6-K/A 1 siditr1q20_6ka.htm SIDITR1Q20_6KA siditr1q20_6ka.htm - Generated by SEC Publisher for SEC Filing
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM 6-K/A
 
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
 
For the month of March, 2020
Commission File Number 1-14732
 

 
COMPANHIA SIDERÚRGICA NACIONAL
(Exact name of registrant as specified in its charter)
 
National Steel Company
(Translation of Registrant's name into English)
 
Av. Brigadeiro Faria Lima 3400, 20º andar
São Paulo, SP, Brazil
04538-132
(Address of principal executive office)
 

Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F. 
Form 20-F ___X___ Form 40-F _______

 Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.  

Yes _______ No ___X____


 

CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

 

Quarterly Financial Information - March 31, 2020 – CIA SIDERURGICA NACIONAL

Version: 1

 

 

Table of Contents

 

Company Information

 

Capital Breakdown

1

Parent Company Financial Statements

 

Balance Sheet – Assets

2

Balance Sheet – Liabilities

3

Statement of Income

4

Statement of Comprehensive Income

6

Statement of Cash Flows

7

Statement of Changes in Shareholders’ Equity

 

01/01/2020 to 03/31/2020

8

01/01/2019 to 03/31/2019

9

Statement of Value Added

10

Consolidated Financial Statements

 

Balance Sheet - Assets

12

Balance Sheet - Liabilities

13

Statement of Income

14

Statement of Comprehensive Income

16

Statement of Cash Flows

17

Statement of Changes in Shareholders’ Equity

 

01/01/2020 to 03/31/2020

19

01/01/2019 to 03/31/2019

20

Statement of Value Added

21

Comments on the Company’s Consolidated Performance

23

Notes to the quarterly financial information

39

Comments on the Performance of Business Projections

87

Reports and Statements

 

Unqualified Independent Auditors’ Review Report

90

Officers Statement on the Financial Statements

92

Officers Statement on Auditor’s Report

93


 
 

CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

 

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Version: 1

 

 

 

Company Information / Capital Breakdown

 

Number of Shares

(Units)

Current Quarter

03/31/2020

 

Paid-in Capital

 

 

Common

1,387,524,047

 

Preferred

0

 

Total

1,387,524,047

 

Treasury Shares

 

 

Common

7,409,500

 

Preferred

0

 

Total

7,409,500

 

 

Page 1


 
 

CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

 

Quarterly Financial Information - March 31, 2020 – CIA SIDERURGICA NACIONAL

Version: 1

 

 

Parent Company Financial Statements / Balance Sheet - Assets

   

(R$ thousand)

     
       

Code

Description

 Current Quarter 03/31/2020

 Previous Year 12/31/2019

1

Total Assets

  46,214,834

  44,814,611

1.01

Current assets

  9,986,891

  9,719,866

1.01.01

Cash and cash equivalents

  1,425,986

  392,107

1.01.02

Financial investments

  1,639,699

  2,596,424

1.01.02.01

Financial investments measured a fair value through profit or loss

  1,152,266

  2,114,620

1.01.02.01.03

Financial investments measured a fair value through profit or loss – Usiminas’ shares

  1,152,266

  2,114,620

1.01.02.03

Financial investments at amortized cost

  487,433

  481,804

1.01.03

Trade receivables

  2,053,614

  1,691,643

1.01.04

Inventory

  3,470,304

  3,736,716

1.01.08

Other current assets

  1,397,288

  1,302,976

1.01.08.03

Others

  1,397,288

  1,302,976

1.01.08.03.01

Recoverable taxes

  1,208,099

  1,129,584

1.01.08.03.02

Prepaid expenses

  103,720

  82,664

1.01.08.03.03

Dividends receivable

  33,351

  33,447

1.01.08.03.04

Others

  52,118

  57,281

1.02

Non-current assets

  36,227,943

  35,094,745

1.02.01

Long-term assets

  7,299,609

  7,374,332

1.02.01.03

Financial investments at amortized cost

  121,027

  95,719

1.02.01.07

Deferred taxes assets

  2,435,855

  2,435,551

1.02.01.10

Other non-current assets

  4,742,727

  4,843,062

1.02.01.10.03

Recoverable taxes

  1,746,032

  1,907,420

1.02.01.10.04

Judicial deposits

  223,398

  224,300

1.02.01.10.05

Prepaid expenses

  98,731

  110,099

1.02.01.10.06

Receivable from related parties

  1,648,448

  1,558,194

1.02.01.10.07

Others

  1,026,118

  1,043,049

1.02.02

Investments

  18,614,972

  17,402,191

1.02.02.01

Equity interest

  18,468,033

  17,316,463

1.02.02.02

Investment Property

  146,939

  85,728

1.02.03

Property, plant and equipment

  10,263,175

  10,266,084

1.02.03.01

Property, plant and equipment in operation

  10,224,167

  10,221,911

1.02.03.02

Right of use in leases

  39,008

  44,173

1.02.04

Intangible assets

  50,187

  52,138

 

 

 

Page 2


 
 

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Quarterly Financial Information - March 31, 2020 – CIA SIDERURGICA NACIONAL

Version: 1

 

 

 

Parent Company Financial Statements / Balance Sheet – Liabilities

   

(R$ thousand)

     
       

Code

Description

 Current Quarter 03/31/2020

 Previous Year 12/31/2019

2

Total Liabilities

  46,214,834

  44,814,611

2.01

Current liabilities

9,293,987

9,224,591

2.01.01

Payroll and related taxes

  156,175

  170,792

2.01.02

Trade payables

2,833,119

2,506,244

2.01.03

Tax payables

  84,615

  78,911

2.01.04

Borrowings and financing

4,299,929

4,396,840

2.01.05

Other payables

1,882,455

2,019,788

2.01.05.02

Others

1,882,455

2,019,788

2.01.05.02.04

Dividends and interests on shareholder´s equity

  13,116

  13,252

2.01.05.02.05

Advances from clients

  64,046

  72,404

2.01.05.02.06

Trade payables – Drawee risk

  937,576

1,121,312

2.01.05.02.07

Lease liabilities

  14,897

  17,269

2.01.05.02.08

Other payables

  852,820

  795,551

2.01.06

Provisions

  37,694

  52,016

2.01.06.01

Provision for tax, social security, labor and civil risks

  37,694

  52,016

2.02

Non-current liabilities

  32,750,837

  25,415,476

2.02.01

Borrowings and financing

  25,608,213

  19,702,620

2.02.02

Other payables

  428,804

  356,942

2.02.02.02

Others

  428,804

  356,942

2.02.02.02.03

Lease liabilities

  26,078

  28,671

2.02.02.02.04

Derivative financial instruments

  94,909

  -

2.02.02.02.05

Other payables

  307,817

  328,271

2.02.04

Provisions

6,713,820

5,355,914

2.02.04.01

Provision for tax, social security, labor and civil risks

  374,935

  370,703

2.02.04.02

Other provisions

6,338,885

4,985,211

2.02.04.02.03

Provision for environmental liabilities and decommissioning of assets

  175,875

  164,464

2.02.04.02.04

Pension and healthcare plan

  912,184

  912,184

2.02.04.02.05

Provision for losses on investments

5,250,826

3,908,563

2.03

Shareholders’ equity

4,170,010

  10,174,544

2.03.01

Share Capital

4,540,000

4,540,000

2.03.02

Capital reserves

  32,720

  32,720

2.03.04

Profit reserves

4,431,200

4,431,200

2.03.04.01

Legal reserve

  278,576

  278,576

2.03.04.02

Earnings reserves

4,210,888

4,210,888

2.03.04.09

Treasury shares

(58,264)

(58,264)

2.03.05

Accumulated profit/(losses)

(1,360,851)

  -

2.03.08

Other comprehensive income

(3,473,059)

1,170,624

        

Page 3


 
 

CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

 

Quarterly Financial Information - March 31, 2020 – CIA SIDERURGICA NACIONAL

Version: 1

 

 

Parent Company Financial Statements / Statement of Income 

(R$ thousand)

 
 

Code

Description

Year to date 01/01/2020 to 03/31/2020

YTD previous year 01/01/2019 to 03/31/2019

3.01

Revenues from sale of goods and rendering of services

  3,031,309

  3,021,217

3.02

Costs from sale of goods and rendering of services

  (2,778,380)

  (2,833,088)

3.03

Gross profit

252,929

188,129

3.04

Operating (expenses)/income

  (1,262,912)

308,308

3.04.01

Selling expenses

(162,239)

(120,144)

3.04.02

General and administrative expenses

  (50,192)

  (56,117)

3.04.04

Other operating income

74,847

219,694

3.04.05

Other operating expenses

(534,638)

(284,595)

3.04.06

Equity in results of affiliated companies

(590,690)

549,470

3.05

Profit before financial income (expenses) and taxes

  (1,009,983)

496,437

3.06

Financial income (expenses)

(351,172)

(458,764)

3.06.01

Financial income

53,376

101,370

3.06.02

Financial expenses

(404,548)

(560,134)

3.06.02.01

Net exchange differences over financial instruments

931,016

  (72,099)

3.06.02.02

Financial expenses

  (1,335,564)

(488,035)

3.07

Profit (loss) before taxes

  (1,361,155)

37,673

3.08

Income tax and social contribution

304

  (45,245)

 

Page 4


 
 

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Version: 1

 

 

3.09

Profit (loss) from continued operations

  (1,360,851)

  (7,572)

3.11

Profit (loss) for the year

  (1,360,851)

  (7,572)

3.99

Earnings per share – (Reais / Share)

-

-

3.99.01

Basic earnings per share

-

-

3.99.01.01

Common shares

   (0.98604)

(0.00551)

3.99.02

Diluted earnings per share

-

-

3.99.02.01

Common shares

(0.98604)

(0.00551)

 

Page 5


 
 

CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

 

Quarterly Financial Information - March 31, 2020 – CIA SIDERURGICA NACIONAL

Version: 1

 

 

Parent Company Financial Statements / Statement of Comprehensive Income

 

(R$ thousand)

   
       

Code

Description

Year to date 01/01/2020 to 03/31/2020

YTD previous year 01/01/2019 to 03/31/2019

4.01

(Loss) profit for the year

  (1,360,851)

  (7,572)

4.02

Other comprehensive income

  (4,643,683)

150,183

4.02.01

Actuarial gains over pension plan of subsidiaries, net of taxes

31

30

4.02.02

Cumulative translation adjustments for the year

380,042

(21,804)

4.02.04

Losses in cash flow hedge

  (5,390,043)

(18,440)

4.02.05

Cash flow hedge reclassified to income upon realization

364,818

184,217

4.02.06

Gain (Loss) on net investment hedge from investments in subsidiaries

1,469

6,180

4.03

Comprehensive income for the year

  (6,004,534)

142,611

 

 

 

 

Page 6


 
 

CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

 

Quarterly Financial Information - March 31, 2020 – CIA SIDERURGICA NACIONAL

Version: 1

 

 

Parent Company Financial Statements / Statements of Cash Flows – Indirect Method

(R$ thousand)

       

Code

Description

Year to date 01/01/2020 to 03/31/2020

YTD previous year 01/01/2019 to 03/31/2019

6.01

Net cash from operating activities

  (43,913)

(948,165)

6.01.01

Cash from operations

145,068

82,028

6.01.01.01

Profit (loss) for the period

(1,360,851)

(7,572)

6.01.01.02

Financial charges in borrowing and financing raised

276,982

349,039

6.01.01.03

Financial charges in borrowing and financing granted

  (16,540)

(12,414)

6.01.01.04

Charges on lease liabilities

  956

  965

6.01.01.05

Equity in results of affiliated companies

590,690

(549,470)

6.01.01.06

Deferred tax

(304)

45,256

6.01.01.07

Provision for tax, social security, labor, civil and environmental risks

  (10,090)

(69,429)

6.01.01.08

Monetary and exchange variations, net

  (547,893)

259,413

6.01.01.09

Write-off of property, plant and equipment and Intangible assets

-

13,542

6.01.01.10

Provision for environmental liabilities and decommissioning of assets

11,411

(5,158)

6.01.01.11

Updated shares – Fair value through profit or loss

962,561

(127,653)

6.01.01.12

Depreciation, amortization and depletion

209,495

158,007

6.01.01.13

Accrued/(reversal) for consumption and services

21,527

19,504

6.01.01.16

Others provisions

7,124

7,998

6.01.02

Changes in assets and liabilities

  (188,981)

  (1,030,193)

6.01.02.01

Trade receivables - third parties

  (19,768)

16,862

6.01.02.02

Trade receivables - related parties

  (394,990)

   (275,407)

6.01.02.03

Inventories

266,412

(371,991)

6.01.02.04

Receivables - related parties/dividends

  814

  (635)

6.01.02.05

Tax assets

82,873

(54,342)

6.01.02.06

Judicial deposits

  902

(11,405)

6.01.02.09

Trade payables

326,875

(118,919)

6.01.02.10

Trade payables – Drawee Risk

  (183,736)

235,181

6.01.02.11

Payroll and related taxes

  (14,616)

4,512

6.01.02.12

Taxes in installments – REFIS

5,679

(65,858)

6.01.02.13

Payables to related parties

113,756

(6,136)

6.01.02.14

Advance with related parties

  (20,289)

-

6.01.02.15

Interest paid

  (268,170)

(368,593)

6.01.02.16

Interest received

  198

-

6.01.02.19

Others

  (84,921)

(13,462)

6.02

Net cash investment activities

  (297,419)

(104,805)

6.02.01

Investments / AFAC / Acquisitions of Shares

  (2,180)

(4,847)

6.02.02

Purchase of property, plant and equipment and intangible assets

  (196,628)

(158,189)

6.02.05

Intercompany loans granted

  (98,614)

(49,698)

6.02.06

Intercompany loans received

4,076

-

6.02.08

Financial Investments, net of redemption

  (4,073)

107,929

6.03

Net cash used in financing activities

  1,375,211

807,103

6.03.01

Borrowings and financing raised

80,744

  2,246,890

6.03.02

Transactions cost - Borrowings and financing

  (1,980)

(28,810)

6.03.03

Borrowings and financing – related parties

  2,205,145

  1,581,639

6.03.04

Amortization of borrowings and financing

  (889,247)

  (2,763,750)

6.03.05

Amortization of borrowings and financing - related parties

  (13,053)

(222,553)

6.03.06

Amortization of leases

  (6,262)

(6,313)

6.03.07

Dividends and interest on shareholder’s equity

(136)

   -

6.05

Increase (decrease) in cash and cash equivalents

  1,033,879

(245,867)

6.05.01

Cash and equivalents at the beginning of the year

392,107

539,853

6.05.02

Cash and equivalents at the end of the year

  1,425,986

293,986

 

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Quarterly Financial Information - March 31, 2020 – CIA SIDERURGICA NACIONAL

Version: 1

 

 

Parent Company Financial Statements / Statement of Changes in Equity - 01/01/2020 to 03/31/2020

(R$ thousand)

               

Code

Description

Paid-in capital

Capital reserve, granted options and treasury shares

Earnings reserve

Retained earnings (accumulated losses)

Other comprehensive income

Shareholders’ equity

5.01

Opening balances

4,540,000

  32,720

  4,431,200

  -

1,170,624

10,174,544

5.03

Adjusted opening balances

4,540,000

  32,720

  4,431,200

  -

1,170,624

10,174,544

5.05

Total comprehensive income

  -

-

-

(1,360,851)

(4,643,683)

  (6,004,534)

5.05.01

Profit (loss) for the period

  -

-

-

(1,360,851)

  -

  (1,360,851)

5.05.02

Other comprehensive income

  -

-

-

  -

(4,643,683)

  (4,643,683)

5.05.02.04

Translation adjustments for the year

  -

-

-

  -

  380,042

380,042

5.05.02.06

Actuarial gains/(losses) on pension plan, net of taxes

  -

-

-

  -

  31

31

5.05.02.07

(Loss) / gain on the percentage change in investments

  -

-

-

  -

(5,025,225)

  (5,025,225)

5.05.02.08

(Loss) / gain on cash flow hedge accounting, net of taxes

  -

-

-

  -

1,469

1,469

5.07

Closing balance

4,540,000

  32,720

  4,431,200

(1,360,851)

(3,473,059)

4,170,010

 

 

 

 

Page 8


 
 

CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

 

Quarterly Financial Information - March 31, 2020 – CIA SIDERURGICA NACIONAL

Version: 1

 

 

Parent Company Financial Statements / Statement of Changes in Equity - 01/01/2019 to 03/31/2019

(R$ thousand)

               

Code

Description

Paid-in capital

Capital reserve, granted options and treasury shares

Earnings reserve

Retained earnings (accumulated losses)

Other comprehensive income

Shareholders’ equity

5.01

Opening balances

4,540,000

32,720

3,064,827

  -

1,065,188

8,702,735

5.03

Adjusted opening balances

4,540,000

32,720

3,064,827

  -

1,065,188

8,702,735

5.05

Total comprehensive income

  -

  -

  -

(7,572)

  150,183

  142,611

5.05.01

Profit (loss) for the period

  -

  -

  -

(7,572)

  -

(7,572)

5.05.02

Other comprehensive income

  -

  -

  -

  -

  150,183

  150,183

5.05.02.04

Translation adjustments for the year

  -

  -

  -

  -

(21,804)

(21,804)

5.05.02.06

Actuarial gains/(losses) on pension plan, net of taxes

  -

  -

  -

  -

30

30

5.05.02.07

(Loss) / gain on the percentage change in investments

  -

  -

  -

  -

  165,777

  165,777

5.05.02.08

(Loss) / gain on cash flow hedge accounting, net of taxes

  -

  -

  -

  -

6,180

6,180

5.07

Closing balance

4,540,000

32,720

3,064,827

(7,572)

1,215,371

8,845,346

               

 

 

 

 

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CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

 

Quarterly Financial Information - March 31, 2020 – CIA SIDERURGICA NACIONAL

Version: 1

 

 

Parent Company Financial Statements / Statement of Value Added
(R$ thousand)

       

Code

Description

Year to date 01/01/2020 to 03/31/2020

YTD previous year  01/01/2019 to 03/31/2019

7.01

Revenues

3,772,385

3,901,138

7.01.01

Sales of products and rendering of services

3,769,699

3,751,792

7.01.02

Other revenues

4,729

  127,754

7.01.04

Allowance for (reversal of) doubtful debts

  (2,043)

  21,592

7.02

Raw materials acquired from third parties

  (3,469,351)

  (3,373,861)

7.02.01

Cost of sales and services

  (2,878,256)

  (3,060,346)

7.02.02

Materials, electric power, outsourcing and other

(585,281)

(304,580)

7.02.03

Impairment/recovery of assets

  (5,814)

  (8,935)

7.03

Gross value added

  303,034

  527,277

7.04

Retentions

(209,001)

(158,007)

7.04.01

Depreciation, amortization and depletion

(209,001)

(158,007)

7.05

Wealth created

  94,033

  369,270

7.06

Value added received

(392,985)

  657,660

7.06.01

Equity in results of affiliates companies

(590,690)

  549,470

7.06.02

Financial income

  53,376

  101,370

7.06.03

Others

  144,329

6,820

7.06.03.01

Others and exchange gains

  144,329

6,820

7.07

Wealth for distribution

(298,952)

1,026,930

7.08

Wealth distributed

(298,952)

1,026,930

7.08.01

Personnel

  355,029

  347,839

7.08.01.01

Salaries and wages

  249,708

  241,697

7.08.01.02

Benefits

  69,873

  70,631

7.08.01.03

Severance payment (FGTS)

  35,448

  35,511

7.08.02

Taxes, fees and contributions

  156,377

  119,424

7.08.02.01

Federal

  113,851

  60,064

         

Page 10


 
 

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Quarterly Financial Information - March 31, 2020 – CIA SIDERURGICA NACIONAL

Version: 1

 

 

7.08.02.02

State

  42,526

  59,360

7.08.03

Remuneration on third-party capital

  550,493

  567,239

7.08.03.01

Interest

1,335,564

  488,035

7.08.03.02

Rental

1,618

1,030

7.08.03.03

Others

(786,689)

  78,174

7.08.03.03.01

Others and exchange losses

(786,689)

  78,174

7.08.04

Remuneration on Shareholders' capital

  (1,360,851)

  (7,572)

7.08.04.03

Retained earnings (accumulated losses)

  (1,360,851)

  (7,572)

         

Page 11


 
 

CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

 

Quarterly Financial Information - March 31, 2020 – CIA SIDERURGICA NACIONAL

Version: 1

 

 

 

Consolidated Financial Statements / Balance Sheet - Assets

   

(R$ thousand)

     
       

Code

Description

Current Quarter 03/31/2020

Previous Year 12/31/2019

1

Total assets

  52,723,083

  50,869,276

1.01

Current assets

  14,385,591

  12,725,805

1.01.01

Cash and cash equivalents

  3,281,138

  1,088,955

1.01.02

Financial investments

  1,644,460

  2,633,173

1.01.02.01

Financial investments measured a fair value through profit or loss

  1,152,266

  2,114,620

1.01.02.01.03

Financial investments measured a fair value through profit or loss – Usiminas’ shares

  1,152,266

  2,114,620

1.01.02.03

Financial investments at amortized cost

492,194

518,553

1.01.03

Trade receivables

  2,205,944

  2,047,931

1.01.04

Inventory

  5,465,046

  5,282,750

1.01.08

Other current assets

  1,789,003

  1,672,996

1.01.08.03

Others

  1,789,003

  1,672,996

1.01.08.03.01

Recoverable taxes

  1,388,468

  1,282,415

1.01.08.03.02

Prepaid expenses

208,868

107,428

1.01.08.03.03

Dividends receivable

  44,554

  44,554

1.01.08.03.04

Derivative financial instruments

  4,579

  1,364

1.01.08.03.05

Others

142,534

237,235

1.02

Non-current assets

  38,337,492

  38,143,471

1.02.01

Long-term assets

  7,558,528

  7,626,577

1.02.01.03

Financial investments at amortized cost

121,027

  95,719

1.02.01.07

Deferred taxes assets

  2,475,496

  2,473,304

1.02.01.10

Other non-current assets

  4,962,005

  5,057,554

1.02.01.10.03

Recoverable taxes

  1,956,660

  2,119,940

1.02.01.10.04

Judicial deposits

333,120

328,371

1.02.01.10.05

Prepaid expenses

129,562

126,213

1.02.01.10.06

Receivable from related parties

  1,365,520

  1,274,972

1.02.01.10.07

Others

  1,177,143

  1,208,058

1.02.02

Investments

  3,600,997

  3,584,169

1.02.02.01

Equity interest

  3,438,752

  3,482,974

1.02.02.02

Investment Property

162,245

101,195

1.02.03

Property, plant and equipment

  19,857,633

  19,700,944

1.02.03.01

Property, plant and equipment in operation

  19,392,387

  19,228,599

1.02.03.02

Right of use in leases

465,246

472,345

1.02.04

Intangible assets

  7,320,334

  7,231,781

 

Page 12


 
 

CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

 

Quarterly Financial Information - March 31, 2020 – CIA SIDERURGICA NACIONAL

Version: 1

 

 

Consolidated Financial Statements / Balance Sheet – Liabilities

   

(R$ thousand)

     
       

Code

Description

Current Quarter 03/31/2020

Previous Year 12/31/2019

2

Total Liabilities

52,723,083

50,869,276

2.01

Current liabilities

11,970,831

11,619,957

2.01.01

Payroll and related taxes

  308,501

  317,510

2.01.02

Trade payables

3,451,945

3,012,654

2.01.03

Tax payables

  486,766

  541,027

2.01.04

Borrowings and financing

5,314,667

5,125,843

2.01.05

Other payables

2,325,921

2,526,444

2.01.05.02

Others

2,325,921

2,526,444

2.01.05.02.04

Dividends and interests on shareholder´s equity

13,116

13,252

2.01.05.02.05

Advances from clients

  809,173

  787,604

2.01.05.02.06

Trade payables – Drawee risk

  937,576

1,121,312

2.01.05.02.07

Lease liabilities

31,807

35,040

2.01.05.02.09

Other payables

  534,249

  569,236

2.01.06

Provisions

83,031

96,479

2.01.06.01

Provision for tax, social security, labor and civil risks

83,031

96,479

2.02

Non-current liabilities

35,345,710

27,887,387

2.02.01

Borrowings and financing

30,305,393

22,841,193

2.02.02

Other payables

2,426,514

2,493,702

2.02.02.02

Others

2,426,514

2,493,702

2.02.02.02.03

Advances from clients

1,699,617

1,845,248

2.02.02.02.04

Lease liabilities

  434,640

  439,350

2.02.02.02.05

Derivative financial instruments

94,909

  -

2.02.02.02.06

Other payables

  197,348

  209,104

2.02.03

Deferred taxes assets

  620,227

  589,539

2.02.04

Provisions

1,993,576

1,962,953

2.02.04.01

Provision for tax, social security, labor and civil risks

  536,751

  526,768

2.02.04.02

Other provisions

1,456,825

1,436,185

2.02.04.02.03

Provision for environmental liabilities and decommissioning of assets

  544,641

  524,001

2.02.04.02.04

Pension and healthcare plan

  912,184

  912,184

2.03

Shareholders’ equity

5,406,542

11,361,932

2.03.01

Share Capital

4,540,000

4,540,000

2.03.02

Capital reserves

32,720

32,720

2.03.04

Profit reserves

4,431,200

4,431,200

2.03.04.01

Legal reserve

  278,576

  278,576

2.03.04.02

Earnings reserves

4,210,888

4,210,888

2.03.04.09

Treasury shares

(58,264)

(58,264)

2.03.05

Accumulated profit/(losses)

(1,360,851)

  -

2.03.08

Other comprehensive income

(3,473,059)

1,170,624

2.03.09

Profit attributable to the non-controlling interests

1,236,532

1,187,388

         

 

 

Page 13


 
 

CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

 

Quarterly Financial Information - March 31, 2020 – CIA SIDERURGICA NACIONAL

Version: 1

 

 

 

Consolidated Financial Statements / Statements of Income

   

(R$ thousand)

   
       

Code

Description

Year to date 01/01/2020 to 03/31/2020

YTD previous year 01/01/2019 to 03/31/2019

3.01

Revenues from sale of goods and rendering of services

5,334,653

6,005,466

3.02

Costs from sale of goods and rendering of services

  (4,017,707)

  (4,021,495)

3.03

Gross profit

1,316,946

1,983,971

3.04

Operating (expenses)/income

  (1,221,313)

(803,252)

3.04.01

Selling expenses

(390,915)

(573,484)

3.04.02

General and administrative expenses

(119,055)

(120,181)

3.04.04

Other operating income

102,689

228,952

3.04.05

Other operating expenses

(768,924)

(364,372)

3.04.06

Equity in results of affiliated companies

(45,108)

25,833

3.05

Profit before financial income (expenses) and taxes

95,633

1,180,719

3.06

Financial income (expenses)

  (1,201,138)

(635,099)

3.06.01

Financial income

65,131

111,314

3.06.02

Financial expenses

  (1,266,269)

(746,413)

3.06.02.01

Net exchange differences over financial instruments

364,882

(113,564)

3.06.02.02

Financial expenses

  (1,631,151)

(632,849)

3.07

Profit (loss) before taxes

  (1,105,505)

545,620

3.08

Income tax and social contribution

(206,204)

(458,857)

3.09

Profit (loss) from continued operations

  (1,311,709)

86,763

3.11

Consolidated Profit (loss) for the year

  (1,311,709)

86,763

Page 14


 
 

CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

 

Quarterly Financial Information - March 31, 2020 – CIA SIDERURGICA NACIONAL

Version: 1

 

 

 

3.11.01

Profit attributable to the controlling interests

  (1,360,851)

  (7,572)

3.11.02

Profit attributable to the non-controlling interests

49,142

94,335

3.99

Earnings per share – (Reais / Share)

 -

  -

3.99.01

Basic earnings per share

  -

  -

3.99.01.01

Common shares

  (0.98604)

  (0.00551)

3.99.02

Diluted earnings per share

  -

  -

3.99.02.01

Common shares

  (0.98604)

  (0.00551)

Page 15


 
 

CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

 

Quarterly Financial Information - March 31, 2020 – CIA SIDERURGICA NACIONAL

Version: 1

 

 

Consolidated Financial Statements / Statement of Comprehensive Income

   

(R$ thousand)

     
       

Code

Description

Year to date 01/01/2020 to 03/31/2020

YTD previous year 01/01/2019 to 03/31/2019

4.01

Consolidated profit (loss) for the year

(1,311,709)

86,763

4.02

Other comprehensive income

(4,643,681)

  150,183

4.02.01

Actuarial gains over pension plan of subsidiaries, net of taxes

33

30

4.02.02

Cumulative translation adjustments for the year

  380,042

(21,804)

4.02.04

Losses in cash flow hedge

(5,390,043)

(18,440)

4.02.05

Cash flow hedge reclassified to income upon realization

  364,818

  184,217

4.02.06

(Loss)/gain on hedge of net investment in foreign operations.

1,469

6,180

4.03

Consolidated comprehensive income for the year

(5,955,390)

  236,946

4.03.01

Profit attributable to the controlling interests

(6,004,534)

  142,611

4.03.02

Profit attributable to the non-controlling interests

49,144

94,335

 

 

 

 

Page 16


 
 

CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

 

Quarterly Financial Information - March 31, 2020 – CIA SIDERURGICA NACIONAL

Version: 1

 

Consolidated Financial Statements / Statements of Cash Flows – Indirect Method

   

(R$ thousand)

     
       

Code

Description

Year to date 01/01/2020 to 03/31/2020

YTD previous year 01/01/2019 to 03/31/2019

6.01

Net cash from operating activities

  466,933

  1,185,970

6.01.01

Cash from operations

  1,166,186

  1,018,203

6.01.01.01

Profit attributable to the controlling interests

(1,360,851)

(7,572)

6.01.01.02

Results of non-controlling shareholders

  49,142

  94,335

6.01.01.03

Financial charges in borrowing and financing raised

  470,990

  465,928

6.01.01.04

Financial charges in borrowing and financing granted

  (11,481)

  (13,946)

6.01.01.05

Charges on lease liabilities

  13,056

  4,957

6.01.01.06

Equity in results of affiliated companies

  45,108

  (25,833)

6.01.01.07

Deferred taxes assets

  (11,351)

  89,039

6.01.01.08

Provision for tax, social security, labor, civil and environmental risks

(8,685)

  (69,853)

6.01.01.09

Monetary and exchange variations, net

  522,571

  239,582

6.01.01.10

Write-off of property, plant and equipment and Intangible assets

  1,400

  13,712

6.01.01.11

Provision for environmental liabilities and decommissioning of assets

  20,640

  7,592

6.01.01.12

Updated shares – Fair value through profit or loss

  962,561

  (127,653)

6.01.01.13

Depreciation, amortization and depletion

  437,507

  328,070

6.01.01.14

Accrued/(reversal) for consumption and services

  37,158

  8,853

6.01.01.17

Other provisions

(1,579)

  10,992

6.01.02

Changes in assets and liabilities

  (699,253)

  167,767

6.01.02.01

Trade receivables - third parties

  (89,849)

  (713,057)

6.01.02.02

Trade receivables - related party

  (31,572)

  (92,283)

6.01.02.03

Inventory

  (13,512)

  (653,465)

6.01.02.04

Receivables - related parties/dividends

-

  447

6.01.02.05

Tax assets

  57,227

  (41,211)

6.01.02.06

Judicial deposits

(4,749)

  (11,569)

6.01.02.08

Trade payables

  341,567

  (170,461)

6.01.02.09

Trade payables – Drawee risk

  (183,736)

  235,181

6.01.02.10

Payroll and related taxes

  (14,420)

  14,014

6.01.02.11

Taxes in installments – REFIS

  (61,612)

  282,973

Page 17


 
 

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Quarterly Financial Information - March 31, 2020 – CIA SIDERURGICA NACIONAL

Version: 1

 

6.01.02.12

Payables to related parties

  (20,572)

  (30,173)

6.01.02.13

Advances from clients

  (130,568)

  1,935,831

6.01.02.14

Interest paid

  (511,242)

  (590,621)

6.01.02.16

Others

  (36,215)

  2,161

6.02

Net cash investment activities

  (404,851)

  (220,750)

6.02.02

Purchase of property, plant and equipment and intangible assets

  (353,698)

  (313,579)

6.02.04

Receipt/(payment) in derivative transactions

-

  (372)

6.02.07

Intercompany loans granted

  (82,089)

  (40,643)

6.02.08

Intercompany loans received

  3,022

  16,796

6.02.09

Financial Investments, net of redemption

  27,914

  117,048

6.03

Net cash used in financing activities

  2,157,127

  (514,817)

6.03.01

Borrowings and financing raised

  4,553,970

  2,465,845

6.03.02

Transactions cost - Borrowings and financing

(9,131)

  (28,810)

6.03.03

Amortization of borrowings and financing

(2,363,666)

(2,939,145)

6.03.04

Dividends and interest on shareholder’s equity

  (136)

-

6.03.05

Amortization of leases

  (23,910)

  (12,707)

6.04

Exchange rate on translating cash and cash equivalents

  (27,026)

  3,670

6.05

Increase (decrease) in cash and cash equivalents

  2,192,183

  454,073

6.05.01

Cash and equivalents at the beginning of the year

  1,088,955

  2,248,004

6.05.02

Cash and equivalents at the end of the year

  3,281,138

  2,702,077

Page 18


 
 

CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

 

Quarterly Financial Information - March 31, 2020 – CIA SIDERURGICA NACIONAL

Version: 1

 

 

Consolidated Financial Statements / Statements of Changes in Equity - 01/01/2020 to 03/31/2020

(R$ thousand)

               
                   

Code

Description

Paid-in capital

Capital reserve, granted options and treasury shares

Earnings reserve

Retained earnings (accumulated losses)

Other comprehensive income

Shareholders’ equity

Non-controlling interests

Shareholders’ equity

5.01

Opening balances

4,540,000

32,720

  4,431,200

  -

  1,170,624

  10,174,544

  1,187,388

  11,361,932

5.03

Adjusted opening balances

4,540,000

32,720

  4,431,200

  -

  1,170,624

  10,174,544

  1,187,388

  11,361,932

5.05

Total comprehensive income

  -

  -

-

(1,360,851)

(4,643,683)

(6,004,534)

  49,144

(5,955,390)

5.05.01

(Loss) profit for the year

  -

  -

-

(1,360,851)

-

(1,360,851)

  49,142

(1,311,709)

5.05.02

Other comprehensive income

  -

  -

-

  -

(4,643,683)

(4,643,683)

  2

(4,643,681)

5.05.02.04

Translation adjustments for the year

  -

  -

-

  -

  380,042

  380,042

-

  380,042

5.05.02.06

Actuarial (loss)/gain on pension plan, net of taxes

  -

  -

-

  -

  31

  31

  2

  33

5.05.02.07

(Loss) / gain on cash flow hedge accounting, net of taxes

  -

  -

-

  -

(5,025,225)

(5,025,225)

-

(5,025,225)

5.05.02.08

(Loss) / gain on hedge of net investment in foreign operations

  -

  -

-

  -

  1,469

  1,469

-

  1,469

5.07

Closing balance

4,540,000

32,720

  4,431,200

(1,360,851)

(3,473,059)

  4,170,010

  1,236,532

  5,406,542

 

Page 19


 
 

CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

 

Quarterly Financial Information - March 31, 2020 – CIA SIDERURGICA NACIONAL

Version: 1

 

 

Consolidated Financial Statements / Statements of Changes in Equity - 01/01/2019 to 03/31/2019

(R$ thousand)

               
                   

Code

Description

Paid-in capital

Capital reserve, granted options and treasury shares

Earnings reserve

Retained earnings (accumulated losses)

Other comprehensive income

Shareholders’ equity

Non-controlling interests

Shareholders’ equity

5.01

Opening balances

4,540,000

  32,720

3,064,827

  -

1,065,188

8,702,735

1,310,705

10,013,440

5.03

Adjusted opening balances

4,540,000

  32,720

3,064,827

  -

1,065,188

8,702,735

1,310,705

10,013,440

5.05

Total comprehensive income

  -

  -

  -

  (7,572)

  150,183

  142,611

  94,335

  236,946

5.05.01

(Loss) profit for the year

  -

  -

  -

  (7,572)

  -

  (7,572)

  94,335

  86,763

5.05.02

Other comprehensive income

  -

  -

  -

  -

  150,183

  150,183

  -

  150,183

5.05.02.04

Translation adjustments for the year

  -

  -

  -

  -

(21,804)

(21,804)

  -

(21,804)

5.05.02.06

Actuarial (loss)/gain on pension plan, net of taxes

  -

  -

  -

  -

  30

  30

  -

  30

5.05.02.07

(Loss) / gain on cash flow hedge accounting, net of taxes

  -

  -

  -

  -

  165,777

  165,777

  -

  165,777

5.05.02.08

(Loss) / gain on hedge of net investment in foreign operations

  -

  -

  -

  -

6,180

6,180

  -

6,180

5.06

Internal changes in shareholders’ equity

  -

  -

  -

  -

  -

  -

  2

  2

5.06.04

Non-controlling interests in subsidiaries

  -

  -

  -

  -

  -

  -

  2

  2

5.07

Closing balance

4,540,000

  32,720

3,064,827

  (7,572)

1,215,371

8,845,346

1,405,042

10,250,388

Page 20


 
 

CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

 

Quarterly Financial Information - March 31, 2020 – CIA SIDERURGICA NACIONAL

Version: 1

 

 

Consolidated Financial Statements / Statements of Value Added

 

(R$ thousand)

   
       

Code

Description

Year to date 01/01/2020 to 03/31/2020

YTD previous year  01/01/2019 to 03/31/2019

7.01

Revenues

  6,143,475

  6,948,101

7.01.01

Sales of products and rendering of services

  6,137,834

  6,795,881

7.01.02

Other revenues

6,962

131,521

7.01.04

Allowance for (reversal of) doubtful debts

  (1,321)

20,699

7.02

Raw materials acquired from third parties

(4,758,610)

(4,677,204)

7.02.01

Cost of sales and services

(3,776,787)

(3,742,381)

7.02.02

Materials, electric power, outsourcing and other

  (961,472)

  (893,674)

7.02.03

Impairment/recovery of assets

  (20,351)

  (41,149)

7.03

Gross value added

  1,384,865

  2,270,897

7.04

Retentions

  (436,293)

  (328,070)

7.04.01

Depreciation, amortization and depletion

  (436,293)

  (328,070)

7.05

Wealth created

948,572

  1,942,827

7.06

Value added received

698,088

95,823

7.06.01

Equity in results of affiliated companies

  (45,108)

25,833

7.06.02

Financial income

65,131

111,314

7.06.03

Others

678,065

  (41,324)

7.06.03.01

Others and exchange gains

678,065

  (41,324)

7.07

Wealth for distribution

  1,646,660

  2,038,650

7.08

Wealth distributed

  1,646,660

  2,038,650

7.08.01

Personnel

584,191

610,988

7.08.01.01

Salaries and wages

432,137

457,968

7.08.01.02

Benefits

108,569

108,793

7.08.01.03

Severance payment (FGTS)

43,485

44,227

7.08.02

Taxes, fees and contributions

424,401

631,219

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7.08.02.01

Federal

352,361

551,594

7.08.02.02

State

63,146

74,681

7.08.02.03

Municipal

8,894

4,944

7.08.03

Remuneration on third-party capital

  1,949,777

709,680

7.08.03.01

Interest

  1,631,151

632,849

7.08.03.02

Rental

5,441

5,342

7.08.03.03

Others

313,185

71,489

7.08.03.03.01

Others and exchange losses

313,185

71,489

7.08.04

Remuneration on Shareholders' capital

(1,311,709)

86,763

7.08.04.03

Retained earnings (accumulated losses)

(1,360,851)

  (7,572)

7.08.04.04

Non-controlling interests in retained earnings

49,142

94,335

       

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Comments on the Company’s Consolidated Performance

São Paulo, May 23, 2020

 

Results for the First Quarter of 2020

 

Companhia Siderúrgica Nacional (“CSN”) (B3 S.A. – Brasil, Bolsa e Balcão: CSNA3) (NYSE: SID) announces its results for the first quarter of 2020 (1Q20) in Brazilian Reais,  in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), and with Brazilian accounting practices, which are fully convergent with international accounting standards, issued by the Accounting Pronouncements Committee (CPC) and approved by the Brazilian Securities and Exchange Commission (CVM), pursuant to CVM Instruction 485 of 09/01/10.

All comments presented herein refer to the Company’s consolidated results for the first quarter of 2020 (1Q20) and comparisons refer to the fourth quarter of 2019 (4Q19) and the first quarter of 2019 (1Q19). The Real/U.S. dollar exchange rate was R$5.1987 on 03/31/2020, R$4.0307 on 12/31/2019 and R$3.8967 on 03/31/2019.

 

Operating and Financial Highlights in 1Q20

 

·        Adjusted EBITDA reached R$1,331 million in 1Q20, even with a lower iron ore production.

·        Adjusted Free Cash Flow reached R$506MM, reflecting actions for liquidity protection.

·        Iron ore production totaled 5.9 million tons in the 1Q20, 39% lower YoY, due to heavy rains in the region and delay in new mining fronts.

·        Steel Sales Volume reached 1,140 thousand tons, 2% higher than in 4Q19. Steel EBITDA showed sequential growth of 68%, totalling R$298MM.

·        Net debt/EBITDA reached 4.78x, or 1.01x higher than 4Q19, due to strong exchange rate variation.

·        New Bonds issued due 2028 in the amount of US$1.0 billion, providing significant increase in debt’s maturities.

 

Highlights

1Q19

4Q19

1Q20

 

 

Variation

1Q20

x

1Q19

1Q20

x

4Q19

 

 

 

Steel Sales (thousand tons)

1,175

1,117

1,140

 

 

(3%)

2%

 

- Domestic Market

811

819

775

 

 

(4%)

(5%)

 

- Subsidiaries Abroad

340

283

356

 

 

5%

26%

 

- Exports

24

14

8

 

 

(64%)

(41%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Iron Ore Sales (thousand tons)

8,859

10,334

5,609

 

 

(37%)

(46%)

 

-  Domestic Market

1,169

953

1,806

 

 

(7%)

14%

 

-  Exports

7,690

9,382

4,524

 

 

(41%)

(52%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Results (R$ millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Revenue

6,005

6,524

5,335

 

 

(11%)

(18%)

 

Gross Profit

1,948

2,108

1,317

 

 

(32%)

(38%)

 

Adjusted EBITDA¹

1,724

1,580

1,331

 

 

(23%)

(16%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Debt²

25,772

27,360

32,804

 

 

27%

20%

 

Adjusted Cash and Cash Equivalents²

3,601

1,857

4,129

 

 

15%

122%

 

Net Debt / Adjusted EBITDA

4.07x

3.77x

4.78x

 

 

0.71x

1.01x

 

 

¹ Adjusted EBITDA is calculated based on net profit/loss, plus depreciation and amortization, income tax, net financial result, share of profit (loss) of investees and other operating income (expenses), and includes the proportionate share of EBITDA of jointly owned subsidiaries MRS Logística and CBSI. Adjusted EBITDA includes stakes of 100% in CSN Mineração, 37.27% in MRS and 50% in CBSI (until November/2019).

² Adjusted net debt and adjusted cash and cash equivalents includes the stakes of 100% in CSN Mineração, 37.27% in MRS and 50% in CBSI (until November/2019), excluding forfaiting and drawee risk operations.

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CSN’s Consolidated Result

 

·        Net revenue in 1Q20 totaled R$5,335 million, 11% and 8% less than 1Q19 and 4Q19, respectively. The decrease in iron ore sales volume was due to the heavy rainfall and delay in new mining fronts.

 

·         In 1Q20, cost of goods sold totaled R$4,018 million, 9.3% lower than the previous quarter.

 

·        In 1Q20, gross profit reached R$1,317 million, a 34% contraction compared to 1Q19. Gross margin decreased 8.3 p.p. versus 1Q19, to 24.7% in 1Q20, due to a punctual drop in iron ore volumes.

 

·        In 1Q20, selling, general and administrative expenses totaled R$510 million, 26.5% lower YoY, while net revenue, in the same comparison basis, reached 11%. Selling expenses strongly decreased by 32% in 1Q20, while general and administrative expenses dropped 2.8% in the same period, corresponding 2.1% of net revenue, stable when compared to 1Q19.

 

·        Other operating income and expenses was negative by R$666MM, mainly due to cash flow hedging and to idle capacity in mining equipment.

 

·        Financial result was negative by R$1,201MM, impacted by the exchange rate variation and Usiminas’ shares drop providing negative results without cash impact in the amount of R$962MM.

 

 

Financial Result (R$ million)

1Q19

4Q19

1Q20

Financial Result - IFRS

         (635)

           (298)

        (1,201)

Financial Revenue

           111

               68

           65

Financial Expenses

         (746)

           (366)

        (1,266)

Financial Expenses (ex-exchange rate variation)

         (633)

           (624)

           (1,631)

Result with Exchange Rate Variation

         (113)

             258

           365

Monetary and Exchange Rate Variation

         (125)

             605

        (4,928)

Hedge Accounting

             12

           (355)

          5,389

Derivative Result

               0

                  8

              (96)

 

 

·        Equity result of affiliated companies was negative by R$45 million in 1Q20 versus a positive amount of R$7 million in 4Q19, mainly due to the negative result from MRS caused by a strong reduction of cargoes with heavy rains above historical average.

 

 

Equity Results of Affiliated Companies
(R$ million)

1Q19

4Q19

1Q20

MRS Logística

          43

          16

  (34)

CBSI

             1

            2

     -  

TLSA

           (6)

           (2)

    (6)

Arvedi Metalfer BR

            -  

           (1)

    (1)

Eliminações

         (12)

           (8)

    (4)

Equity in Results of Affiliated companies

          26

            7

  (45)

 

 

 

 

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·        In 1Q20, the Company registered a net loss of R$1,312 million, versus a net gain of R$87 million in 1Q19, mainly due to non-operational issues and non-cash such as hedge accounting and market value loss in Usiminas shares.

 

Adjusted EBITDA (R$ million)

1Q19

4Q19

1Q20

Variation

1Q20

x

1Q19

1Q20

X

4Q19

Net Profit /(Loss) for the period

87

1,134

(1,312)

(1,608%)

(216%)

(-) Depreciation

306

432

415

36%

(4%)

(+) Income tax and social contribution

459

(474)

206

(55%)

(143%)

(+) Net financial result

635

298

1,201

89%

303%

EBITDA (ICVM 527)

1,487

1,390

511

(66%)

(63%)

(+) Other Operating Income/Expenses

135

103

666

393%

547%

(+) Equity in Results of Affiliated Companies

(26)

(7)

45

(273%)

(743%)

(-) Proportional EBITDA of Jointly Owned Subsidiaries

127

94

109

(14%)

16%

Adjusted EBITDA

1,724

1,580

1,331

(23%)

(16%)

*The Company discloses adjusted EBITDA excluding interests in investments and other operating income (expenses) with the understanding that these items should not be considered when calculating recurring operating cash flow.

 

·  Adjusted EBITDA reached R$1,331 million in 1Q20, versus R$1,580 million in 4Q19, due to low iron ore production as a result of severe rain, although partially compensated by the gradual evolution of steel’s result. Adjusted EBITDA margin reached 24.1%, or 0.6 p.p. higher in the same comparison basis.

 

 

¹ Adjusted EBITDA margin is calculated as the ratio between adjusted EBITDA and adjusted net revenue, which considers stakes of 100% in CSN Mineração and 37.27% in MRS and 50% in CBSI (until November/19).

 

Adjusted Free Cash Flow¹

 

Adjusted Free Cash Flow in 1Q20 reached R$506MM, negatively influenced by lower cash generation measured by EBITDA in mining segment, due to severe rain in the period.

 

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¹ Adjusted free cash flow is calculated from adjusted EBITDA less EBITDA of joint ventures, Capex, Income tax, financial result and variation of working capital ¹, excluding the impact of Glencore’s prepay.

²Adjusted Working Capital comprises the variation in NWC (-R$ 187 million), plus variation in long-term asset and liability accounts (+ R$ 192 million, mainly reclassification of PIS / COFINS credits), and adjusted by following non-cash launches in the period: (i) Receipt of Property in Payment (-R$ 61 million), and (ii) Recognition of Tax Credits (+ R$ 104 million).

 

Debt

 

On 03/31/2020, consolidated net debt was R$32,804 million, while net debt/EBITDA, reached 4.78x, or 1.01x higher than in 4Q19. Debt evolution in the quarter was impacted by the exchange rate variation, with no cash impact, considering a longer duration of debt in dollars.

 

 


In 1Q20, the Company issued new Bonds due in 2028 in the amount of US$1.0 billion, obtaining an increase in its debt duration. Additionally, the liquidity support obtained solves the Company’s short-term financial obligations.

 

 

 

 

 

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Foreign Exchange Exposure

Net FX exposure on the consolidated balance sheet on 03/31/2020 was US$374 million, as shown in the table below.

 

Foreign Exchange Exposure

03/31/2019

12/31/2019

03/31/2020

(in US$ ‘000)

IFRS

IFRS

IFRS

Cash

                                      99

105

293

Accounts Receivable

                                   486

346

323

Other

                                         7

4

3

Total Assets

                                   593

455

619

Loans and Financing

                    (4,053)

(4,097)

(4,730)

Trade Payables

                        (125)

(69)

(87)

Other Payables

                              (3)

(3)

(3)

Total Liabilities

                    (3,181)

(4,169)

(4,819)

 

 

 

 

Natural Foreign Exchange Exposure (Assets - Liabilities)

                    (2,589)

(3,714)

(4,200)

Cash Flow Hedge Accounting

1,862 

2,531

4,641

Swap CDI x Dollar

-                     

(67)

(67)

Net Foreign Exchange Exposure

                    (1,726)

(1,250)

374

 

Hedge Accounting adopted by CSN correlates projected export in dollars with scheduled debt payments in the same currency. Therefore, the exchange rate variation of the dollar-denominated debt is temporarily accounted for under shareholders’ equity, being recorded in the income statement when dollar revenues from exports are received.

 

Investments

 

A total of R$354 million were invested in 1Q20, due to the slowdown in expenses in several sustaining projects in the steel segment, within the context of the stoppage of blast furnace #3 which occurred during 2Q19. In mining, investments were related mostly with operational continuity.

 

Investments (R$ million)

2018

1Q19

2Q19

3Q19

4Q19

2019

1Q20

 

 

 

Steel

637

160

212

405

576

1,353

170

 

 

 

Mining

505

118

190

165

174

647

132

 

 

 

Other

175

35

44

40

96

215

51

 

 

 

Total Investments - IFRS

1,318

314

446

610

846

2,216

354

 

 

 

 

Net Working Capital

 

Net Working Capital invested in the business totaled R$3,826 million in 1Q20, raising the financial cycle in 8 days when compared to 4Q19, due to higher accounts receivable and inventory balance, but partially offset by trade payables.

 

Net Working Capital analysis applied to the business disregard Glencore’s advance, as shown in the table below:

 

Net Working Capital (R$ million)

1Q19

4Q19

1Q20

 

Variation

 

1Q20

x

1Q19

1Q20

X

4Q19

Assets

10,293

8,997

9,451

 

(842)

454

Accounts Receivable

2,838

2,048

2,206

 

(632)

158

Inventories

5,663

5,283

5,465

 

(198)

182

Prepaid Taxes

764

828

889

 

125

61

Credit from PIS/COFINS

658

455

500

 

(158)

45

Anticipated Expenses

194

204

209

 

15

5

Dividends Receivable

45

44

44

 

(2)

-

Other Assets NWC¹

131

137

139

 

9

3

Liabilities

5,696

5,359

5,625

 

(71)

267

Trade Payables

3,528

4,134

4,390

 

862

255

Payroll and Related Taxes

415

429

461

 

46

(18)

Taxes Payable

181

222

271

 

89

49

Advances from Customers

106

104

110

 

4

77

Provision for Consumption

298

162

186

 

(112)

24

Other Liabilities NWC²

1,168

258

208

 

(960)

(50)

Net Working Capital

4,596

3,639

3,826

 

(771)

187

                     

Average Term (days)

1Q19

4Q19

1Q20

 

Variation

 

1Q20

x

1Q19

1Q20

X

4Q19

Receivables

37

25

32

 

(5)

7

Payables

76

84

95

 

19

11

Inventories³

109

92

104

 

(5)

12

Financial Cycle

70

33

41

 

(29)

8

¹Other Assets NWC: Consider: Advances and other Accounts Receivable

²Other Liabilities NWC: Consider Other payable accounts, payable dividends, installment taxes and other provisions.

³ Invetories term average term doesn’t consider Warehouse.

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Results by Business Segment

 

The Company maintains integrated operations in five business segments: Steel, Mining, Logistics, Energy and Cement. The main assets and/or companies comprising each segment are presented below:

 

 

 

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1Q20 Results

Steel

Mining

Port Logistics

Railway Logistics

Energy

Cement

Corporate Expenses/ Eliminations

Consolidated

(R$ million)

               

Net Revenue

3,542

1,646

75

282

42

146

(398)

5,335

Domestic Market

2,511

263

75

282

42

146

(581)

2,738

Foreign Market

1,031

1,382

-

-

-

-

184

2,597

COGS

(3,237)

(823)

(49)

(270)

(29)

(145)

537

(4,018)

Gross Profit

305

823

25

12

13

1

139

1,317

SG&A

(214)

(46)

(10)

(26)

(8)

(23)

(183)

(510)

Depreciation

207

145

8

124

4

36

(110)

415

Proportional EBITDA of jointly owned subsidiaries

-

 

-

-

-

-

109

109

Adjusted EBITDA

298

921

23

111

9

14

(45)

1,331

4Q19 Results

Steel

Mining

Port Logistics

Railway Logistics

Energy

Cement

Corporate Expenses/ Eliminations

Consolidated

(R$ million)

               

Net Revenue

3,349

2,522

55

292

103

144

57

6,524

Domestic Market

2,529

242

55

292

103

144

(606)

2,761

Foreign Market

820

2,280

-

-

-

-

663

3,763

COGS

(3,171)

(1,323)

(39)

(260)

(84)

(141)

590

(4,429)

Gross Profit

178

1,199

16

32

20

3

646

2,095

SG&A

(230)

(43)

(9)

(32)

(7)

(24)

(696)

(1,041)

Depreciation

228

134

7

100

4

43

(85)

432

Proportional EBITDA of jointly owned subsidiaries

-

-

-

-

-

-

94

94

Adjusted EBITDA

177

1,290

15

100

17

22

(41)

1,580

1Q19 Results

Steel

Mining

Port Logistics

Railway Logistics

Energy

Cement

Corporate Expenses/ Eliminations

Consolidated

(R$ million)

               

Net Revenue

3,605

2,079

52

335

70

120

(255)

6,005

Domestic Market

2,567

245

52

335

70

120

(629)

2,760

Foreign Market

1,038

1,834

-

-

-

-

374

3,245

COGS

(3,222)

(870)

(47)

(261)

(61)

(138)

577

(4,021)

Gross Profit

383

1,209

5

74

9

(18)

322

1,984

SG&A

(197)

(42)

(9)

(27)

(7)

(21)

(390)

(694)

Depreciation

157

92

7

92

4

32

(79)

306

Proportional EBITDA of jointly owned subsidiaries

-

-

-

-

-

-

127

127

Adjusted EBITDA

344

1,259

3

138

6

(7)

(19)

1,724

 

Steel Results

According to the World Steel Association (WSA), global crude steel production totaled 443.0 million tons (Mton) in 1Q20, 1.4% lower YoY. Asia produced 315.2 Mton, drop of 0.3%, while the European Union and North America reduced by 10% and 4.0%, respectively YoY.

·      In 1Q20, CSN’s slab production totaled 884 thousand tons, 14% higher than in 4Q19, normalizing production after the revamp of blast furnace #3 in 2H19. 

 

Steel Production

1Q19

4Q19

1Q20

Variation

(thousand tons)

1Q20

x

1Q19

1Q20

x

4Q19

Total Slabs (UPV + Third parties)

1,040

934

943

                 (9%)

                   1%

Slab Production

830

775

884

                   7%

                14%

Third-party Slabs

210

160

58

               (72%)

               (64%)

Total Flat Rolled Products

927

845

928

                   -

                10%

Total Long Rolled Products

51

61

51

                     -  

               (17%)

 

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In 1Q20, total sales reached 1,140 thousand tons, 2% higher compared to 4Q19, mainly due to higher sales in the foreign market. Domestic sales started to slowdown in the third week of March, due to the COVID-19 pandemic effects in some important segments.

 

 

·   

In 1Q20, volume of steel sold in the domestic markettotaled 775 thousand tons, 5% less than 4Q19. Of this total, 720 thousand tons are flat steel and 55 thousand tons were long steel. According to the Brazilian Steel Institute (IABr), apparent consumption reached 5.1 million tons, decreasing 0.6% versus 1Q19. Brazilian crude steel production reached 8 million tons, decreasing 7% YoY.

 
     
·   

In foreign markets,sales in 1Q20 totaled 365 thousand tons, 22% higher QoQ, due to seasonality at SWT/Lusosider/LLC. In this period, 8 thousand tons were exported directly, and 356 thousand tons were sold through subsidiaries overseas, with 45 thousand tons by LLC, 221 thousand tons by SWT, and 90 thousand tons by Lusosider.

 

 

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·        In 1Q20, CSN maintained a high share of coated products of its total sales volume, following the strategy of adding more value to its product mix. Sales of coated products such as galvanized and tin plates accounted for 49% of flat steel sales, considering all the markets in which the Company operates. In the domestic market, coated products maintained 43% of flat steel sales in 1Q20.

According to ANFAVEA (National Association of Automobile Manufacturers), in 1Q20, the production of automobiles, light commercial vehicles, trucks and buses reached 585,889 thousand units, decreasing 16% YoY. Exports recorded a lower performance, totaling sales of 88,998 thousand vehicles, a 14.9% reduction in volume YoY.

 

According to ABRAMAT (Construction Material Manufacturers’ Association), sales of construction materials increased 2.4% in 1Q20 on a YoY basis.

 

According to IBGE (Brazilian Institute of Geography and Statistics), production of home appliances increased by 11.8% in the last twelve months until March 2020, versus the same period in 2019.

 

·   

Net revenue from Steel operations reached R$3,542 million in 1Q20, 6% higher than in 4Q19. This was due to higher sales volume in the foreign market and higher prices in both, domestic and foreign markets. The average price in domestic market was 4% highercompared to the previous quarter, due to an increasing in steel prices. In the foreign market, the average price was 3% higher in the same comparison basis.

·   

Cost of goods sold increased by 2% in 1Q20 over 4Q19, totaling R$3,237 million.

·   

Slab production cost in 1Q20 reached R$2,036/t,   impacted by (1) power outage by utility company due to technical malfunction at a substation in January; (2) high humidity of raw materials impacted performance of the blast furnace in February.

·   

Since January, with production volumes stabilizing, slab cost has been positively evolving in a consistent way.

·   

Adjusted EBITDA reached R$298 million in 1Q20, 68% higher than in 4Q19, with EBITDA margin at 8.4% in 1Q20.

 

 

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CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

Quarterly Financial Information - March 31, 2020 – CIA SIDERURGICA NACIONAL

Version: 1

 

Earnning Results

 

In 1Q20, resilient steel demand in China (+1.4% YoY of gross steel production) and the prospect of an iron ore balance deficit, due to the heavy rainfall in Minas Gerais, had a lightly positive effect on prices. Within this context, iron ore reached an average price of US$89.00/dmt (Platts, Fe62%, N. China), stable when compared with the 4Q19 (US$88.61/dmt).

 

As for maritime freight, the BCI-C3 (Tubarão-Qingdao) route reached an average of US$13.79/wmt in 1Q20, 33% lower than the previous quarter, influenced by balanced supply and demand of vessels, as well as, oil prices at lower levels.

 

·        In 1Q20, iron ore production totaled 5.9 million tons, 39% lower YoY due to heavy rainfall in the region and delay in new mining fronts.

 

·        In 1Q20, sales volume reached 5.6 million tons, 37% lower YoY due to production restrictions, even with good availability of iron ore from third parties.

 

 

Mining Production Volume and Sales

1Q19

4Q19

1Q20

Variation

(thousand tons)

1Q20

x

1Q19

 

1Q20

x

4Q19

Total Production

9,719

8,859

5,942

               (39%)

 

               (33%)

Sales to UPV

1,169

953

1,086

                 (7%)

 

                14%

Volume Sold to Third Parties

7,690

9,382

4,524

               (41%)

 

               (52%)

Total Sales