Companhia Siderúrgica Nacional, Brazil's leading steel manufacturer, has reported substantial financial setbacks in the third quarter of 2024, highlighting the challenging environment facing the global steel industry. The company's performance reflects broader market pressures and shifting economic dynamics that have impacted steel producers worldwide.
The financial results paint a concerning picture, with CSN recording a net loss of R$ 751 million ($131.8 million) in Q3 2024, a dramatic shift from the R$ 91 million profit achieved in the same period last year. The company's net revenue experienced a modest decline of 0.5%, settling at R$ 11.884 billion ($2.08 billion). Adding to these challenges, the adjusted EBITDA saw a significant decrease of 18.9%, falling to R$ 2.284 billion ($400.7 million).
CSN's mining division, CSN Mineração, faced particularly severe headwinds during this period. The subsidiary reported a sharp 62.8% decline in net profit to R$ 446.3 million ($78.3 million), while its net revenue contracted by 31% to R$ 2.973 billion ($521.6 million). These figures underscore the widespread nature of the challenges facing CSN's diverse operations.
The company's struggles can be attributed to several external factors affecting the global steel industry. Weakening steel demand, driven by economic uncertainties and market volatility, has created significant pressure on pricing and sales volumes. Additionally, intensified competition from international markets, particularly Chinese producers, has further complicated the operating environment for Brazilian steel manufacturers.
Despite these challenges, CSN has demonstrated resilience in certain segments of its business. The cement division emerged as a bright spot, achieving record EBITDA of R$ 975 million ($171.1 million) in 2023. This success highlights the importance of CSN's diversified business model in helping to offset challenges in its core steel and mining operations.
The management team now faces critical decisions regarding the company's strategic direction. Immediate priorities include implementing measures to enhance profitability across key business segments while maintaining operational efficiency. The upcoming earnings call is anticipated to provide crucial insights into CSN's strategy for navigating these challenges and returning to profitability.
