Companhia Siderúrgica Nacional (NYSE:SID) Q4 2024 Earnings Call Transcript

Companhia Siderúrgica Nacional (NYSE:SID) Q4 2024 Earnings Call Transcript March 13, 2025

Operator: Good morning, ladies and gentlemen, and thank you for holding. We would like to welcome everyone to CSN’s conference call to present results for the fourth quarter and full year 2024. Joining us today are the company’s executive officer. 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. [Operator Instructions] You can access the event at ri.csn.com.br, where the presentation is also — the replay will be available after the conclusion. Before proceeding, we would like to state that some of the statements, our expectations are trends and based on current assumptions and opinions of the company management. These performances and events may differ materially from those expressed herein as they 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 general and economic conditions in Brazil and other countries, interest and exchange rate levels, future rescheduling or prepayment of debt in foreign currency, 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.

I would now like to turn the floor over Mr. Marco Rabello, the CFO and Executive IR Officer, who will present the Company’s operating and financial highlights for the period. You have the floor, Mr. Rabello.

Marco Rabello: Good morning, everybody. It is a pleasure to present the results of CSN for the fourth quarter and full year 2024. We begin on Slide 2, where we have highlights of an exceptional quarter, the strongest in the year, with a strong EBITDA evolution, cost control and enhance the prices in all segments. We have the highest cash of our history, almost reaching BRL25 billion of course, enabling us to control the leveraging of the group. Now the leverage of this semester is the impact of the exchange rate variation and our debt in dollars. Otherwise, the leverage would have been closer to 3.2 times showing the operational enhancement and the projects to recycle capital in the group. With the coming of CMIN that brought in BRL4.4 billion to the cash of CSN at the end of 2024.

If we look at the highlights in mining, the fourth quarter of ’24 was a period confirming the operational excellence, the company reached its production guidance and CI cost with operational records for the year despite the rainfall at the end of the year. They did not have the impact that we had expected. We also had a strong price increase of 35% vis-a-vis the previous quarter, leading the EBITDA margin to a level above 50%. In steel, our plan for a normalization and recovery of results continue that full steam. In the fourth quarter 2024, we had the best commercial results since 2021. We offset the negative seasonality at the end of the year with a 10% increase in sales when compared to the same period last year. This shows that the steel consumption continues a favorable trend and that we’re making the most of that trend.

It was possible to present a recovery of EBITDA with the margin reaching 11% in the fourth quarter. The first time in the year that we surpassed a double-digit level. This enhancement of the environment allowed price readjustment of 5% at the beginning of the year. This should give greater thrust to the results of the segment in 2025. On the part of cement, we had a better price environment, offsetting the negative seasonality that is typical for the quarter, and the costs enabled us to reach a new EBITDA record margin. We have 33% margin, the highest margin since we purchased Lafarge Holcim with margins much higher than those of the market. Finally, if we look at the highlights of other segments, we had sound results in logistics especially because of the negative factors during the period in energy, a lower EBITDA compared to the previous setter is due to the migration of systems after the acquisition, and this should not be repeated during the period.

We go on to the next slide, to speak about the commitment we have towards deleveraging and a more comfortable capital. We have some important actions that are part of this trajectory. First, the sale of a stake in CMIN, 10% in an operation with very attractive values and that was only carried out to help us in deleveraging, reinforcing our cash by BRL4.4 million. This is a best example of our commitment and how conservative we are in the financial management of the company. The second movement, another strong example of diligence that we have adopted in our growth opportunities. We have a clear limit in the deleverage and the acquisitions carried out in cement. We have decided not to continue with some of these operations to enhance deleveraging we have complementary assets in our operation.

And so we now have new avenues for organic growth and we’re investing in cement with great efficiency in our return yields. The chapter about capital recycling. We have been very impacted in underscoring the quality of the assets of the group. We have several assets that, of course, could enhance our capital. The most recent project is referring to infrastructure, and we have a minority stake in this. Now there is a value that has now been recognized at present, and this will mean that CSN can grow in a more balanced way and have the liquidity for deleveraging and growth. But we have other alternatives as was mentioned at other times, the energy assets and the steel plant itself, where we could have a minority. Now all the possibilities are being analyzed carefully and should be implemented at the right time.

And finally, regarding the dividends for 2024. We understand that the result of this year, and the deleveraging is one of the goals. We have decided not to distribute dividends in the first quarter of 2025 as we usually do. This reinforces our commitment towards the leveraging, and this has been approved at the Board of CSN yesterday. We go on to Slide #4, where we have the EBITDA result for the fourth quarter and for the full year 2024. In that quarter, we had a relevant evolution of EBITDA with more than BRL1 billion compared to the previous quarter with the best prices held in mining and allowing for this performance. But with a significant improvement in cement and steel. It shows us we’re on the right path to show even better performance in 2025.

When we analyze the performance of the year, we had operational records in all segments, offset by a lower dynamic in the iron ore price. Now if we take away the issue of international price that we follow up on 2024 was an extraordinary year where we showed impressive operational efficiency with high volumes obtained during the year. On Slide number 5, we present the evolution of investments as we tend to do at CSN, you can see a significant evolution of disbursement concentrated at the end of the year to unleash the growth potential of the group, especially for products that we will allow for the growth of the company, we have P15 and resources [UPV] (ph). Now the increase of CapEx in the fourth quarter is according to expectations we had already announced.

Since the third quarter 2024, the company has been obtaining good results because of its investment and investments have increased the pace to determine the performance we should have in the year 2025. Let’s go on to the next slide where we analyze our net working capital. We see a significant expansion this quarter with an evolution of accounts receivable due to the operational improvement and a reduction in the line of suppliers given the adequacy of the drawn risk and for fighting lines. On Slide #7, a we present the adjusted cash flow for the fourth quarter. We can see that even though we have a stronger operational results, we had a negative cash flow due to the effect of exchange rate on financial expenses and the volumes of investments carried out in the period.

This will be offset with the stake CMIN of BRL4.4 billion that still have not been contemplated in the flow that you see on the slide. Let’s go on to Slide #8. The net debt and leverage of the group. As mentioned, this increase in indebtedness for the period is a direct sequence of the exchange variation on the debt in dollars is canceled about our operational improvement and the efforts made to strengthen cash in the company. Now because of the exchange rate variation, the leverage should be closer to 3.2 times. And we show all the efforts carried out during the semester and also having a record of cash of BRL25 billion, as we mentioned at the beginning of the presentation. Now we are moving on to the next slide to look at the indebtedness profile.

We have a comfortable position because our debts are in the medium and short-term. We can comply our obligations for the coming three years. CSN remains active in its objective of extending the amortization period with a focus on long-term operations. We have a flow of amortization between the years 2027 and 2029. More than 70% of the maturities of 2025 have already been pressed reinforcing our commitment with deleveraging. Well, with this, we conclude the session on consolidated results, and we will now analyze each of the segments. On Slide #11, we see the sales of our steel mills and we have the best commercial performance since the second quarter of [2021] (ph). We overcame the negativity of the year presenting [1,600,000] (ph) tons of steel sold.

And there are several relevant facts there despite the skepticism that we have the consumption of steel continues to be great, and we have an increase of 10%. Secondly, with that results, despite all of the pressure and unloyal competition that the country suffers today with imported material and the strength of our commercial activity is aligned with the recovery of steel mill in CSN. We carried out several investments in the last few years to streamline the operation and to eliminate relevant bottlenecks in the last two years. When we go on to the following slide for steel production, we see that small drop in [quarter two] (ph) exclusively to seasonality when compared to the same period last year, we had a growth of 8% aligned with the normalization and greater efficiency with which the company is running after efforts to improve the operations.

If we look at the graph to the right, we have the cost of production with a significant drop in the year, also impacted by the exchange variation. Additionally, the fourth quarter was benefited by provision adjustments and cost from the period previous quarter. It’s impressive to see the improvement per ton with CSN having a strong recovery in this last quarter of the year. We still have to continue on with this to have a better profitability that is adequate for steel production. We go on to the financial performance for steel on Slide 13. Once again, sound evolution of revenue, price and EBITDA, all positively impacted by a greater commercial activity and the price increases that we had in long steel. It’s the first time that the EBITDA margin of steel reached 2 digits profitability, 11% vis-a-vis 6% in the previous quarter, showing the recovery we presented in the previous slide.

Although the margin is still somewhat compressed, there is a favorable trend in terms of volume and price with a need to greater profitability in the segment for 2025. Go on to speak about mining. We have on Slide 16, the results of production and sales in the last quarter. Now we complied with the guidance for 2024, despite important drop in purchases from third parties. This shows a strong performance the company has in the segment with several records in terms of the shipments and other. When you look at the performance during the quarter, there is a drop that is due to the beginning of rainfall on the operation, fully in line with the seasonality of the period. Regarding the financial performance on Slide 16. The main highlight is the price operation that we had in the period, offsetting the problem with volume and the margins of EBITDA going beyond 50%.

On the following side, we have adjusted EBITDA of the fourth quarter vis-a-vis the previous quarter. And despite lower volumes and the worsening of mix, the impact of price, the lower freight costs and the provisional costs are much more relevant to give us the EBITDA we record in the period. Let’s now go on to speak about cement. On Slide 19, we see the sales volume that we had for the quarter. Once again, the impact of seasonality to justify a drop of 11% with lower or fewer working days and higher incidents of rainfall when compared with the fourth quarter of ’23, there is a growth of 4%, showing the resiliency of the company to capture ever more efficiency in terms of logistics and to enter new markets. We see the performance of the year, and we can see that 2024 was another extraordinary year for CSN cement with a very assertive commercial strategy.

In the following slide, we have the financial performance for the segment. We are proud to present the highest EBITDA ever recorded in the history of CSN cement with a margin of 33%. In the fourth quarter, we not only had a level much higher than the average of the sector, but it shows the competitive edge of the company higher operational efficiency, a logistics network that enhances the competitiveness of our business, there was always a more favorable price trend for the quarter. When the prices are more aligned with the international market, we can deliver ever more robust results. During the year, we had BRL1.4 billion corresponding to 13% of the results of the group. We have new avenues for growth, and we are improving our risk diversification.

Finally, I would like to refer to the logistics segment on Slide 22, where we show you our financial performance. The drop that we see in invoicing and EBITDA for the fourth quarter is reflecting the seasonality of the business with lower shipments, both by railroad and port. Now the EBITDA margin was about 40%, showing the efficiency and safety of the operations. During the year, the performance is even better. We benefit from higher cargo volumes because of the supply of iron ore that we had in the last quarter. And along with the good performance of other assets, we had a growth in revenue of more than 11%. With this, we conclude the presentation on the segments, and I would like to give the floor to Helena Guerra to speak about ESG highlights.

Helena Guerra: Well, this is our performance for the last quarter 2024. We had excellent performance in terms of all of the material issues Well, we implemented a program to reduce the rate of potential excellence. We ended the year without fatalities, but we also had a 63% reduction in loss days, reaching the lowest rate in 10 years. When we had 66.3% reduction in the accident severity rate. Now all of this in a year where we work the most in our history with more than 106 million hours worked, 10% more than in 2023. In the last quarter of ’24, we had positive results in our agenda, where we focused on investments in projects to enhance our competitiveness to reduce costs. The results of these investments were expressive reduction in the emission of CO2, 7% reduction in the steel mill, very close to the goal we have for 2030 and also because of the record production year and other programs to increase the use of diesel in the social part.

We continue to advance in terms of diversity. We have 75% PMO representation since we set up this goal and we reaffirm the diversity policy of the company. We’re now moving back or simply moving forward. We want to have a more representative more diverse company, and this is associated to the pillars of efficiency and meritocracy. These pillars are convergence. We had investments in the CSN foundation, BRL60 million invested in social work. And this simplifies the positive impact of our operations, maintaining that constant dialogue with society so that we can renew our social policy. And of course, for another year, and thanks to all of this, CSN is recognized as industry top rated. We are a benchmark in our sector, and we were awarded with that top rated steel for 2024.

Very well. These are the highlights, and I would like to return the floor to Marco.

Marco Rabello : Thank you very much, Helena. We will now go on to the question-and-answer session. Benjamin Steinbruch, our CEO, is present with us and — the rest of the executive officers are also at your disposal for your questions. Thank you.

Operator: Thank you. We will now go onto the question-and-answer session. The first question is from Caio Ribeiro from Bank of America. [Operator Instructions]

Q&A Session

Caio Ribeiro: Good morning everybody, thank you for taking my question. The first question refers to the expansion projects the company is working on in mining, you have several projects like P15, the port expansion and options for organic growth in cement. If you could give us an overview of the priorities of this expansion that you are contemplating and at which stage they are, this would be very helpful. Now moving towards the steel production. If you could give us an update on the parity premium that you foresee for Brazil and how this effects your strategy in terms of price readjustment. And if we keep in mind that tariffs are now by the United States, which is your expectation regarding the antidumping suit that have been analyzed in Brazil and the changes in the quota and tariff system in Brazil as well. Thank you.

Benjamin Steinbruch : Caio, thank you very much for the questions. If I skip one of them, please repeat it at the end. Now in terms of our investment plan, what is important is that 2025 is a very important year. More than 60% of our CapEx is devoted to priority projects and expansion. We have done this in the past of course, but 2025 and onwards, most of our CapEx will be devoted to growth, which is part of the transformation of CSN Group. When we speak about priority projects, without a doubt P15 is a significant priority for the year. The forecast is that it will come into operation until the end of 2027 to have a full year of operation in 2028, more than 50 million tons high-grade iron ore phenomenal EBITDA for the group.

In steel, we have a plan, a reorganization that extend for the next 6 years to 10 years. It’s a lengthy project that began in 2024, and it continues in 2025. This year, we will focus on centering with several investments there. The many reform of furnace to that was announced to the market and other significant reorganizations in 2025, all of which are geared to enhancing performance and reducing cost at the steel mills when we speak about cement, we have Edvaldo here and I will allow him to speak about the cement expansion plan.

Edvaldo Rabelo: Good morning Caio. In terms of cement, we’re considering three greenfields that we had spoken about in previous meetings. We have a project in Parana and other in Sergipe and a third one in Para. Now these projects are in medium to high priorities. We have acquired the main equipment. We have paid it and paid for them and stop them in Brazil, they will be assembled when it makes sense for the company. And the main highlight is a project from Parana. We’re working on engineering. We have worked with basic engineering. We have progressed to higher engineering, and we’re very optimistic that we will have the environmental license to set up the plant this year. It’s a plant with a capacity of 3 million to 5 million tons per year, and it makes sense for the company as we are now present in a significant market, which is in the south.

We’re working on the maturity of the projects. And of course, our purpose is to continue forward. And when it makes sense for the company, we will begin allocating capital to these projects.

Luis Martinez: Hello Caio. This is Martinez. I will begin with a question referring to anti-dumping, the freight protection United States. Despite everything by China, we’re still here. We’re surviving. Now what is important is that during the last 6 months or 9 months, excessively, we have had several meetings with the ministry with Vice President of CMIN. Practical viewpoint, [12 innocuous ] (ph), nothing was done to resolve the problem of competitiveness. It is not a protectionist measure. Now when we think about the import parity, this continues. You spoke about the quota system Brazilian import. This cycle is innocuous. Well, we have business to legitimate what was important in 2023 based on the average of 2021, 2022. Well, the system, the government said for did not work with this movement today linked to the U.S., we see that in the market, we have communicating vessel and China has suffered antidumping from countries in Asia, such as Vietnam, the Thailand.

And they’re also holding back on the imports of Chinese material. So in Brazil, you cannot survive with these import, representing 25% and they could increase depending on the imbalance in the international market. Once again, this is not an issue of protectionism. It is one of isonomy and we’re very competitive in the country. When we think about trade protection and still speaking about dumping in the case of tin plates, CSN was successful in implementing a provisional antidumping for tin plates. This should be extended for the coming months and should become permanent. It’s a technical issue. And well, it was proven and it was implemented. Yesterday, we had a decision on coal lamination, something unexpected. We had everything that you can imagine in terms of competition, there was dumping.

There was damage. There was just cost jumping at [$600] (ph) and the government did not create a provisional antidumping for coal drawing, which, of course, is a concern. It makes competition unloyal. When we look at the scenario of China that we have remarked on, what is standing out is that Brazil is the last country in the world. It is an outlet for China to send its material. We’re speaking of [3.5 million] (ph) as volume, not very much for China, but it floods the Brazilian market. When we speak about the USA, we have export representing 250,000 to 300,000 tons and we have complied with that quota. What is happening in the U.S. is that the price has increased the BQ prices $1,500. I carried out a preliminary account here to simulate the material in the domestic market, putting 25% and exporting putting freight.

It’s neutral to sell in the domestic market or to sell in the American market paying 25% for the BQ. Now with a lower intensity, the same happens with higher added volume products to increase the price in the U.S.A. There could be an opportunity, of course, depending on the negotiations that government has with U.S. The greatest opportunity for CSN to export to U.S. is for tin plate. U.S. exports, 50% of tin plate, we don’t sell any of that. And I believe that in the next 2 months — in the coming two months, we could open up a negotiation as we had in 2018 with a system of quotas. Now the fact is that the U.S. is a net importer not only of tinplate 3.5 million. They’re a net importer of other coated product coil, for example, to trade dynamic goes through pillar that’s dumping issue and China.

What is more important for us is at CSN that the government has to issue protection measures against the unloyal imports from China. The issue of the U.S. is secondary because we’re worried about the imbalance in the market. You asked about the BQ. Presently, the premium is 15% to 20%. In this new level of dollars of [2.8] (ph), that’s a premium that if we are able to maintain it, is excellent. In the first quarter, we implemented a price increase in civil construction and distribution in assembly plant that went to 5% to 6.5%. So we should have a price increase of 3% to 5% for the brand products. Basically, this is the scenario for imports for the BQ internal market and our trade defense measures.

Caio Ribeiro: Very clear. Thank you very much for your details on the quarter.

Operator: The next question is from Rafael Barcellos from Bradesco BBI. Your microphone has been activated.

Rafael Barcellos : And congratulations for your results. My first question is to have more details on the strategic plan of the company. We’re undergoing a trade war. And I would like to understand which will be the impact not only on tariff on CSN, but how this changes your vision regarding the investment for the company, I understood that the priority is to continue on with mining, steel and efficiency projects. Now if you could give us more color in terms of the projects you have greater flexibility on if you are going to postpone them or not. And if there is a possibility of M&A in the steel segment, second question, a follow-up for Martinez in steel. Steel had a significant evolution of its results in this quarter. Could you connect what you’ve said initially and the evolution of these results in the first half of the year, cost and margin.

Benjamin Steinbruch : Rafael, to go to the second part of your question linked to cost margin and evolution. As I mentioned, last year was an interesting year in the case of the steel plant we were able to grow more than the market and especially in the fourth that theoretically, has always been a seasonable period, we were able to neutralize the drop and remain stable in terms of volume. The market had a 7% drop. This shows that our strategy — and we say this in all the calls is working and is on the right path. The most significant path in the steel mill as you have all perceived were justified. This increase in EBITDA is linked to cost. The cost we have been referring to the search for operational excellence. And it is our understanding that it will continue until the first quarter of the coming year.

In some of the calls, I mentioned that we have to pursue figures of 3,000, 3,100 tons per ton of slab, we have to head to that. In terms of price, we were able to recover in the first quarter, the increase in higher added value products among assembly plants. This will have a positive result. We hope that the market will continue to grow. We have a portfolio despite all of this, a very good portfolio that still needs to improve when it comes to added value we’re seeking to enhance the added value of our portfolio, and we will continue with that two-digit EBITDA for the first quarter and grow above the market. This is a scenario we foresee for the first quarter. In terms of guidance for the coming year as we work with full production, it won’t be very different from this year, but we will focus more on the cost pillar and optimization of products maintaining the added value strategy, the positioning in different segments and much more.

I’ll give the floor to Marco to answer the first part of the question regarding investments.

Marco Rabello : We have two questions. One about the company’s strategy. How we look upon the future, the issue of tariffs, steel, mining and much more. Now the group has begun the diversification of segment for some time already. It represents 13% of the cash of the group in steel, we will continue to increase its share in the company cash. We are going to improve our average EBITDA margin as part of future strategy. And we had mentioned this in the CSN Day in December about infrastructure that will add value to our logistics network. Just this alone has the potential of having the highest equity in the group. They are the two main value segments for the CSN Group. And in a future line of diversification of EBITDA, deleveraging and growth, they will be very important for the future of the company.

You spoke about tariffs. I’m probably referring to steel. And I think this has been clearly explained. The price of steel in the U.S. makes it worthwhile selling very even with the 25%. And in Brazil, where we exported to the U.S. was a very small part of our production. We can accommodate this in the local market differently from other companies with reasonable results. Regarding investment to complete the question, we do have good flexibility among all of the projects we have set forth. We have a road map for the coming 5 years. For the year 2025, we see a level of CapEx, very similar to that of 2024. We can still make adjustments, subsequent adjustments, but our focus is P15 and the reorganization of the steel plant. This shows how important the steel plant is in the company profitability and in risk diversification.

We’re not going to postpone these projects, other minor budgets. We will be flexible in terms of postponing them depending on how the year unfolds. Well, we in terms of results for 2025 should be more than sufficient to have the right CapEx, taxes, interest rates and further deleverage CSN. Thank you very much.

Operator: Our next question comes from Daniel Sasson from Itau BBA. Your microphone has been activated.

Daniel Sasson: Thank you. And good day to all of you. My first question goes to Marco. If you could further detail your deleveraging plans, if that guidance to get to the end of the year below 3x about which would be the main drivers for that and perhaps you have a significant improvement of EBITDA implicit in these figures, or does the guidance imply an increase in CapEx vis-a-vis 2024. And well, as a follow-up to previous questions. How much of that is in your hands to eventually postpone disbursements of 2025 for 2026, if this year proved to be somewhat more challenging in the second half of the year, then it is now the outlook seems to be very good according to Martinez for the steel plant. My second question, and Martinez, thank you for your explanation on protectionist measures.

Could you speak about the environment of steel in the Brazilian market comparing that moment where things are better for flat steel compared to long steel. What you expect and in theory long steel, perhaps has more space but the supply and demand dynamic seems to be more challenging. If you could compare these two segments, I would be very grateful. Thank you.

Luis Martinez: Hello Daniel, this is Martinez. Last year, was an interesting year because when we began the year, we could not imagine that we would get to 15.6 million tons of flat steel. Last year, we had some markets to give you more details. Well, some things were better than we expected in the automotive market. The market grew 16%. The bus market and truck market with 30% to 40% growth, recovery from other years of very low growth and a wide line on interesting surprise. People were buying more. They were renewing the equipment, civil construction. We still have a significant backlog works that are underway. Something will happen with infrastructure in distribution. It follows the segment. It was present in all channels in a very balanced fashion.

The only sector that was more impacted last year were agriculture machines because of investments in agribusiness, they came to a standstill. Now this year, to give you more detail, we began the year with a good portfolio, a well-positioned portfolio. In the second half of the year, perhaps I’m not sure, but we could have different signal in terms of what is happening. But I do believe that in the first half of the year, it’s a given. There is not very much to do in terms of the market. The market continues a buying market. But of course, there are other variable economy inflation, interest rate. I’m not taking that into account. We’re riding the wave and we’ll prepare ourselves for whatever is ahead. When we speak about long steel, what is happening in the domestic market, we suffered this with flat steel before because in long steel, we have several market players, via additional capacity in the domestic market, we have Gerdau , [Arcelor Brazil], (ph) a huge fight for market share now nowadays, contrary to flat steel long steel is presenting a drop, a minor drop in terms of prices.

And CSN has ever more focused on other markets removing itself from that pipe because our market is stable at 250,000, 300,000 tons. So the beginning of the year is not very different from what it was last year, despite the China effect or Trump effect, we have good opportunities of continuing to grow and to maintain the levels of 2024 this year. Daniel, I’m migrating to another part of your question. Our leverage plan for the year are deleveraging plan for the year, where focused on what is more structural when it comes to deleveraging, which is the operational result of the CSN group. We showed you how the fourth quarter of the year was strong based on the good operations we had in all of the segments and the stringent cost control. Now this is the pace.

This is the rhythm. We’re entering 2025 with — we have an EBITDA guidance for 2025. That is higher than that of 2024. And the fourth quarter will point to that increase in pace. Just this alone will be sufficient to face the cash disbursements, CapEx, interest rates, taxes and will allow the company to continue to deleverage. This is the main point. Our internal projection will allow us to work with that guidance of less than 3x that we offered at the end of the year. Now Above that, we have other structural projects that we have spoken about. We have a project that can generate value and liquidity for the CSN Group. CSN Builder, it’s still part of 2025. There are other possibilities for other assets that could attract capital, perhaps only in 2026.

Each will have their own moment, and we have internal discussions that CSN regarding this. But the future for the short-term has to become a reality and help us to bring additional deleveraging to the guidance we gave last year. And this will enable us to make other important investments speaking about investment, and this shows the flexibility we have in terms of investment. Of course, we can generate several investments. One of them, and Edvaldo mentions that is the investment in cement. We’re developing greenfield projects. We have three of them, and we can better define when they will be carried out. Our present day at end assets have the capacity to deliver more volume without new production sites. We delivered more than 12 million tons in 2023, 13 million tons in ’24, and 2025 will be even greater without a new site.

So the present day sites are highly elastic. And another topic [indiscernible] that we have surveyed since last year, our partnerships for specific investment some important items in our portfolio of investment and CapEx. We started doing this in partnership with some investors who could invest in the asset and be owners of that part of the assets for long periods of time so that we can bring benefit for their operations without having to have any disbursements in the company. This grants us significant flexibility in this year of transformation, but we also need to deleverage, and we will do this simultaneously.

Rafael Barcellos: Thank you Marco, thank you Martinez for the answers.

Operator: Our next question is from Yuri Pereira from Santander Bank. Your microphone has been activated.

Yuri Pereira: Thank you very much and good day to all of you. About the antidumping issue, once again, after the decision of coal drawing, which is a product you’re monitoring for the coming government decision. There is a schedule that the government does not always follow the schedule. If I could get an idea of which is the product that you are monitoring for the next government decision. And if you could speak about the very noisy news, the very volatile news about digital decisions and a sale of stake at Usiminas, simply to clean up this issue a bit if possible. Thank you very much.

Luis Martinez : Hi good morning. This is Martinez. To speak about the antidumping, specifically. What is happening in these pre-define process. It is very difficult to separate what is technical and what is political. Last year, I had mentioned this in other calls, our decision was to offer something technical and to work with the product that CSN is more interested in. We based ourselves on tinplate under when the process were successful and put in provisional amounts. We have the challenge for the government to maintain that antidumping and something definite at the end of April. Coal drawing, this is very bad news in my opinion. It’s a sign that despite this scenario of trade defense linked to in a causal link damage with expressive value of $500 to $600, I simply cannot understand which is the reason why they only have a temporary antidumping business makes sense technically.

It leads me to understand, and this is not a precipitated decision that there is interest in another market and other sectors. And well, we came in with the antidumping requests for all of the other products, we will have the prepainted products. CSN has led this along with Tecno. In terms of terms we have 1 or 2 months for this to happen. And the government after 120 days, will approve this and in prepainted products that we are in same business, we’re making investments in another production line of prepainted in [Porto Real] (ph). And what we have is 2x what CSN has in terms of import in miscible. We cannot imagine that we can continue with the industry at those levels. And what we have together is some of Arcelor and CSN and together, and companies are increasing capacity in the market are — Arcelor doing this.

So that antidumping issue sort of go down in terms of what can happen with other products, the prepainted one, the galvanize one and BQ as well. What the government should do immediately when I answered the other question that and said that it was innocuous. There have been positive attempts to hold back on imports. The quota did not work, while Brazil has to do now is do what the rest of the world have done the Asian countries themselves have 25%. Colombia has 25% for long steel. India has this as well. No other exit when it comes to a trade defense for Brazil. What has helped a great deal that the market has cooperated, it has grown, but we have to get ready for a future scenario, a scenario in the near future. Well, because of the Trump measures, they will foster imbalance in world markets.

This is a follow-up we have done in another 3 months, we should get to the end of the antidumping issue. What would resolve things is a safeguard measure of putting in those 25% to see what is happening with other business. Uli, you asked a question on Usiminas, I believe, correct. Now this is a very lengthy topic, and as a whole, it’s something that extends for 10 or 12 years. Basically, it was a justice decision, the local justice in Minas Gerais. The company will continue with its resources and the last to market communicate were in February on this site. And despite the shares of Usiminas, the active shares for sale. I dare, but there is a right time to do this. We’re going to continue to work with resource on this issue. Was that your question?

Yuri Pereira: Yes, yes. Thank you very much for the answers.

Operator: Our next question is in writing from Mr. Marcio Farid from Goldman Sachs. He says, in terms of dividends and execution of CapEx, these are changes of paradigm pointing to the need of deleveraging discipline in M&A hopes, but M&A should not be out of the agenda until you have executed your CapEx or deleverage.

Benjamin Steinbruch : Marcio, thank you for the question. As we showed you yet, the cutting of dividends will lead to deleveraging all of our strategy flexibility with CapEx follow along those lines of M&As are in accordance your company. The company did not follow through with an important M&A in 2024, precisely because of our deleveraging due to the commitment of CSN with deleveraging. And that is why we did not follow up on this M&A. Now this analysis of M&A last year, had extended for 24 months in the company. But when the transaction came about and the conditions at CSN were different, and we decided not to pursue that operation, although there was great synergy with the group. You’re right, at that point in time, we took that out of our strategy. And I would say that nowadays, the company does not have any material M&A for the year 2025.

Operator: Our next question in writing comes from [indiscernible], He said, good day. The company is it assessing the sale of minority stakes in MRS logistics.

Benjamin Steinbruch : Good morning. Thank you for the question. No. No, we are not holding discussions on a sale of minority stakes at MRS. This is a very important asset for operations, especially for steel and mining, and we’re very happy with investments and the results that MRS has delivered. So there is no decision therefore to sell a minority stake at MRS.

Operator: The next question from Mr. Luciano Costa from GC. How is the process of selling a stake in your energy assets. This process has been mentioned in some calls. Has it been difficult to find investors interested in that profile of hydric acids.

Benjamin Steinbruch : [indiscernible], thank you for the question. In truth, we made adjustment in the schedule for the transaction before bringing an apartment, we looked at the financial decisions we had at [indiscernible]. Of course, there was a debt in the company. The financial team worked on an infrastructure debenture that was made public. It represents BRL1.2 billion at a very efficient cost. And this helped us to sell of the operation, and we have debenture without the stakeholders of CER energy assets. So once we bring partners to this deal, it can be done in a more independent way. This is a strategy of the company. Now the sale was finalized last week on Friday, which means that the road has been paved to continue on or to go back to the discussion of bringing in a strategic financial partner for the company.

And we’re going to prepare the company during the year 2025. This is an important decision. It is part of the company plans, but is not very impactful in terms of deleveraging for the CN Group as the asset has very little debt. But of course, we will continue on with all of our deleveraging actions at the company.

Operator: Our next question comes from [indiscernible], who says, could you speak about what we can expect from the cement business, news on acquisitions of inter cement prices cement IPO and costs.

Benjamin Steinbruch : I will begin speaking about inter cement it’s news that we mentioned during the call. This is a transaction that we’re not following up on since the end of last year, we’re not considering this transaction at present, I think they have taken the route of a judicial recovery. We don’t have other details on this. The information can be obtained from the company. IPO for cement, yes, we do want to hold a cement IPO. The company is ready in terms of figures, governance, control frameworks to undergo an IPO, we wanted to list the company some years ago. We weren’t able to do it successfully. The company is even larger now and more ready to undergo an IPO, the difficulty is having a window in the equity market because of the higher interest rate, this will be more challenging. But yes, the company will. [Foreign Language]