SID - Earnings call transcript Q3 2021 | Companhia Siderúrgica Nacional

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Operator

Good morning, ladies and gentlemen, and thank you for holding. At this time we would like to welcome everyone to CSN's Conference Call to present the Results for the Third Quarter 2021. Today, we have with us the company's executive officers. We would like to inform you that this event is being recorded and all participants will be in listen-only mode during the company presentation. After the company's remarks are over, there will be a question-and-answer session at which time further instructions will be given. simultaneous website, may presentation ri.csn.com.br, available. have CSN's accessed is We Relations Investor where Instructions] webcast be that through also [Operator the slide replay soon be one The event closing week. the for available this of after will

can convenience. at flip through You slides your the

would assumptions state that herein, we these the management and statements opinions the some based trends events to not expectations constitute do materially they and expressed mere of as are or like from may on proceeding, of forward-looking Before herein the those differ current company's projections.

basis. and those measures events such In or rescheduling as by in or results, countries, factors present the periods. U.S., general global, you protectionist Ribeiro, economic a and debt regional exchange performance of Brazil Ribeiro, fact, in Brazil Marcelo will prepayment Mr. Executive rates statements regulations general as actual and Investor national for highlights financial floor. may in and operating the rate or will Mr. have countries, Cunha differ other forward-looking levels, in foreign Relations competitive Officer, factors, a at materially over the laws currencies, from to I who other conditions expressed future result denominated now the and and changes several or of the conference and turn implied interest

Marcelo Cunha Ribeiro

us for Hi, call third you CSN. good of morning of in this conference joining all thank you and the quarter to for

helping of historically that and of ore maintain we our impacting terms sudden the generation first showing here and Slide Elizabeth The a assets. offset our – But in at model. the strong, with And of a of are working on quarter. We showed drop very with we EBITDA answers. and the in Cash period due XX% was see to underscore third leverage our to Martinez questions levels, to the BRLX.X CSN results. We're drop allocation, on sustainability mining. integrated cement growth, go all, the should balance from iron BRLX.X to period, in this significantly in result results the Rabelo and of LafargeHolcim number of about Mr. on X, is negative of our highlights to capital uninterrupted Luis in nature the we enabled highlights prices, diversification, payment. the Once business in steel and quarters invested now trough variation in this that prices. negative to low this have interrupted what resiliency and go in We important mining is but went integration Cimentos we had of and the this us. million ore excellent seven prices of speak Based its in you'll growth then non-recurrent of to the iron us again going and

be very We in BRLX.X the will company. the prices the quarter, the first results explore floating of quarter, similar the provisional the recurrent levels is to during previous without the of is would the for with the this a non- during a presentation. mining recurrent billion, loads impact that figure result which EBITDA the

of the We evolution will our about now investment. speak

the perhaps maintained coke next an year. quality. at the to is with continue XX the the And this CSN will mining broad Our with to in annual in going our future coming CapEx we Day in And up days. on centering that expectations billion, level, ending in speeding at investment present that projects repairs our expectations expectation investments We're enhance increased be in line the and we CapEx still of our and of is have material. CapEx BRLX steel,

evolution accounts significant steel in payable due volumes BRLX by receivable. generation for nor capital, to but We and of in terms cash to in want working Stocks neither billion, commercial is our important which force In had offset quarter, was a in in stocks increases fully production. accounts the represent mining, of did our we strategy. this not this

can capital, deleveraging expected. our This the due results cash. we levels, at of we maintain billion financial in great determinant with to of what that of before We second, in page, on had deal And our our was this are helped of the below X.X working times in aligned you the best in high debt X.XX because see no the next was capital this net So, working there impact guidance and the a cashflow, that continues we quarter And that working history. period, to attained for evolution BLRX capital that see what as was with is deleveraging. makeup, EBITDA foreseen. to

acquisition Our debt generation because our of of and factors of exchange and yes, of Elizabeth but positive, payment but of dividends all rate. net was broadly has is not via the purchase because grown, the cash these our Despite below indebtedness that the limit. of shares the

billion. or our conservative event We bond On our the reduction class. on our the debt level our will debt. we we And billion, We again how coverage, allocation had billion, maintain credit And BRLXX maintain quarter, investment capital continue leverage the of record we of had debt, BRLX for of once the term payment levels in metrics a net average liquidity. our page, strengthening for the ratings towards that we're policy way. perpetual almost that you is very path the a to of maintaining cash next this in had BRLXX quite the of but a manage quarter that an see second reduce we comfortable with

in Cash the make investment goal foreign for the short institutional and increase, use quarter, This infrastructure, will attain in to less issued a of debenture will strategy market. is have reals a what and generation CSN. mining new balance exposed this in Now, capital we a important domestic to is term to have at is sheet, next a we in But we announced debenture the currency. grade. then

that We will on reflects with about of steel, businesses volumes. commercial speak had clear our beginning each we strategy a where the very

of essential quarters taking We levels pandemic. in finished market. in hesitation demand some We after was of advantage X.X have the felt in the excellent We market. And forcing in stock, margin. million to the market. maintain the we product the maintain done tons we XX% hesitated and the last of increased which average of in more helping EBITDA us that record evolution prices, in should had our the profitability. average billion have In that XX% We BRLX.X price foreign this an quarter

was caused by quarter delay the of interruptions the the quarter. seasonality a These the is by but in release us that Europe, maintenance in fourth States. pandemic specifically quarter volumes This impacted will there positively ports in help are in in of Germany, also United

for a had Regarding of very And very a with contributed contained the as change tons more at strategy, had when plant the had expected And of stocks is mining. production to our at were over prices We beginning. us truly unit whether but This our to volatility avoided were And quarter-on-quarter, enabled the it but million we ideal, quarter, efficient best of the in behavior end and had we quarter it the reach the was we of as unique of the comes steel, we We than commercial had to for their good. the price deemed of a lab best costs. increases. own and despite operations production our XX closing more lower. price of quarter coke recovery we three years why last increases, that growing good mining history we of what XX% variation in production that the to this coal, increased had our more go volumes $XXX. levels where all on sales, this because about be below to

great However, freight next they results impacted going in aspect, evolution realization of a quarter costs. which XX the a price quite be was The that the bedding is was effect this in by rapid different to will quarter.

effect, We where had in non-recurring We very are capacity more we go the generate back quarter quarter. That impacted the effect, than positions, floating gone is third would normal excellent had effects non-recurring separate this We more effect that when able you articles loads. an average effects next and of price volumes the $XX. showing redundant. had results. that of provisional the the see is due you $XXX and to price X% a without a quarter quarter, second quarters. to to are were this we and prices both with somewhat records to X.X billion have trap up grow say of with expressive ended the but this to previous In This prices high for to mining we and just for the that on segment have We page, and quarter is load. sales highs can the

to as enthusiastic of Elizabeth results. we but surprises course, by a plant with and the after our increase of acquisition is the these It were record. nonrecurring we for volumes, referring price to of have acquisition, proves market the EBITDA of integration We stability to well. with that pressure, our base we integration one non-recurring this the domestic is coal, had growth coke we able price of makes the our and ambitious and due to. we If us will very impacted pleasant less, quarter-on-quarter the comparison fuel, kept very cost costs, effects, and increase strong of own consider realization, very the Final And this and quarter, Holcim message EBITDA Elizabeth. but refer thesis

step We're in also to happened announced because this reduce cost electrolysis. one commercial in this Inova. optimistic invested to Holcim. investments that like very filing capital update we which what this about to have and update optimistic the of and our held call promising a footprint. highly CSN we Lafarge towards took This capital Energy added we specializes made our in value through The preliminary we most this the what ESG. we has de-carbonization a value and market. technology efficient should green had proves ability Elizabeth create approval is we're will hydrogen quarter capacity We come an of And and innovation speak speak We going while soon. very is an to that force technology would And our we into that priorities, Inova of disciplined announcement a that to transaction. with production of management SX with carbon acquisition is company focus. the the each CSN refer important Now that We and see important conference a the quite allocation, communicated of efficient our and we're to company a as quickly about innovative with And allocation. strategic of through is

of evolution Finally, terms less a periodically great would like market. the we important to not deal and to in of we innovation, this have report

parts In efforts terms transparency, to global of adhere we deployed to indices. and have several

We Index have BX e ACT. FTSEXGOOD and ICOX, the TCFD,

We’re going decarbonization. at and to this CSN more discuss announcing day ambitious even goals for our the large

water we of reduce sledge In to of production use to terms goes in the of management, the that production continue – environmental reduce of steel, landfills. the

stability to dams that the work of discussed terms is corroborated way mining have In hope dam a stabilization. see continuity with to only XXX% which the stability our create dams, being shows steel certificate our the texted is It dam. have and has stabilization certificate. of to us at And agency accelerate national the coal soon. a the they and used best decharacterization we we Vigia very strategy, works And our in the stability of and a

path shows In increasing that award difference make terms of and and on of award diversity. part right the us the we’re diversity important a social

can on increase in conclude accidents. and the reduction and an female to and we a of presentation With increase this, would go PCD have the like answers. questions We in rate continuous I XX% participation in to now

Operator

you. Thank

will on Sasson question-and-answer from the now Instructions] is We first session. Our from go Daniel to Itau question [Operator BBA.

Daniel Sasson

question. taking to Good realization your first question morning in and you, to mining. refers price of thank my My you for all

was volumes in towards these the have the the If that a prices about look to curve you potential fourth these with third think to prices quarter, work used lower business. with in us provisional small averages the of quarter, could of and zero, be quarter future provisional you do to it’s help in prices price to the the very second fourth on think quarter. impact weeks. My the question coming the think reasonable third cement on practically the refers the will And depending that impact

assets? could you will timing referring filing when these You consolidate that If you you gave Thank best have in XXXX an the share the just be us seat. you cement out of expectation Do to have update a you much. very us you with guess carried your and mentioned expectation with to that capture a whole presentation market these able a for in synergies to CADE.

Benjamin Steinbruch

Daniel. the results price Well, of of thank it at these the you right. for quarter, quarter and And floating comes third impact the of questions, loads the to evolution fourth when the the on you're the end

are average The the important part those open gone present of has we At to through very the volumes. of the of prices end and quarter third of the lower volumes have these similar day prices, quarter.

will lower. So be the impact

Cement. answer. are, to you Now, than me I Edvaldo, quarter. it will $XX a that impact the was if to impact less non-recurrent in we would the million. the fraction the third this was they of of ask, with to be prices remain help in as hope show like And terms It's what

Edvaldo Rabelo

and the Good morning, you thank questions. Daniel, for

regarding with this few will in approve a on that do rule time. the ago, seen, very confident will There end market can all quite the that this Obviously that be The it will We're forth days a XX a the we're perhaps approved still way. us any we my depends dates it short has out months CADE to first optimistic. comments. not very The and believe along and carried optimistic filing CADE to it XXXX its this months. time, we based just take period to we're CADE CADE, of The and a very we Evidently, set process. complexity XX Martinez Cement on for than bumps faster optimistic. are have because add we to due and confident process, the process cannot

end the is last a the of is at the this rainfall a quite de rains It this in Janeiro. process. Rio this but period seasonality. of It because in observed XX have in year, bit We natural days, has of normal

regarding have fundamentals a at market We XXXX, there. seasonality the we're present, confident are but

and record bring And could a areas, think This management. and synergies could intensity forecast, levels. company the X% over is a market. impact comes it to wait with coming growth the – and begin when the to but infrastructure that all Now, housing when comes here, need seem, approval be have it wear we a for these we to CADE financial other to continues the sanitation able closed and positive at of of we the take evidently our to to

this short efficiency, this explored We in well. diligence improvement, have medium synergies synergies we due out logistic consolidate short during believe segment. and price and a the to delivery term in all to are optimistic this would that able be of the technology this the we part operational the our we'll operations capture or we seek consolidate detail. as well can speed. and implement out of the greater And the can that and already with of carried process. going of term such of network synergies But something and few, necessary optimization in to these do as We're another There healthy that be performance this complex will all in the we're and for synergy, in We is plan. many with great recovery, way commercial operations one that of synergies, this we as improvement are more

Daniel Sasson

Marcelo. you, Thank Thank Edvaldo. you,

Operator

is question next Bradesco The from from Thiago BBI. Lofiego

Thiago Lofiego

hear to morning Marcelo, all Good you you. me? of can

Marcelo Cunha Ribeiro

hear can I Yes. you perfectly.

Thiago Lofiego

I classical is in This what always is and We we as Martinez. ask a you, socially like more don't sector, coal which mark of medium Martinez about or problematic that steel do question to if question him a on I and he to on foresees demand now, have better the the second My the ask a impact and coal the in of the the production? cost be sector and refers the the steel, will prices. cost it questions. domestic term two market is know, call. would which

Luis Martinez

Good morning, Thiago or good afternoon.

about Let’s a bit the speak market.

celebrate tons apparent XX,XXX now between flat year. XXXX, consumption give the all, the is level. difficult First happened this we of the to you of in what XXXX returning market have We this had XXXX an to in steel. to The moments levels are we idea to at

have the packaging. grew that outlook I white continues growth to the has of had And they a of the to all XX%. automotive in agree, important this X.X%. I a of look sector the If Another been transportation positive. seasonality, of believe in all year. it’s or trucks, railroad point, that a this, drop crisis during highway is is appliances, home although a markets line And the percent at despite we be have had business, facing a semiconductors, growth there due growth

food. are a in conditioned We There growth has metal of packaging X.X%. been for

So million XX%. the there’s year had we positive. to year. pessimism. positive the important also be tons for It is because It’s not market because And imports. million imports. tons it data specifically, year, a a very in imports, which was last of the X this will this is difficult imports comes year, reached not fall reason it about with say X is very much been was trend this a more We to another it year towards closing celebration, When

demand of the the faced are seasonality. normally markets supplied. terms supply fourth and in quarter, It we with In are will and quite happen

to is iron increase Some When have important, steel. coke. so longer $XXX to comes in and to increase which an there’s markets ton, the per the despite an cost ore buy going it drop have to no in of coal run stock, the we around cost, will in

what we minor is measures The is worldwide of that a China trends there a price towards be now to margin. with market market premiums. had exports price healthy premium the freight This and to we year is varies for and face and future of a from what room in iron compared there that and the premium, to imagine trend $XXX imagine growth ore. a Russia with BQ our zero the near dropping. a the of $XXX cost If restrictive will doubt, that Although to have favor will happening imports around it China, X%. If in we the to in XX% the without happened in drop during the up is September, because Brazilian maintain recover BQ

would like is that important last change of the At I is implemented I Another analyze, market a CSN that in strategy. the the call, in point the to happening what regardless pricing mentioned criteria. we

Our sales XX%, contracts. spot the contracts XX% is of and we prices profile are have that quarterly

the $XXX point profitable, we we per at of that discussed is make we working have that capacity reached and more margin volumes Another to that have full ton.

They complied this, all of had with this and market Portugal. will to our of in will discuss in million level some of in an if the part data positive to positive the totaling nothing exceptions, with of values positive tons healthy, U.S. growth work growth XX rare plates December Brazil. about XXXX, increasing demand in at Day, to a per the We for exports impact towards points very having a for we Russia able and Chinese because Germany of at tariff a BRLXX business them million had continue be exchange or will were and with to be BRLXX coming integrated those as a we exports We're products Germany, results. minor CSN to and that means we and supplied to had In all markets level results. who European situation rate or speak export negative had here. that more markets the very look all quotas, to our On the in rebates interesting for the of U.S., point of able Portugal, is completely U.S., growth positive freight increasing we the of be merchants. demand different for on and volumes year of on drop whole, Additionally, Xth important million

added market but because XXXX CSN on full limited, the the had and course, year will be more of aggressively Portugal. in market. whether U.S. growth the where to of all it's maximum focus the is markets for fragmentation. the outlook A of in a price technology, and innovation We're preserving to sectors our positive XX%, on spot domestic participate we is working company, the continue linked will going very value. in strategy the Of and to growth in XX% act

that portrait of the I I present think this is at market. the have

Thiago Lofiego

you Thank Martinez.

a of of now, X% close at me premium question, given of the seen it and allow level zero? and zero level to going demand. continue is the Is up demand you that to If between follow dynamic for XX% the We had premiums zero, demand.

Luis Martinez

are in we portfolio. Well, when to have things CSN, with now important is They what careful very there imports, be speak grown two competing coded has because Thiago. imports here we material. our about

had we to year premium this we what would doubled vis-à-vis speak have demand. products not with last and about We about Well, value. in supply added speak higher increase hold price if

reels used and at beginning year at to Now in a seek because January, around position the situation quality lower premium or market. going tighter recovery we to a have, other logistics in longer – should be the to we no factors. in but maintain we're we maintain continues, XX% a and If to this the domestic have if were premium XX% that price the a the market the of service XX% imports domestic it It's quality. imagine in

Thiago Lofiego

Thank you Martinez.

Operator

Carlos English Morgan from comes Alba in de Our question from Stanley. next

Carlos de Alba

do terms but the Yes. that acquisitions, And the Can is And on achieve? pieces tell think is Good out or My expecting expect during amount inventory? when you there, still the haven't be coming towards you up because other progression remain year it progression like first seen them quarter remember inventory them. back you moving really you that very is the cement, given possible fourth us in progression? or third business about the maybe fourth per levels cement the – recent what dollars the relatively everyone. all capital. real from the How a the I how your expected synergies that target I Thank that What And what morning, you. much. you the question in working or two to question that does it's the please? still seeing? he ended is in been quarter, what we're look Thank are the of to will offload with able with? in same is them Have do you quarter to you

Luis Martinez

synergy we Thank well the coming a a making higher synergies, price the administrative synergies distribution mentioned increase we reverted energy spoke radius growth to for volume increase in rather reduce in change Carlos monthly scenery plant but acquire as intelligent commercial able and were million. working through When you, energy. distributors, a amounting behavior the and we're to well. where price, year, to our BRLXXX customer as regarding the I Elizabeth that, would we and whole the BRLXXX when and the about very be of whole questions. several electrical asset. as areas a including as such in course, Well, EBITDA a these cost would have strategy, immediately the a avoid expectation The Well, results you by will synergies, BRLXXX constant of in neutral million use conservative the with results plant, market of the months. synergies saying of and that the Holcim of terms being of seam cost with million before, about we products; more discuss reiterate, terms distribution approximately we We and been at seam cost considering use base volume expecting being conservative look could than that lower being access this capital without of our of

consolidated this CSN. have at We

have just decrease provisional have that received volume effect and in and cash a in to months. invoice of coming we prices. mining This inventory. up, of speak that the will generate We're going revenues, We now

will and a reversed coming as this the this be for account will in client advance, months. We

capital or cash coming So neither in generation the will working months. help the hamper

Operator

Rafael from is question next Santander. The from Barcellos

Rafael Barcellos

taking my would for capital to allocation. speak like about you Thank I question.

ratio? debt. terms of if your the in You're company terms in any of of of during goal terms you income? of be net in debt EBITDA, will very CSN EBITDA will If close cement, goal considering a somewhat limitations net to certain limit have above its What are the net period

Benjamin Steinbruch

Thank for lines question? the allocation. our we in capital Rafael Well three have you,

important leverage this debt The below in this. and first, were an next X.X to is the seeking evolution we most we we attain to and year work We're net have not is going maintaining can EBITDA, grade that something so have negotiate. will investment This level.

in exercise to the Secondly, consolidation committed the of fold in that coming cements million increase announced, course, decade. to sector. company a BRLXX will has plans will the in led our besides the especially capacity been mining, these investment the three that already that This have ensure of production enhance CapEx and

steel. products. discussions value – comes devolution to have in added gains we with the internal in terms value holding will we of significant market efficiency but that Yes, terms when need have So and a are to had productivity disbursements, in the galvanized in we it we park, share adding more of

all Our Germany debt our part of net United presence, reinforcing international discussion of EBITDA. States is Portugal, this of footprint as and this one and under framework time

CSN, of we mining, grade. policy we the in XXX% of minimum and capital. investment This how XX% a to we dividend payment the allocate XX% is of Third, a obtain maintain dividends until

Rafael Barcellos

you Marcelo. Excellent. much, Thank very

Operator

Correa from audio? Leonardo, Pactual. from Instructions] Leonardo your next is [Operator question BTG The

Leonardo Correa

commercial your clear strategy about deal everybody. and have been strategy. heard steel for your to well, very have Martinez, you great share, we great market is a have deal we Good afternoon heard your and or developing about a iron

going you, like about more going would what Thank continue to are terms this. Now bit your realized doing? your with more would had And like expected. And I Martinez. this attempt hear protect you're to on what to much a strategy? prices, in to to profit you above if to was I continue and you of we Are hear X% rationale

Luis Martinez

full. quarter, at went one In What decided afternoon. XXX,XXX Good a don't were to this one showed Leo. produced. the tons production. in have working [ph] I thousand third you to noticed leap from we Hello, we we know Marcelo if do, point

do Now And what slag. higher quality, working a full with with we We're mix the this with a spot We're price. working strategy present. value make is a to added make at to the with a production have best is bottleneck profitable, profitable.

done to can And to in going good the now value. when great have our stabilize well, ago, a volume been to imports. sells X.X supply we as added going we volumes spoke that production do will Portugal, to This we be of value. XXXX. we're strategy from we're The at is X,XXX,XXX. profitability it's where everything beginning for leap and think EBITDA recover maximize results is the Portugal as it So has to year CSN everything $XXX, delivery the sales a is was the the the company is the in the reduction U.S., in fourth will in as quarter better and produce where about $XXX. more have plant whatever the product of to strategy We and the and Leonardo,

course, the Russia to a growing. of a with recapture dollars. that segment civil material in freight problems market of is this still have of great of availability We're the and with is deal because international Brazil, which We going the construction, for China and some

this do in will forward, that the day XXXX. profitability working going And volumes. will recover is available. with after able day, in what be larger challenge, we we a to the is This production and very We fourth quarter is maintain excellent volume best but a sell

confirmed strategy have transferred of this Another a conference is significant in call steel contracts your on you the already to you time, profitable had you industry, my point advantage that a side readjustment. take the for if and

it's an now the again, output. expecting automotive devoted sometimes that capture very and Now in produce is export in long-term you to represent And market industry and home to contracts. our in similar the assembly already produce to entire the segment at the contracts, or you or sector art this appliances. could price we segment like than domestic additional of home differently We that allow I plans something that you everything is requires and in Leo, contracts, market. more The for appliance annual price automotive what any in have more assets of lag I with like observe or in that present and that have perhaps work, competitors there's there's have fall from for segment. plan I terms readjustment. will interesting automotive work if distribution do will the be the that I, to price, with The third once focus that civil have This our small and industries, to regarding if on of greater increased price if the the this, the state on the prices share XX.XX%. My would in to strides to competitors something refer sort of have opportunities, is are anything the completely price market captured distribution would construction. are always one and XX% make the lower. And quarter there a you, on confirm confirm much XX% focuses fragmented of if is

at way home carrier so a to already sector. believe what to quarter, will more had new We some in out to this the the industry in that and competitors, if do works I sector strategy, from even slightly have ahead clients for will premium XXXX, the our these the of with but year industries year break So be CSN. our galvanized work that automotive the demand, be important of zinc prices There supply beginning respecting clients, the no I to and with of more some with there we these We clients. jointly the the cost was to have and and for dollar, do quite with flexible between CSN And were appliance we fulfill is policy. a able have promised. or very positive. positive fourth aligned price something and commercial or coming captured this everything zero

able deterioration XX%. of will of that to there one high in paid the was years, premium achievements we of a third segment firm what less this is be the I in is of quarter have best with that's carryover should our This to a for and XXX,XXX year, cost XXX,XXX the we working CSN I with in terms strategy. that results will the why steel the for I be had that. in the be There tons. maintained. can And think And I quarter, you for stock some a coming quarter. room in third share sell about fourth have

Leonardo Correa

Thank you. Martinez. much, Thank very you

Operator

now and closing IRO the to floor Ladies remarks. gentlemen, Instructions]. [Operator and the his for CFO will Cunha Mr. return we Ribeiro Marcelo

Marcelo Cunha Ribeiro

beginning December. all you presence we like call. this for invite CSN would I participate your thank And Day Once again, of the you at of at our in to to

our We to and reinforce all of optimism results invitations the we shareholders, will coming quarters. be the in with company out sending our

strategies, allocation, those very de-leveraging you much. Our more. and commitment with much innovation Thank capital

Operator

of call ends participation. like thank CSN a your afternoon. here. We all you for conference of good would to The Have

can You now disconnect.

Companhia Siderúrgica Nacional (SID) 4 Nov 212021 Q3 Earnings call transcript