CSN (subsidiary issuer): Cash burn overshadows EBITDA resilience

Research evidence excerpt

CSN (subsidiary issuer): Cash burn overshadows EBITDA resilience

Management outlook: better tone, but

cash proof needed

2Q/2H improvement depends on execution

Management’s forward-looking tone was constructive, especially on steel, cement and

working-capital release. In steel, management said the domestic market improved

meaningfully from March and expects better 2Q26 results, supported by anti-dumping

measures, lower imports, April/May price increases and cost initiatives. Management

also referenced a potential return to double-digit steel EBITDA margins in 2Q26.

We view this as a key upside risk, but not enough to change our cautious stance as price

increases need to stick, imports need to remain contained and cost savings need to

offset a still difficult domestic market.

Inventory monetization is also targeted

Management repeatedly emphasized inventory reduction as a key 2026 priority. It

referred to around R$12bn of inventories across raw materials, work-in-process and

finished products, and described inventory reduction as a major lever for cash

generation and deleveraging. The company said a liquidity program started in April to

monetize finished products and other materials, especially in steel.

Mining: resilient, but freight is a

headwind

Mining was operationally resilient despite heavy rainfall. CMIN reported 10.1Mt of total

production including third-party purchases, down -1.5% YoY, while own production

increased +6.7% YoY. Sales volume was 9.6Mt, broadly flat YoY, and TECAR shipped a

first-quarter record 8.7Mt, up +1.4% YoY.

Adjusted net revenue fell -7.2% YoY to R$3.1bn, which CMIN attributed exclusively to

FX, as volumes and prices were broadly stable. Unit net revenue was US$62.6/t, broadly

stable YoY and QoQ.