Opinion on  Companhia Siderurgica Nacional (SID)     Sector: Basic Materials  >  Industry: Iron & Steel
results for the 1Q08

CSN Posts 1Q08 Net Income of R$767 Million. Net Revenue Reaches R$3.0 Billion and EBITDA Totals R$1.3 Billion
Wednesday May 7, 1:46 am ET

     -- CSN posted a 1Q08 net income of R$ 767 million, 51% up on the previous 
        quarter and flat over the 1Q07, when the Company recognized 
        non-recurring gains of R$ 255 million (net) from the transaction 
        involving the offer for all the shares of the UK-based Corus group; 
  
     -- Steel product sales volume totaled 1.4 million tones in 1Q08, a new 
        first quarter record, 17% up on the first quarter of 2007 and flat when 
        compared to 4Q07, a period when sales are traditionally higher prior to 
        the end-of-year holidays; 
  
     -- The domestic market accounted for 80% of quarterly sales volume and the 
        exports for 20%. In March 2008, the ratio of sales on the domestic 
        market, where margins are traditionally higher, over total sales volume 
        reached the record level of 84%; 
  
     -- First-quarter net revenue totaled R$ 3.0 billion, a quarterly record, 
        22% up year-on-year and slightly more than the 4Q07, when sales are 
        traditionally higher; 
  
     -- The Company recorded a 38% share of the domestic flat steel market, led 
        by tin plate, galvanized, hot-rolled and cold-rolled which posted 
        respective growth of 1%, 4%, 3% and 6% over 4Q07; 
  
     -- 1Q08 EBITDA came to R$ 1.3 billion, 26% more than in the 1Q07 and 1% 
        higher than the 4Q07, while the EBITDA margin stood at 42%, 1.5 p.p. 
        wider year-on-year and flat in quarter-over-quarter terms. In the last 
        seven years, CSN's EBITDA margin has never fallen below 40%; 
  
     -- Net debt closed the quarter at R$ 4.8 billion, R$ 1.3 billion down on 
        the 1Q07 and stable in relation to the previous quarter, even after the 
        dividend payment and investments of R$ 800 million and R$ 400 million, 
        respectively. The LTM net debt/EBITDA ratio stood at 0.93x and the 
        debt-to-equity ratio at 2.17. 
 Continue to hold this stock. 
 Sentiment: Buy 
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