Companhia Siderurgica Nacional · BMFBOVESPA:CSNA3
Companhia Siderurgica Nacional — National Steel — Presentation (November 2023)
64 slides from Companhia Siderurgica Nacional's investor presentation, Nov 28, 2023
Slide 1: Interim Financial Information – September 30, 2023
Interim Financial Information – September 30, 2023 – Companhia Siderúrgica Nacional – CSN
Slide 2: Interim Financial Information – September
Interim Financial Information – September 30, 2023 – Companhia Siderúrgica Nacional – CSN
Slide 3: Interim Financial Information – September
Interim Financial Information – September 30, 2023 – Companhia Siderúrgica Nacional – CSN
Slide 4: Interim Financial Information – September
Interim Financial Information – September 30, 2023 – Companhia Siderúrgica Nacional – CSN
Slide 5: Interim Financial Information – September
Interim Financial Information – September 30, 2023 – Companhia Siderúrgica Nacional – CSN
Slide 6: Interim Financial Information – September
Interim Financial Information – September 30, 2023 – Companhia Siderúrgica Nacional – CSN
Slide 7: 4. Financial Investments
Our investments are basically in private and public securities with yields linked to the variation of Interbank Deposit Certificates (CDI) and repo operations backed by National Treasury Notes, respectively. The Company invests part of the funds through exclusive investment funds which have been con
Slide 8: Accounts receivable from third-party consumers
The composition of the gross balance of accounts receivable from third party consumers is shown as follows:
Slide 9: Inventories
(1) Long-term iron ore inventories that will be used after the construction of the processing plant, which will produce pellet feed. Interim Financial Information – September 30, 2023 – Companhia Siderúrgica Nacional – CSN
Slide 10: Recoverable taxes
(1) In a judgment finalized on September 24, 2021, the Federal Supreme Court, with general repercussion, decided for the unconstitutionality of the levy of IRPJ and CSLL on amounts of interest on arrears at the SELIC rate received because of the repetition of undue tax payment. Although the decision
Slide 11: Other receivables
(1) In April 2023, the subsidiary CEEE-G recognized the amount of R$ 37,486, referring to the Taxes and Contributions Amounts (VIC) of the Hydroelectric Plants committed to Physical Guarantee Quota Contracts (CCGFs).In the 3 rd quarter of 2022, the uncontroversial amount of R$422,254 was recognized
Slide 12: Investments in subsidiaries and consortia
(*) Dormant companies. (1) On June 1, 2023, MAZET - Maschinenbau Zerspanungstechnik GmbH was acquired by the indirect subsidiary Stalhwerk Thüringen GmbH; (2) On December 26, 2022, the Itaúba Consortium was formed, with Companhia Siderúrgica Nacional S.A., with a 63.4% stake, and CSN Cimentos Brasil
Slide 13: Investments: changes and notes
(1) Refers mainly to the alienation by CEEE-G in the first quarter of its equity interest in affiliates Ventos Lagoa Energia S.A., Parques Eólicos Palmares S.A., Ventos do Litoral Energia S.A. and Ventos dos Índios Energia S.A., consequently, there was a write-off of these investments in the amount
Slide 14: Changes in Parent Company's investments
(1) The operating margin of intercompany transactions with group companies classified as joint ventures, which are not consolidated, are reclassified in the Statement of Income from the Investment group to the costs and income tax and social contribution groups. The changes in the Parent Company's i
Slide 15: Reverse incorporation of CSN Cimentos
(1) On August 31, 2023, the reverse incorporation of CSN Cimentos into CSN Cimentos Brasil and the transfer of all assets, assets (movable and immovable), rights and obligations were approved. Interim Financial Information – September 30, 2023 – Companhia Siderúrgica Nacional – CSN
Slide 16: 9.c) Transnordestina Logística S.A. (TLSA)
9.c) TRANSNORDESTINA LOGÍSTICA S.A. (“TLSA”) TSA is primarily engaged in the public service operation and development of a railroad network in the Northeast of Brazil, comprising the rail links Velha-Salgueiro, Salgueiro-Trindade, Trindade-Eliseu Martins, Salgueiro- Porto de Suape, and Missão Velha-
Slide 17: 9.e) Sale of shareholding – Consórcio Machadinho
9.e) Sale of shareholding – Consórcio Machadinho The Machadinho Consortium is responsible for the exploration of HPP Machadinho, located on the Uruguay River, on the border of the states of Santa Catarina and Rio Grande do Sul, with an installed capacity of 1,140 MW and a physical guarantee of 519.8
Slide 18: Investment properties fair value
The Company’s estimate of the fair value of investment properties was made for December 31, 2022. The fair value of investment property in the consolidated balance as of September 30, 2023, and December 31, 2022 is R$2,163,610 and in the parent company R$2,097,290. The average estimated useful lives
Slide 19: Property, plant and equipment
(*) Refer substantially to: i) in the consolidated table: assets for railway use, such as yards, rails, mines, and sleepers; and ii) in the parent company's table: improvements to third-party assets, vehicles and hardware. (1) The costs of capitalized borrowing are basically determined for the proje
Slide 20: Average estimated useful lives
The average estimated useful lives are as follows (in years):
Slide 21: Intangible assets
(*) Composed mainly of: (i) mining rights whose amortization is based on production volume and (ii) Concession agreement for the use of water resources in the acquisition of control of Companhia Estadual de Geração de Energia Elétrica, amortized over the agreement term (note 3.c). The average estima
Slide 22: Interim Financial Information – September
Interim Financial Information – September 30, 2023 – Companhia Siderúrgica Nacional – CSN
Slide 23: Borrowings raised and amortized in 2023
(1) Including unrealized exchange and monetary variations and funding cost. The Company raised and amortized borrowings, financing and debentures during 2023, as shown below:
Slide 24: 12.b) Maturities of borrowings, financing and debentures
12.b) Maturities of borrowings, financing and debentures presented in current and non-current liabilities
Slide 25: Covenants and financial instruments
· Covenants The Company maintains contracts that provide for the fulfillment of certain non-financial obligations, as well as the maintenance of certain parameters and performance indicators, such as the equity ratio disclosure of its audited interim financial information according to regulatory dea
Slide 26: Interim Financial Information – September
Interim Financial Information – September 30, 2023 – Companhia Siderúrgica Nacional – CSN
Slide 27: Interim Financial Information – September
Interim Financial Information – September 30, 2023 – Companhia Siderúrgica Nacional – CSN
Slide 28: Fair value levels and financial risk management
Level 1 - Data prices are quoted in an active market for items identical to the assets and liabilities being measured; Level 2 - Consider inputs observable in the market, such as interest rates, exchange rates, etc., but are not prices negotiated in active markets; Level 3 - There are no assets and
Slide 29: Hedge accounting and sensitivity analysis
CSN uses Hedge Accounting strategy, as well as derivative financial instruments to protect future cash flows. Sensitivity analysis of derivative financial instruments and consolidated foreign exchange exposure The Company considered scenarios 1 and 2 to be 25% and 50% deterioration for currency vola
Slide 30: Sensitivity analysis probable scenarios
(*) The probable scenarios were calculated considering the following variations for the risks: Real x Dollar – valuation of the Real by 1.71% / Real x Euro - valuation of the Real by 0.91% / Euro x Dollar – devaluation of the dollar by 0.81%. Source: Central Bank of Brazil and European Central Bank
Slide 31: Effects on balances by scenario
The effects on balances, considering scenarios 1 and 2, are shown below:
Slide 32: Market price risk and Platts hedge
(*) The sensitivity analysis is based on the premise of maintaining the market values as of September 30, 2023 as a probable scenario recorded in the company´s assets and liabilities. · Market price risk The Company is also exposed to market risks related to the volatility of commodity and input pri
Slide 33: Platts index hedge changes in equity
(*) The operation matured on September 30, 2023 and was settled in early October 2023. The changes in the amounts related to cash flow hedge accounting - Platts index recorded in shareholders' equity on September 30, 2023, are shown as follows:
Slide 34: Cash flow hedge accounting
(*) The probable scenario was calculated considering the Platts quotation on October 13,2023. b) Cash flow hedge accounting The Company and its subsidiary CSN Mineração formally designates relations of hedge of cash flows to protect highly probable future flows exposed to the dollar related to sales
Slide 35: Hedge accounting realization
(*) The realization of Hedge accounting cash flow is recognized in Other operating income and expenses, note 25. The net balance of amounts designated and already amortized in dollars totals US$3.567.556. In the hedging relationships described above, the amounts of the debt instruments were fully de
Slide 36: Credit risk
· Credit risk The exposure to credit risks of financial institutions considers the parameters established in the financial policy. The Company practices a detailed analysis of the financial situation of its customers and suppliers, the determination of a credit limit and the permanent monitoring of
Slide 37: Fair values of assets and liabilities
Fair values of assets and liabilities in relation to the book value Financial assets and liabilities measured at fair value through profit or loss are recorded in current and non-current assets and liabilities and gains and losses are recorded as financial income and expenses, respectively. The amou
Slide 38: Classification of derivatives
· Classification of derivatives in the balance sheet and income statement
Slide 39: Derivative instruments and securities at fair value
Derivative instruments Swap CDI x IPCA are fully classified in the borrowings and financing group, since they are linked to debentures in order to protect exposure to the IPCA. 13.d) Investments in securities measured at fair value through profit or loss The Company has common shares (USIM3), prefer
Slide 40: Lease agreements
The Company has lease agreements for port terminals in Itaguaí, the Solid Bulk Terminal - TECAR, used for loading and unloading iron ores and others and the Container Terminal - TECON, with remaining terms of 24 and 27 years, respectively, and lease agreement for railway operation using the Northeas
Slide 41: Estimated future minimum lease payments
The estimated future minimum payments for the lease agreements include determinable variable payments, which are certain to occur, based on minimum performance and contractually fixed rates. As of September 30, 2023, the expected minimum payments are the following:
Slide 42: 16. Other payables
16. OTHER PAYABLES The other payables classified in current and non-current liabilities are comprised as follows:
Slide 43: Advances from customers
(1) Advances from Customers : On December 31, 2022 the subsidiaries CSN Mineração and CSN Cimentos entered into advance contracts for the sale of electricity with national operators in the sector to be executed up to 8 years. Additionally, the subsidiary CSN Mineração S.A. received in advance the to
Slide 44: Income tax and social contribution reconciliation
The reconciliation of income tax and social contribution expenses and income of the consolidated and parent company and the product of the current tax rate on income before income tax and social contribution are shown below:
Slide 45: Interim Financial Information – September
Interim Financial Information – September 30, 2023 – Companhia Siderúrgica Nacional – CSN
Slide 46: 17.b) Deferred income tax and social contribution
17.b) Deferred income tax and social contribution: Deferred income tax and social contribution balances are as follows:
Slide 47: Foreign subsidiaries taxation
The Company has in its corporate structure subsidiaries abroad, whose income is taxed by the income tax in the respective countries where they were constituted at rates lower than those in force in Brazil. In the period between 2019 and 2023, these subsidiaries generated income in the amount of R$15
Slide 48: 17.d) Tax recognized in equity
17.d) Income tax and social contribution recognized in equity: The income tax and social contribution recognized directly in equity are shown below:
Slide 49: Interim Financial Information – September
Interim Financial Information – September 30, 2023 – Companhia Siderúrgica Nacional – CSN
Slide 50: Provisions for legal proceedings
The provision for tax, social security, labor, civil and environmental risks was estimated by Management and is mainly based on the legal advisors’ assessment. Only lawsuits for which the risk is classified as probable loss are provisioned. Additionally, tax liabilities from actions initiated by the
Slide 51: Interim Financial Information – September
Interim Financial Information – September 30, 2023 – Companhia Siderúrgica Nacional – CSN
Slide 52: Interim Financial Information – September
Interim Financial Information – September 30, 2023 – Companhia Siderúrgica Nacional – CSN
Slide 53: Cost and expenses (related parties)
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Slide 54: Related party balances
Consolidated and Parent Company Information: (1) Financial investments: Refers mainly to investments in Usiminas shares, cash and cash equivalents and Bonds with Banco Fibra and government bonds and CDBs with the exclusive funds; (2) Accounts receivables: refers mainly to sales transactions of steel
Slide 55: 21. Shareholders' Equity
21. SHAREHOLDERS’ EQUITY 21.a) Paid-in capital The fully subscribed and paid-in capital as of September 30, 2023, is R$10,240,000, divided into 1,326,093,947 common and book-entry shares (as of December 31, 2022, R$10,240,000 divided into 1, 326,093,947 common and book-entry shares), with no par val
Slide 56: Asset restructuring and treasury shares
As of March 31, 2023, an Asset Restructuring Agreement was entered into between Rio Purus Participações S.A. and CFL Participações S.A. ("CFL"), the shareholders that directly and indirectly hold all the shares of Vicunha Aços S.A. ("Vicunha Aços"). Thus, the implementation of this Transaction resul
Slide 57: Gross and net revenue
Gross revenue Domestic market Foreign market Deductions Sales returns, discounts and rebates Taxes on sales Net revenue Gross revenue Domestic market Foreign market Deductions Sales returns, discounts and rebates Taxes on sales Net revenue 09/30/2023 09/30/2022 21,323,643 2,801,754 17,032,364 15,417
Slide 58: Interim Financial Information – September
Interim Financial Information – September 30, 2023 – Companhia Siderúrgica Nacional – CSN
Slide 59: Depreciation, amortization and depletion
The depreciation, amortization and depletion for the period were distributed as follows.
Slide 60: Cost of production notes
(1) The cost of production includes PIS and COFINS credits on lease agreements as of September 30, 2023, in the amount of R$5,782 in the consolidated (R$5,426 as of September 30, 2022) and R$620 in the parent company (R$458 as of September 30, 2022); (2) They mainly refer to the depreciation of inve
Slide 61: Other operating income and expenses
(1) Refers to the gain on the sale of Consórcio Machadinho (see note 9.e); (2) Mostly refers to the write-off on the sale of Consortium Machadinho (R$ 22,326 see note 9.e); (3) In the Parent Company, refers substantially to losses incurred in the production process at the Presidente Vargas Plant ("U
Slide 62: Interim Financial Information – September
Interim Financial Information – September 30, 2023 – Companhia Siderúrgica Nacional – CSN
Slide 63: 27. Segment Information
27. SEGMENT INFORMATION The financial information related to the business segments is not changed from that disclosed in the Company's financial statements as of December 31, 2022. Accordingly, management has decided not to repeat them in this condensed interim financial information. Interim Financi
Slide 64: 28. Additional Information to Cash Flows
28. ADDITIONAL INFORMATION TO CASH FLOWS The following table provides additional information about transactions related to the statement of cash flows: