Having long suffered from the effects of high leverage, CSN announced on Thursday, January 15th, a plan to balance its capital structure and reduce the ratio of net debt to EBITDA to one in up to eight years.
The company announced that it intends to start the year by making "strategic moves" to reduce its debt, mainly through the sale of significant assets, with the goal of deleveraging between R$ 15 billion and R$ 18 billion.
According to CSN, the divestments will allow the company to focus on "segments with higher profitability, growth and synergies," with the company expecting to double its EBITDA within eight years.
The statement does not specify which assets will be sold, but the company has already begun to take action. In December, it carried out a liquidity transfer between subsidiaries, selling its stake in MRS Logística to CSN Mineração for R$ 3.35 billion.
Infrastructure assets appear to be central to CSN's plan. Last year, the company signaled its intention to put them on the market to help reduce its debt, which ended the third quarter at R$ 37.5 billion, with adjusted financial leverage of 3.14 times.
In the earnings conference call, executives announced they were preparing to create a company to consolidate these assets. Named CSN Infraestrutura, the new company will bring together seven assets from the portfolio, including railways, ports, and highways.
The idea is to monetize this company through the sale of a minority stake, the formation of a joint venture, or even an IPO , said CSN's CFO, Antonio Marco Rabello.
CSN's leverage problems are nothing new. In 2021, the R$5.2 billion IPO of CSN Mineração had as one of its objectives to reduce debt. At the end of the first quarter, the ratio between net debt and EBITDA fell from 2.23 times in 2020 to 1.29 times in 2021.
Since then, leverage has once again become a challenge, pressured by the more difficult environment in the steel industry and by investments in diversification, with assets in cement and energy .
At the end of 2024, CSN revised its leverage projection from 2.50 times to a target below 3.0 times in 2025. The company ended 2024 with a net debt/EBITDA ratio of 3.49 times.
Also in 2024, after the transaction involving MRS, Fitch stated that CSN's search for partners in the energy and infrastructure segments, provided it is structured favorably, is crucial to supporting debt reduction.
Fitch calculated that CSN's total and net leverage will be 5.4 times and 3.5 times in 2025, respectively, improving to 5.0 times and 3.3 times in 2026, compared to 6.0 times and 3.5 times in 2024. This performance is expected to be driven by modest EBITDA growth and currency effects.
Around 11:45 AM, CSN shares were down 2.82%, at R$ 9.98. Over the past 12 months, the shares have accumulated a 24.6% increase, bringing the market value to R$ 13.2 billion.
