Companhia Siderúrgica Nacional (NYSE:SID) Q2 2023 Earnings Call Transcript

We also paid dividends and the disbursement was of BRL3 billion. Now we should have done all of this with ABS, in terms of technology at the last moment, EDS dropped out. We thought that this was a unique opportunity. We had to mobilize and in 48 hours, we were able to replace this surprise of the exit of EDS by preparing our proposal as part of the auction, and we ended up with 100% of CEEE. Subsequently, we had the purchase of our share in Eletrobras. We ended up with 100% of the Company. And in cement, we also deployed great efforts that we do not regret. This has led to a great deal of synergy, synergy that is being delivered now as foreseen. And we think this was a valid necessary effort, highly promising when it comes to our cement business.

So we leveraged those BRL13 billion. It was not our strategy, in the part of cement, as our priority strategically was to find opportunities outside of Brazil. We do believe we have to have assets abroad, make investments abroad to continue to grow in Brazil. This is our priority, but we had CEEE and Lafarge Holcim. We had to make an offer. We thought this was a valid and viable effort. And we’re presently working towards deleveraging until the end of the year to reach that 1.95x, which is the commitment to the market and a commitment to ourselves. We’re making monstrous efforts to recover our margins, as has already been mentioned and to increase our cash that will help us in deleveraging. But we also have to consider the market opportunities.

And if opportunities appear, the market is looking at these opportunities more clearly, and we believe that CEEE and the Lafarge Holcim operation have added a great deal to our assets. We’re analyzing other market opportunities as was our initial plan. In cement, the idea was to carry out an IPO in the past. We continue to work towards this. And at the same time, we’re lengthening our debt, which is another priority to have a debt that will be diluted through time. Basically, this is our strategy. And as part of this, the Company works exclusively according to whatever is more state-of-the-art in ESG and technology. And Caio, I forgot to refer to the BRL2.7 billion in dividends, which was another commitment, as we prioritize growth, and we left our shareholders lagging somewhat behind.

And although the deleveraging part is a priority, we would like to award our shareholders with higher dividends, which is what we [do later] and will repeat this year. But dividends come after the deleveraging. And regarding the sound capital structure that we would like to have going forward. Several opportunities will come about, and we would like to be prepared to [what we survey] them. Now that alteration that hampered us so much in the steel mill as well as in mining, all of this has been stabilized with a consequent recovery of our operating margins. With all of this, we believe that we can maintain ESG, deleveraging of capital structure, the payment of dividends and a more adjusted operation with adequate margins. We will then see growth opportunities within the businesses that we are already in.

There will be no surprises outside of the [realm where] we already work. And this justifies what we want to do with the Company. I would say that we are in a moment of balance in that quest for deleveraging, analyzing opportunities that may arise and that will contribute to the growth of the Company to strengthening our EBITDA and our net debt EBITDA ratio in the Company. So what will come will be to cooperate with the growth of our present day businesses with an appropriate EBITDA that will just define a financial [that was made] and that will enable the Company to continue following the priorities I have just mentioned in the order that they were mentioned.

Operator: Our next question comes from Daniel Sasson from Itau BBA.

Daniel Sasson: Good afternoon to all of you. My question perhaps is [geared to] Benjamin. If you could remark on what changes in your [indiscernible] as one of the main domestic competitors have controllers. And what will happen in the market and what will happen with the plans that you continue to have in Usiminas. Does this change anything? And what is your vision on the change of structure in the industry? My second question to Martinez. You spoke about the synergies of your integration with Lafarge Holcim, the margins continue to be stable at 20%. If you can give more color in terms of your expectations for the second half of the year, what can be improved in terms of costs and prices?