Concerns regarding CSN 's leverage resurfaced on Thursday, March 12, after the company reported an increase in the ratio between net debt and EBITDA in the fourth quarter of 2025, even after stating that its priority is to reduce indebtedness.
Although operational performance was considered good by analysts – even though it reported an eightfold increase in losses, totaling R$ 721 million in the fourth quarter – CSN shares are experiencing a sharp decline. Around 2:15 PM, CSNA3 shares were down 10.7%, at R$ 6.37. Year-to-date, the decline is 26.9%.
The market strongly disliked the news of the R$3.7 billion jump in net debt, which reached R$41 billion. As a result, financial leverage increased from 3.1 times in the third quarter to 3.5 times in the last three months of last year.
In response to investor reaction, CSN's management highlighted in the earnings conference call that the increase was limited to the fourth quarter and that they remain committed to the asset sale plan announced at the beginning of the year as a way to resolve the situation definitively.
"I want to emphasize that it was a one-off increase and that it will eventually recover in the first quarter," said Benjamin Steinbruch, CEO of CSN, in a brief participation in the call .
In its financial report, the company stated that the result was affected by "debt servicing and increased investment activities." Steinbruch also cited the effects of the non-renewal of export prepayment contracts in the mining sector, as well as exchange rate effects, factors that are not expected to have further impacts going forward.
Regarding the divestment process announced in January, which is central to CSN achieving its goal of deleveraging between R$15 billion and R$18 billion, executives said the process is progressing well and that they expect to close deals for the sale of cement and infrastructure assets in the third quarter.
The most advanced process is that of the cement unit. According to Antonio Marco Rabello, CFO of CSN, the company has received proposals from interested parties from various geographical locations, most of them from Asia, and the process is progressing well. The sale is being advised by Morgan Stanley .
"We are confident that we will have a very quick process here in the coming months," he stated. "We imagine that, in about two months, we will have several proposals on the table; it's more than achievable, it's quite feasible."
In the case of infrastructure assets, a process advised by Bradesco BBI and Citi , Rabello stated that discussions began before CSN announced its divestment plan, but it is somewhat more complex due to the requirements of consolidating the assets onto a single platform and needing a series of regulatory approvals.
While negotiating the sale of assets, CSN is also negotiating a loan with banks using its cement unit as collateral, corroborating previous reports. According to information from Agência Estado , the company was very close to securing a loan of up to US$1.5 billion under these conditions.
Rabello stated that CSN was going to finalize this operation, but several negative news stories involving corporate credit, in addition to the issue of the war in the Middle East , made the company hold off on closing , waiting for the dust to settle.
“We’re bringing this operation back to the market; the same group of banks that was with us a few weeks ago is with us again today, and we’re now at an extremely mature stage. We clearly believe that in a matter of days we will have this operation signed and finalized,” he said.
The issue of high leverage has plagued CSN for some time, but it has recently gained urgency after companies like Raízen and GPA filed for bankruptcy protection, precisely because they carried high levels of debt.
According to analysts at BTG Pactual , this is an issue weighing on CSN's investment thesis, as they believe there are more attractive names within the steel and mining sectors. "We remain cautious and expect the story here [CSN's investment thesis] to be driven by events, largely depending on the pace of deleveraging in the future," states an excerpt from the report.
Analysts at XP highlighted that "CSN's high leverage implies a limited safety margin in a context of high interest rates in Brazil," even though the results came in slightly above expectations.
In the fourth quarter, in addition to the loss, CSN reported a 5.2% drop in net revenue, which totaled R$ 11.4 billion, and an adjusted EBITDA of R$ 3.3 billion, stable on an annual basis.
