On May 9, 2025, CSN Mineração (CMIN3) made headlines with the announcement of its Board of Directors approving a substantial distribution of R$ 1.3 billion in dividends and interest on equity (JCP). This decision comes on the heels of a challenging financial quarter for the company, which reported a net loss of R$ 357 million, a stark contrast to the over R$ 2 billion profit from the previous quarter.
The approved distribution includes R$ 1.09 billion allocated for interim dividends, which translates to approximately R$ 0.2007 per share, and R$ 210 million designated for interest on equity, equating to R$ 0.0387 per share. Shareholders who are registered with the company by May 12, 2025, will be eligible to receive these payments. The shares will shift to being traded 'ex-dividends' starting May 13, 2025, with the actual payments scheduled to be completed by December 31, 2025, although the exact date is yet to be confirmed by the company.
This dividend announcement is significant given the company's recent financial performance. CSN Mineração's financial results for the first quarter of 2025 (1T25) showed a net revenue of R$ 3.41 billion, which reflects a decrease of 12.7% compared to the previous quarter (4Q24). However, when compared to the same quarter last year (1T24), this figure represents a notable increase of 21.7%, buoyed by operational gains and a more favorable exchange rate.
Interestingly, the unit net revenue stood at US$ 61.96 per ton, remaining stable across comparable quarters, indicating a reduction in price volatility for iron ore. Despite these positive indicators, the cost of goods sold (COGS) rose to R$ 2.24 billion, marking a 5.3% increase from 4Q24, attributed to higher purchases of quality ore coupled with elevated freight costs.
In terms of operational efficiency, the C1 cost (the cash cost per ton, a key competitiveness indicator in mining) was reported at US$ 21.0 per ton. This figure reflects a slight increase of 2.9% compared to the previous quarter but a significant decrease of 11% from the same quarter last year, underscoring the company's improved operational efficiency.
However, the gross profit for CSN Mineração took a hit, totaling R$ 1.17 billion, which represents a 34.1% decline from 4Q24. The gross margin fell to 34.4% due to reduced dilution of fixed costs, although year-on-year comparisons showed a 28.4% increase in gross profit, along with a 1.8 percentage point rise in margin.
General and administrative expenses (SG&A) also saw an increase, totaling R$ 57.6 million, which is a 16.9% rise over 4Q24 due to specific factors, although it reflects a 21.1% decrease in the annual comparison, despite higher sales volume. Additionally, the result from equity equivalence was R$ 37 million, down 16.4% from the previous quarter, influenced by seasonal factors and reduced activity on the MRS railway.
One of the most significant impacts on CSN Mineração's financial results was the negative financial result of R$ 1.32 billion, primarily driven by the depreciation of the Brazilian real. This depreciation reduced the value in reais of the company’s cash held in dollars, which significantly impacted the overall financial performance.
Despite the challenges faced in the latest quarter, the decision to distribute dividends signals the company’s commitment to returning value to its shareholders. This move may also be seen as a strategic effort to maintain investor confidence amid fluctuating market conditions.
Looking ahead, the company aims to navigate the complexities of the global mining landscape while ensuring operational efficiency and profitability. The upcoming payments to shareholders are expected to bolster investor sentiment, especially for those who have been concerned about the recent financial downturn.
In summary, while CSN Mineração is grappling with significant financial challenges, the dividend announcement reflects a strategic commitment to its shareholders and a positive outlook on its operational capabilities. The company’s ability to balance these dividends with ongoing operational improvements will be crucial as it moves forward in an unpredictable market.
