SID

Business Context and Reporting Period

Company: Companhia Siderúrgica Nacional (CSN) / National Steel Company
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Second Quarter 2026 (ended June 30, 2026)
Reporting Currency: Brazilian Reais (BRL)
Key Context: CSN reported results for 2Q26, comparing performance against 1Q26 and 2Q25. The quarter was characterized by a seasonally stronger operating environment, improved steel market conditions, and significant foreign exchange volatility impacting financial results.

Key Financial Metrics

Material Changes vs. Prior Periods

• Revenue Growth: Net revenue increased 5.7% year-over-year (YoY) driven by higher sales volumes and prices in the steel segment, supported by antidumping measures and a drier season.
• Profitability vs. Net Loss: While Adjusted EBITDA grew 4.8% YoY and gross margins expanded, the company reported a Net Loss of R$ 773.1 million. This deterioration was primarily caused by a negative Financial Result of R$ 1,843.0 million due to exchange-rate fluctuations and higher financial expenses.
• Cost Pressures: Cost of Goods Sold (COGS) rose 5.1% YoY due to higher raw material costs and increased sales volumes. Slab costs increased 3.2% quarter-over-quarter (QoQ) due to geopolitical conflicts impacting coal and energy prices.
• Debt Dynamics: Net debt increased slightly to R$ 42.1 billion, and leverage rose to 3.49x. This was driven by foreign exchange impacts on debt and an advance for capital increase, offsetting cash generation.
• Segment Performance:
  • Steel: Adjusted EBITDA grew 9.5% YoY; sales volumes increased 16.7% YoY.
  • Mining: Adjusted EBITDA margin compressed to 32.0% (down 4.1 p.p. YoY) due to higher freight costs and currency appreciation, despite record sales volumes.
  • Cement: Achieved a record Adjusted EBITDA of R$ 426.9 million (+45.5% YoY) with a margin of 30.8%.
  • Energy: Reported exceptional results due to retroactive revenue recognition from a regulatory decision regarding the Jacuí plant.

Guidance, Outlook, and Risks

• Outlook: Management remains committed to resolving the capital structure through asset sales and liability management. The company is on track to deliver stronger performance throughout the year, with Adjusted EBITDA for the first half up 5.2% YoY.
• Capital Markets Activity: CSN signed a US$ 1.2 billion bridge loan in April 2026 and announced an exchange offer in July 2026 to extend the maturity of US$ 1.3 billion in notes by two years. These actions aim to extend the debt amortization profile.
• Investments: CAPEX increased 6.2% YoY to R$ 1,414.0 million, aligned with strategic projects like P15.
• Risks and Contingencies:
  • FX Volatility: Significant exposure to exchange rate fluctuations, which negatively impacted the financial result and mining revenue realization.
  • Geopolitical Factors: Conflicts in the Middle East and between the US and Iran are driving up energy, fuel, and freight costs.
  • Market Conditions: Continued pressure from imported material in certain steel segments and volatility in iron ore prices.

Investor Verification Checklist

• FX Impact on Earnings: Verify the specific magnitude of foreign exchange losses included in the R$ 1.8 billion negative financial result and the hedging strategy effectiveness.
• Debt Maturity Profile: Confirm the details of the US$ 1.3 billion note exchange offer and the impact of the US$ 1.2 billion bridge loan on the overall debt schedule.
• One-Time Energy Revenue: Assess the sustainability of the Energy segment's results, which were driven by retroactive invoices from the Jacuí plant rather than recurring operations.
• Steel Segment Recovery: Monitor the durability of the steel segment's margin expansion (10.5%) given the reliance on antidumping measures and potential import competition.
• Working Capital Release: Validate the trend in inventory reduction and accounts receivable management that contributed to the positive Free Cash Flow of R$ 808.1 million.