CSN (SID) Q3 2026 earnings review
CSN earns much less on iron ore while debt climbs
CSN, the Brazilian steel, iron ore and cement group, earned far less from iron ore while its debt kept climbing. Lower ore prices and dearer shipping to China cut its mining profit by 59% from last quarter. Its net loss widened to R$1.2 billion, partly because of a legal provision. Net debt rose by about R$2.8 billion, because weak profit left less cash.
| Revenue | R$10.5 billion −11% from a year ago |
|---|---|
| Operating profit before depreciation, excluding one-offs | R$1.9 billion −43% from a year ago |
| Net debt to a year of operating profit | 4.23 times 3.49 times last quarter |
| Full-year outlook | None given |
⚖️ Verdict: 🔴 Bearish
The story got worse because debt climbed again while iron ore, its biggest earner last year, made much less money. One caution: CSN agreed to sell its cement business and SWT, a steel unit abroad, and that cash could cut the debt.
The question now is whether the two sales will bring in enough cash to cut the debt. Either buyers pay enough to bring debt below four times a year's profit, or weak ore prices keep profit down and debt stays high. The sale prices, which CSN has not published, will tell.
🐂 Bull Case
CSN Freed Cash From Its Stockpiles
Working capital is the cash a business ties up in stock and unpaid customer bills, minus what it owes suppliers. CSN has pursued an "inventory reduction strategy" all year. Three months ago, management aimed for another R$1 billion of cash from it by December.
In the third quarter, the money tied up this way fell by R$844 million, by our math. Smaller stocks did most of the work, the company said. Customer bills also shrank because CSN sold less steel and iron ore, so that part can reverse when sales recover.
What to watch: the year-end stock level in the fourth-quarter report. Another drop in stock would show that the R$1 billion goal holds without help from weaker sales.
Cement Prices Rose Ahead of Its Sale
CSN Cimentos, the group's cement maker, follows what its parent calls "a more assertive pricing policy". In the third quarter it sold more cement than in any other quarter of 2026, even though heavy rain cut the number of working days.
- Revenue: R$1,451 million, up 8.8% from a year ago
- Volume: down 5.1% from a year ago
- Operating profit per ton before depreciation (EBITDA): R$112.84, up 5.6%
Revenue grew while volume fell, so higher prices carried the result. Raw material and freight costs took part of the gain, and the cement margin slipped to 26.6% from 29.1%. Profit per ton still improved, which shows the pricing held.
What to watch: the price Huaxin pays for the business, which CSN has not disclosed. A price that reflects this year's higher profit per ton would show the pricing gains carried into the sale.
🐻 Bear Case
Iron Ore Costs Rise as Prices Fall
CSN Mineração, the group's iron ore arm, ships most of its ore to China. CSN blamed lower ore prices and dearer sea freight, and argued that "any correction in iron ore prices and/or freight costs" would feed straight into higher margins.
- Revenue per ton: US$40.06, down 39% from a year ago
- Cash cost per ton: US$26.0, from US$21.1 a year ago
The market explains the price, but not the whole cost. Cash cost per ton, called C1, covers mining and processing before freight, and it sits above CSN's 2026 range of US$21.5–23.0. The miner said the rise "mainly reflected lower fixed-cost dilution": fixed costs fell on fewer tons, as output dropped 16% from a year ago.
That is why a rebound in ore prices alone would not restore the margin. By our math, cost of sales took 96% of mining revenue, 19 percentage points more than last quarter.
What to watch: cash cost per ton in the fourth-quarter report, after CSN cut low-grade output at its Pires plant. A figure above the 2026 range would mean weak output, not only the market, holds the margin down.
Net Debt Reaches 4.2 Times Yearly Profit
CSN measures its debt against EBITDA, operating profit before interest, tax and depreciation, over the past twelve months. The group argued that the downturn behind the rise "is temporary in nature and may reverse as market conditions normalize".
- Net debt: R$44.9 billion, up 20% from a year ago
- Net debt to a year of EBITDA: 4.23 times, from 3.49 times
- Cash, by our math: down about R$3.7 billion in the quarter
The ratio has risen in three of the last four quarters, so the climb began while ore still sold above US$100 a ton. Gross debt shrank 1.6% as CSN repaid part of a 2028 bond, but weak profit pushed net debt higher.
To cut debt, CSN signed "a binding term sheet for the full divestment of the subsidiary SWT" and "the agreement for the sale of CSN Cimentos to Huaxin". But it gave no prices, no cash has arrived, and in August it issued new bonds paying 11% interest.
What to watch: the sale prices, set against the R$15–18 billion CSN aimed to raise from asset sales in 2026. Proceeds well below that range would leave the debt ratio near today's level.
Steel Profit Falls Short of CSN's Target
Brazil's antidumping duties, extra taxes on foreign steel sold below a fair price, helped CSN win back home sales. The company credits the "positive effects of antidumping measures", but wrote that "their effectiveness has been weakened by circumvention practices". Three months ago, management aimed for a 15–17% steel margin in the second half.
- Steel EBITDA as a share of revenue: 10.0%, from 10.5% last quarter
- Without R$211 million of idle-line costs CSN added back: 6.3%
- Steel imports into Brazil in September: up 34.6% from a year ago
The mill ran well: output of slab, the semi-finished steel it rolls into sheets, reached its highest level of the year, and slab cost held steady. But management's plan to lift some prices by 5–7% in September left the average home price unchanged.
CSN said local rivals offered bigger discounts and imports returned. By our math, the steelmaker would need a fourth-quarter margin near 22% to average 16% for the half.
What to watch: the fourth-quarter steel margin and whether management repeats its 15–17% aim. A margin near this quarter's level would mean the duties protect sales volume but not price.
Risks this quarter didn't answer
Four standing risks got no figure in the release text that would settle them. Each item names the disclosure that would move it.
- Arbitration over iron ore supply contracts, a claim of about US$1 billion: CSN booked a provision but gave no amount; the quarterly filing should show it.
- Currency gap between dollar debts and dollar assets: the net figure widened to US$2.95 billion; CSN called it "a temporary accounting presentation effect" that it addressed in October.
- Money moving between CSN and CSN Mineração, its listed iron ore arm with outside shareholders: no new disclosure, and the arm's share buyback stays open.
- Cash flow before debt payments: the release text does not break it out; the full cash flow table will show whether it stayed negative.
👓 Other Themes
Brazil Builds More Cars but Uses Less Steel
Brazil's carmakers had a strong year: vehicle production climbed 8.7% in the first nine months, according to the industry body ANFAVEA. September registrations reached the highest monthly level since December 2014. Overall steel demand moved the other way, because apparent consumption, domestic sales plus imports, fell 3.6% in the quarter.
💲 Other KPIs
Spending on plants and mines eased slightly, down 3.6% from a year ago. CSN trimmed upkeep and spent more on P15, new plants that turn stockpiled iron ore into pellet feed, and on the Jacuí power plant. Investment took 13.2% of revenue, inside the range of the past year.
The group's interest and financing bill shrank 26% from last quarter. The steelmaker credited a smaller inflation adjustment on its inflation-linked debts and gains on derivatives. Even so, by our math the bill equalled about 73% of the quarter's operating profit before depreciation, so little was left for tax and investment.
Logistics, the rail, port and road freight business, kept the steadiest profits in the group. Its margin of operating profit before depreciation (EBITDA) slipped 1.2 percentage points from a year ago, while revenue held at R$1.21 billion. Rail freight earned a 53.2% margin.
❓ Key Questions
What price will Huaxin pay for CSN Cimentos?
CSN signed the sale but gave no price or closing date. Debt now stands at 4.2 times a year of profit, so the size and timing of this cash decide how far it falls.
Does the 15–17% steel margin aim still stand?
Management set it for the second half three months ago. The release does not repeat it, and the third quarter came in at 10.0%, or 6.3% without an accounting add-back.
Is the 2026 iron ore cost range still valid?
CSN planned a cash cost of US$21.5–23.0 per ton for 2026. All three quarters so far ran above it, and the third reached US$26.0.
How large is the arbitration provision?
A provision for an arbitration over iron ore supply contracts drove most of the R$1.2 billion of other operating expenses. The claim was about US$1 billion, so the size of the provision matters for cash.
When will the SWT sale close, and for how much?
CSN signed a binding term sheet to sell all of SWT, one of its steel units abroad. It has not said what the buyer pays or when the cash arrives.