By Brazil Stock Guide – Companhia Siderúrgica Nacional (CSNA3) opened 2026 with a R$555 million loss and a balance sheet that still leaves little room for patience. Adjusted EBITDA reached about R$2.6 billion in the first quarter, slightly better than expected, but leverage remained high at 3.36 times net debt to EBITDA and free cash flow to equity was negative by more than R$1 billion, according to BTG Pactual.
That made the quarter less a story about steel, cement or iron ore than about a transaction that has not yet arrived. In January, CSN announced a broad divestment plan aimed at reducing debt by R$15 billion to R$18 billion, including the sale of control of its cement unit and a significant stake in infrastructure assets. Reuters reported at the time that JPMorgan viewed the plan as positive, but warned that execution would be key. Four months later, execution remains the point.
Waiting for the Check
BTG described CSN as an increasingly event-driven investment case, now centered on asset sales to repair the balance sheet and bring investors back. The bank kept a Neutral rating on both CSN and CSN Mineração (CMIN3), arguing that the first quarter brought no meaningful leverage relief and that updates on the cement sale would be critical after the results.
Other banks reached similar conclusions. Goldman Sachs reiterated Sell ratings on both CSN and CSN Mineração, with price targets of R$6.40 and R$4.30, respectively. The bank said CSN’s balance sheet remained the main concern, pointing to about R$4 billion in holding-company debt maturities in 2026 and cash burn of roughly R$1 billion per quarter, excluding the rollover of iron ore prepayment contracts.
JPMorgan’s reading was more balanced on operations, but not on cash. The bank saw the results as slightly positive from an operating standpoint, with CSN’s EBITDA 3% above consensus and CSN Mineração’s EBITDA 4.9% above consensus. Still, it said negative free cash flow limited a more favorable market reaction.
Cement Stands Out
The irony is that the asset most closely watched by investors is also the one performing best. CSN’s cement division delivered EBITDA of about R$393 million, 26% above BTG’s estimate, with a 31% margin. Genial also highlighted cement as the main positive, reporting record quarterly EBITDA of R$392 million and margins above 30%.
That strength makes the unit more attractive — and more important to sell. Reuters reported this week that CSN received non-binding offers for its cement division, with Morgan Stanley advising the process. The unit could fetch more than R$10 billion, and the binding phase is expected to follow after CSN selects which bidders advance. But non-binding offers are not cash, and the transaction still needs negotiation, financing and regulatory approval.
Steel Still Lags
The steel business did not offer enough to change the broader story. BTG said steel EBITDA came in at R$393 million, with a 7% margin, roughly 200 to 300 basis points below peers. January and February were weak, affected by import front-loading ahead of antidumping measures, although March accounted for 49% of quarterly sales and suggested a better entry point into the second quarter.
XP also saw better-than-expected consolidated results, with adjusted EBITDA of R$2.646 billion, 5% above its estimate. The brokerage pointed to stronger mining and cement contributions, but said steel remained challenging and that CSN’s leverage — around 3.4 times net debt to EBITDA — continued to limit the margin of safety. XP reiterated a Neutral rating on the stock.
Bradesco BBI was also cautious. The bank said operating results were consistent, but cash burn and leverage should remain important concerns for investors. The tone of management on liability management and the ongoing divestment plan, BBI said, would be central to the market reaction.
Mining Helps, But Not Enough
CSN Mineração had a less dramatic quarter, but not a fully comfortable one. BTG said EBITDA reached R$1.4 billion, broadly in line with its estimate, down 19% from the previous quarter and stable year over year. Shipments fell to 9.5 million tons, pressured by heavy rains, while cash costs remained broadly stable at US$23.1 per ton. The bank warned that higher Tubarão-Qingdao freight rates could pressure second-quarter results.
XP was more constructive on CMIN’s execution. It said the miner delivered adjusted EBITDA of R$1.420 billion, 5% above its estimate, helped by lower-than-expected C1 costs of US$23.1 per ton and an EBITDA margin of 44.9%. Even so, XP kept its Neutral rating, citing a cautious medium-term view on iron ore and limited valuation safety.
Genial kept both CSN and CMIN under review. Its title captured the market’s mood: CSN is “one step away from the sale.” The quarter had positives — cement, logistics, better-than-expected consolidated EBITDA — but also the same unresolved issue: negative cash flow, high leverage and a deleveraging plan that still depends on actual asset monetization.
Execution or Discount
CSN is not short of assets. It has a record-performing cement unit, a mining arm with low leverage, logistics operations and a steel platform that could benefit from a better domestic pricing environment. But the market is no longer paying simply for hidden value.
The January promise was clear: sell assets and reduce debt. The first-quarter result showed why that promise still matters. Until the divestment plan moves from announcement to closing — and from closing to cash in the balance sheet — CSN will remain less a turnaround story than a test of execution.
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