Steelmaker CSN Cuts Its Loss to $109 Million as Cheap Chinese Steel Floods Brazil
Key Facts
—Net Loss. CSN cut its quarterly net loss 24.2% to R$555 million ($109M).
—Adjusted EBITDA. Adjusted EBITDA reached R$2.6 billion ($510M) with a 23.9% margin.
—Steel Volumes. CSN's steel volumes fell 2.5% and the segment's EBITDA margin collapsed to 7.0%.
—Net Debt. Net debt stood at R$40.5 billion ($7.9B) against equity of R$12.8 billion.
—Leverage Ratio. The leverage ratio reached 3.36x EBITDA, making CSN the most indebted major steelmaker in the Americas.
—Stock Price. The stock traded at R$5.10 and 0.54x book value.
CSN cut its quarterly net loss 24.2% to R$555 million as a 23.9% adjusted EBITDA margin masked steel volumes falling 2.5% and leverage hitting 3.36x, making it the Americas’ most indebted major steelmaker.
CSN Loss: What Happened
Companhia Siderúrgica Nacional (B3: CSNA3) is Brazilian industrial history listed on an exchange: founded by the state in 1941 to build the Volta Redonda mill that launched the country’s industrialization, privatized in the 1990s, and controlled since by Benjamin Steinbruch’s Vicunha group (insiders hold about 55%). Today it is really four businesses — flat steel, iron ore mining (via CSN Mineração), cement, and logistics — welded to one heavy balance sheet.
The latest reported quarter, published in May, showed a net loss of R$555 million ($109M), an improvement of 24.2% on the R$732 million lost a year earlier, per ADVFN. Revenue reached R$10.6 billion ($2.1B) with adjusted EBITDA of R$2.6 billion ($510M) — a 23.9% margin that looks respectable until you see how it splits between divisions. The market’s verdict was harsh anyway: the stock fell after the report on cash burn and debt, per Seu Dinheiro.
A beta of 1.34 — the highest of any company in this earnings series — is the market saying what CSN is: the most leveraged, most volatile way to trade the Brazil-China industrial cycle on the B3.
Key Drivers Behind the CSN Loss
China gives and China takes. CSN’s mining arm sells iron ore into Chinese demand — that business is fine.
But China’s own steel glut is being exported to Brazil at prices local mills call dumping, and CSN’s steel division is bleeding for it: volumes down 2.5%, segment revenue of R$5.6 billion ($1.1B), and an EBITDA margin of just 7.0% — against roughly 30%+ in mining. The same ship that carries CSN’s ore to Qingdao comes back, in effect, loaded with the steel that undercuts Volta Redonda.
Management’s counterplay is deleveraging by subtraction: asset sales, a possible minority stake sale in the cement business, and squeezing working capital. Leverage ticked down to 3.36x EBITDA from 3.48x — progress measured in basis points against a R$40 billion problem.
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CSN Financial Detail
| Metric | 1T25 | 1T26 | Chg |
|---|---|---|---|
| Net result | −R$732 mn (−$143M) | −R$555 mn (−$109M) | +24.2% (smaller loss) |
| Revenue | — | R$10.6 bn ($2.1B) | — |
| Adjusted EBITDA | — | R$2.6 bn ($510M) | margin 23.9% |
| Steel segment revenue | — | R$5.6 bn ($1.1B) | volumes −2.5% |
| Steel segment EBITDA | — | R$393 mn ($77M) | margin 7.0% |
| Net debt / EBITDA | 3.48x | 3.36x | −12 bps |
| Fiscal year | Revenue | EBITDA | Net income |
|---|---|---|---|
| 2021 | R$47.9 bn ($9.4B) | R$23.2 bn ($4.5B) | R$12.3 bn ($2.4B) |
| 2022 | R$44.4 bn ($8.7B) | R$10.3 bn ($2.0B) | R$1.6 bn ($314M) |
| 2023 | R$45.4 bn ($8.9B) | R$8.6 bn ($1.7B) | −R$318 mn (−$62M) |
| 2024 | R$43.7 bn ($8.6B) | R$7.7 bn ($1.5B) | −R$2.6 bn (−$510M) |
| 2025 | R$44.8 bn ($8.8B) | R$8.9 bn ($1.7B) | −R$2.0 bn (−$392M) |
The table is the whole story: revenue flat for five years around R$45 billion while profit went from R$12.3 billion — the commodity-supercycle jackpot of 2021 — to three consecutive annual losses. Same assets, same tonnage; what changed is the price of steel and the cost of carrying the debt.
| Quarter | EPS actual | EPS estimate | Surprise |
|---|---|---|---|
| Q1 2026 | −R$0.42 | R$0.20 | big miss |
| Q4 2025 | −R$0.81 | −R$0.20 | big miss |
| Q3 2025 | R$0.06 | R$0.35 | −82.9% |
| Q2 2025 | −R$0.13 | −R$0.23 | smaller loss than exp. |
| Q1 2025 | −R$0.55 | R$0.02 | big miss |
Four large misses in five quarters: the sell side keeps modeling a turnaround the steel market keeps canceling. Treat any consensus number on this stock — including the R$8.07 target — with corresponding humility.
Management Signals
Benjamin Steinbruch has run CSN through every crisis since privatization, and the current playbook is his classic: hold the assets, sell minority slices when the price is right, lobby hard for import protection, and wait for the cycle. The explicit emphasis on deleveraging and asset sales in the results release is the message to creditors; the unchanged dividend-less reality is the message to shareholders. Patience is mandatory equipment.
What to Watch Next
Trade defense: Brasília’s pending decisions on steel import tariffs and quotas are worth more to CSN than any quarter — every percentage point of protection flows straight to the 7% steel margin. Asset sales: a cement or mining stake sale at a good multiple would repair the leverage math overnight. Iron ore prices: the group’s cash engine. 2T26 in August: whether the loss keeps narrowing. China stimulus: the only force that fixes both of CSN’s problems at once.
Risks
Leverage is the existential one: 3.36x EBITDA with three straight annual losses leaves little room for a bad year in iron ore. If Chinese steel keeps arriving and Brasília’s protection disappoints, the steel division’s margin has no floor in sight. Refinancing costs stay punishing while the Selic is high. And the controlling shareholder’s conglomerate structure has historically traded at a governance discount the market shows no hurry to forgive.
Steel Sector Context
Brazil’s steel industry is fighting the same war as Europe’s and America’s — against Chinese overcapacity — but with thinner armor: tariffs are lower, and the currency often helps the importer. That is why Usiminas’ profit doubling this week (on cost cuts and mining) and CSN’s narrowing loss read as the same story: Brazilian steelmakers surviving on everything except steel.
For investors, CSNA3 at 0.54x book is the deepest-value, highest-risk expression of a bet that either Brasília protects its mills or Beijing stops flooding them.
This report is part of The Rio Times’ Company Intelligence coverage of B3-listed companies. It is journalism, not investment advice.
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Frequently Asked Questions
How much did CSN reduce its quarterly net loss?
CSN cut its quarterly net loss by 24.2% to R$555 million, compared to a loss of R$732 million a year earlier.
Why is CSN's steel division struggling?
The steel division is being hurt by cheap Chinese steel exports flooding Brazil, which pushed its EBITDA margin down to just 7.0%.
What is CSN's current debt situation?
CSN has a net debt of R$40.5 billion against equity of R$12.8 billion, making it the most indebted major steelmaker in the Americas with a leverage ratio of 3.36x EBITDA.
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