement. You briefly remarked on infrastructure. Will the speed to continue the sale of assets be reduced? Let's imagine you sell off the cement operation and you roll the 2028 bonds. Are you thinking of doing anything additional, or will you have to continue to divest other assets in the group?
Thank you for the question, Marcio. The main point in terms of imports is something that does concern us. It has been a struggle over the past three years to work against illegal or unfair imports. Obviously, we cannot compete with that dynamic. To give you an idea, China has a very large installed base and production footprint; many plants worldwide run with thin margins. With the closure of quotas that Europe put into practice by 50%, Chinese product that would have gone to Europe can find alternative outlets, and Brazil can become a destination. We therefore must defend the domestic market not only against China but against Asian imports as a whole. In 2025, Vietnam was a large receiver of Chinese material and then re-exported/processed volumes; it exported 7.2 million tons. We are very cautious because part of this material can be circumvention. There are cases of NCM misclassification and other forms of trade circumvention that we are actively combating with authorities. The government could be faster, but they are attentive, because this compromises employment across several industries. Regarding Vietnam specifically, we are engaging to have measures approved where appropriate. From a market balance standpoint, inventory of imported material that exists in the global fleet has fallen: the ships in queue that we monitor fell from 700,000–800,000 to around 110,000. So part of the volume in the market will be sold domestically. Vietnam and Korea are not as low-cost as China in many cases, so we can compete. The only Chinese product that remains price-feasible in Brazil is some BQ. In September, we expect antidumping actions to include additional Asian materials. If we secure that, we can be quite competitive. Finally, we are increasing production at our Paraná plant by 15% to 20% in higher added-value products: pre-painted and galvanized products. The lines in Rio de Janeiro — GalvaSud and others — are working with interesting order backlogs. So we have a constructive scenario based on fact-driven actions for the third quarter.
Marcio, regarding your second question about liability management, an important change is that we have extended maturities and reduced pressure on near-term maturities. We moved roughly $1 billion of maturities forward in term — that is, we have extended maturities which reduces pressure for the company and creditors. This was part of our plan to manage liabilities. The urgency to sell assets does not change: the schedule for cement and infrastructure are two parallel projects we are actively working on. We disclosed the cement material fact and expect to receive nonbinding proposals for infrastructure by the end of this month. We have strong interest from many parties for these assets. We continue to evaluate other deleveraging alternatives, but the main focus remains on improving operational performance and cash generation. CSN has valuable high-return projects — iron ore P15 expansion, infrastructure and ports — and the capital structure is being addressed. The speed of execution will continue as planned.
The next question comes from Matheus Moreira from Bradesco BBI.
I have two questions. One on cash generation: we saw a strong release of working capital, about BRL 900 million approximately, helping you offset CapEx and higher financial expenses. A part of this gain came from the reduction of inventory at CMIN. Marco and Benjamin mentioned you are working on reducing inventory in coming quarters. Can you quantify what we can expect? Should we expect further releases of working capital in coming quarters? Second, on cash generation: we have seen more challenging conditions in the iron ore market, with prices below $100 and seaborne freight around $35 coming from China. If you're hoping to have an improvement in operational cash in coming quarters, will CMIN cash generation be more pressured because of iron ore prices and freight? Are you assessing other alternatives to monetize assets besides what has been contemplated originally, such as the sale of control of cement and a minority sale in infrastructure?
Matheus, thank you. Regarding cash generation, the release of cash through working capital reduction and cost improvements took place mostly in steel and also in mining. In steel, most inventory reductions were concentrated in Volta Redonda, Brazil; that was the main driver for inventory reduction and released cash flow. Martinez mentioned this. We have a forecast of releasing more cash through inventory reduction in the coming quarters. Several companies in the sector hold inventory levels above what is adequate; we are bringing them down to more efficient levels. We estimate an additional BRL 1 billion of cash release until the end of the year if we meet our goals. This is not only finished goods: reductions are projected in raw material, intermediate goods and maintenance inventories as well. We have a company-by-company plan with weekly follow-up. Regarding mining: yes, we had an impact in the second quarter, but we expect an improvement in the third quarter. We will no longer have the scheduled shutdowns at Casa de Pedra and others, and seasonality (drier weather) helps logistics. The exchange rate has improved compared to previous weeks and freight is under active management by our team; we are trying to reduce pressures from geopolitical tensions. We see a better third quarter for mining in terms of results and cash flow. Regarding further sales of assets: CSN has many valuable assets. Noncore assets include some real estate outside Brazil that are profitable but not strategic. If the Board decides, we may sell additional assets to accelerate deleveraging. However, we remain very focused on the processes underway now: cement and infrastructure. If we decide to sell more assets, the market will be duly informed. Our commitment to deleveraging is total and permanent.
Our next question comes from Gabriel Barra from Citi.
Two points. One, leaving aside allocation and steel, last quarter there was a discussion on cost per ton in the steel mill. One of the points discussed last quarter was a cost closer to BRL 3,000 per ton that ended up being higher this quarter for several reasons. I'd like to understand your view on the trajectory of that cost for the second half of the year. Where should that cost stabilize? That would help us understand how sustainable the margin will be for the second half. Second, capital allocation and liability management: do you have greater comfort in terms of short-term liquidity? How do you look upon the remaining bridge loan funds going forward? Will you use the full amount? Will you wait for the sale of the cement asset? Might you buy back some bonds? How do you intend to use that liquidity given present interest rates?
Gabriel, regarding cost and operational excellence: if we look at the KPIs, slab costs would be very close to fixed costs excluding raw material. If raw material, coke and coal prices had remained constant, the cost would be close to BRL 3,100–BRL 3,150 per ton. More importantly now is to maintain full control over the operation — operational excellence. We have no control over commodity prices, and raw material increased in the second quarter. We have to offset this by increasing prices. To reach the 15%–17% margin range, we will need further price increases. Regarding costs, we have internal projects improving sintering and primary metal production; all are being analyzed to lower consumption, reduce energy use, and continue to reduce costs despite raw material pressure in the third quarter. We should see a decrease in some raw material costs; iron ore prices, for example, may trend toward USD 510–USD 515 per ton in some scenarios. More important than all of this is operational control in our best production lines and industrial locations. This will allow us to reach higher double-digit margins relatively quickly. Another point is imports: if import penetration drops to 15%–16%, and we improve mix toward high-value products like tinplate, results can be magnified by product mix. We're confident in the pillars we're working on.
Gabriel, regarding capital allocation and the bridge loan: we have an important initiative to manage debt in 2026 and 2027. We have remaining resources from the bridge loan, and we will manage them prudently. At times we have used them to buy bonds and debentures on the secondary market. In the recent exchange transaction, a portion of cash used was to buy back bonds; we bought a significant part of certain bonds and used them in that operation. Going forward, the use of remaining bridge loan funds will depend on negotiations to roll the rest of the bank debt. We are engaged in productive discussions with banks and expect to extend maturities. The greater focus will be on deleveraging through the asset sales we announced. That will transform our leverage profile and help repay the bridge loan. We want to further decrease average cost of debt; the 2030 bond and bridge loan are outside the curve we would like to achieve, so our aim is to rationalize these through restructuring and asset sales.
The next question comes from Nicholas from Jefferies.
Congratulations for the results and recent operations in the capital markets, the bridge loan exchange and 2030 issuance. Can you give us additional color on rolling your bank debt in 2026 and 2028? Will you push maturities to 2029, and which are your conversations in this last phase? Any recent update on the P15 project, the remaining CapEx to disburse and any change in your EBITDA plan for this project that will be finished at the end of 2027?
Nicholas, regarding rolling bank debt: even in prior months when maturities were closer, we were able to roll bank debt naturally. With the exchange we just carried out, we extended term: we moved about $1 billion of maturities away from early 2028, which allows us to have a new plan to discuss longer rolling periods for bank debt. We have received significant support from our main creditors. We will continue discussions on maturity extension. Regarding P15: as mentioned in the CMIN disclosures, the goal is to deliver P15 by the end of 2027 with ramp-up in 2028 and full operation in 2029. We are still missing BRL 4 billion in CapEx to complete the plant. The plant is being funded by a long-term credit line.
Our next question is in writing from Mr. Julian: The loan related to cement was taken until June. Are there any undrawn installments that could be disbursed in the third quarter to fund the exchange offer with the conclusion of exchange of securities? Should we expect greater facility in rolling the remaining bank debt until 2029? A third question: when answering Gabriel, you mentioned you bought back bonds maturing in 2028 that are part of the exchange operation. Could you inform us of the amount and whether you will cancel those bought-back bonds?
Julian, thank you. Regarding the bridge loan: yes, we drew the full facility in the previous quarter, but not all resources have been used. The remaining funds are reserved to pay or buy back debt; they are not earmarked for general capex. On the exchange and rolling: we are in a new phase to negotiate longer maturities with banks. The exchange deal was an important condition to gain creditor support. We successfully rolled more than $1 billion out of early 2028 maturities. Regarding repurchases: during the exchange operation we repurchased certain securities in the market. Those purchases are not material in aggregate and will be cancelled in the coming week.
The next question is in writing from Mr. Bruno: Regarding the management of working capital, there is a relevant reduction in accounts payable with drawee risk. Does this reduction reflect a decision to optimize the financial cost of the debt because of present-day rates? What are the normative levels you project for coming quarters — will they be closer to the second quarter 2026 level of BRL 1.5 billion or a recomposition to the levels of 2025 at BRL 2.9 billion?
Bruno, thank you. The reduction in accounts payable and drawee risk has several drivers. One is supplier mix and renegotiations over time. The company has made an effort to optimize financing costs across operations: drawee risk, prepayments for iron ore, and other working capital items. As you observed this quarter, we amortized a significant portion of prepayment obligations for iron ore to reduce financial expenses, which brought our net drawee-risk exposure closer to the level we presented this quarter. We will continue to manage these exposures actively in line with market rates and our deleveraging plan.
The next question is from Alberto: Would it be possible to know the share of infrastructure that you will sell off, 30% or 40%?
Alberto, thank you. We are enthusiastic about this asset: there is a great deal of value and the results are very resilient and attractive. The discussion is currently between 20% to 30% for the minority sale, as we had previously commented. This will depend on the structure of the new vehicle and the proposals we receive by the end of the month. We expect the percentage will not be lower than 20% and not higher than 30% at this point in time.
We have no further questions. I would like to return the floor to Marco Rabello, Executive Director of Finance.
Thank you all very much. On behalf of the company Board and our Chairman, I would like to thank the members of CSN that have contributed to CSN going beyond their jobs. Thank you all for your attendance at our call. Thus, we end the earnings call for the second quarter 2026. Thank you very much.
The earnings results call for CSN ends here. We wish you all a very good day. Statements in English on this transcript were spoken by an interpreter present on the live call.