Shares of CSN (CSNA3) opened Friday (Nov. 13) down 6% after the company reported a third-quarter 2026 net loss of R$ 1.247 billion—its largest red figure in three consecutive quarters of losses in 2026 and a sharp reversal from the R$ 76 million profit recorded in the same period last year. The problem is not merely operational: the R$ 1.88 billion EBITDA was entirely consumed by financial expenses on a debt load approaching R$ 45 billion.
CSNA3 News Today: What Did Q3 2026 Results Show?
CSN released its third-quarter 2026 financial statements on Thursday night (Nov. 12). The company posted a net loss of R$ 1.247 billion, reversing a R$ 76 million profit from Q3 2025. This marks the worst quarter of the year so far, following a R$ 773 million loss in Q2 2026 and bringing the year-to-date accumulated loss to R$ 2.58 billion—an amount close to half of the company's current shareholders' equity.
Reverses R$ 76M profit in Q3 2025; third consecutive quarter in the red
Down 43.5% year-over-year; margin fell to 17%
Up from 3.49x in Q2 2026; adjusted net debt of R$ 44.9 billion
Why Did R$ 1.88 Billion in EBITDA Turn Into a R$ 1.25 Billion Loss?
EBITDA measures operating cash generation before interest, amortization, and taxes. With the massive debt load CSN carries—adjusted net debt stands at R$ 44.9 billion—financial expenses easily outpace operational generation. In Q3 2026, the financial result was negative by R$ 1.361 billion, pressured by debt interest and the indexation of liabilities linked to price indices.
Running the math: an EBITDA of R$ 1.88 billion minus depreciation, the negative financial result of R$ 1.36 billion, and provisions and tax adjustments results in a net loss of R$ 1.25 billion. S&P's downgrade of CSN's credit rating to B− in October already anticipated this equation: interest coverage (EBITDA divided by financial expenses) has remained below 1.0 since the beginning of the year, meaning operations do not fully cover the cost of debt.
Consolidated net revenue totaled R$ 10.486 billion for the quarter, an 11.1% decline compared to Q3 2025. With revenue falling and margins contracting simultaneously, EBITDA shrank disproportionately—the adjusted EBITDA margin of 17% represents a drop of nearly 10 percentage points from the same period last year.
Mining Drove the Bulk of the Slump
Subsidiary CSN Mineração (CMIN3) was the epicenter of the deterioration. A combination of iron ore prices hovering around $92 per ton—near two-year lows—and higher maritime freight rates compressed realized unit revenue to $40.06 per ton for the quarter. The mining company's EBITDA plunged 80% year-over-year, and the subsidiary swung to a net loss of R$ 356 million in Q3 2026, compared to a profit of R$ 669 million in Q3 2025.
Production dropped further in physical volume: 9.97 million tons in Q3 2026, down 16.3% year-over-year, driven by heavy rainfall and a temporary output reduction at the Pires Plant. The company maintained solid commercial execution—selling 11.7 million tons in the quarter, above some bank estimates—but even that failed to offset the price drop. The revision of the 2026 production guidance to 39–41 million tons (down from the original 45–47 million tons) had already signaled that this physical cut would be structural for the year rather than a one-off event.
In the steel segment, EBITDA reached approximately R$ 365 million, with a 6.3% margin. Steel shipments fell 4.3% sequentially, pressured by the negative seasonality of export sales. On a consolidated basis, the steel segment's margin sits at one of the lowest levels in its historical series, reflecting cheaper iron ore eroding revenue without a proportional reduction in transformation costs. The broader sector context of falling iron ore prices in 2026 explains part of the deterioration—though CSN is more sensitive than Vale because its mining unit is smaller in scale and more intensive in fixed costs.
The Burden of Negative Free Cash Flow
Beyond the accounting loss, the quarter burned cash: free cash flow was negative by approximately R$ 3.5 billion, according to data from the earnings release. As a result, leverage climbed from 3.49x in Q2 2026 to 4.23x in Q3 2026—and this is the metric that matters most for the timeline of the divestment plan.
On November 8, CSN signed a definitive agreement to sell CSN Cimentos to China's Huaxin for an enterprise value of R$ 12.7 billion, alongside a term sheet for the sale of its European subsidiary SWT for €550 million. The catch is that both transactions remain subject to regulatory approvals—from Brazil's antitrust regulator CADE, ANEEL, and Chinese authorities—meaning debt relief will not arrive immediately. With leverage rising every quarter and cash bleeding out, the cost of time is mounting. A simple calculation: if the sale of the cement unit closes at the agreed value of R$ 12.7 billion and the full amount is applied to debt, leverage drops to the 3.2x–3.5x range (our estimate, assuming trailing twelve-month EBITDA remains stable). Still elevated, but on a different footing than today.
The Q3 2026 results do not alter the investment thesis—but they make clear that the clock is ticking. The stock was already down 52% for the year and traded at R$ 4.28 the day before; following Friday's drop, it fell to R$ 3.97, nearing its recent historical low of R$ 3.78. The turnaround thesis depends on three factors converging: the cement sale closing at its approved value, leverage stopping its upward climb, and iron ore prices holding steady without further declines. If divestments are delayed, each quarter adds more debt to a mountain that is already difficult to move. With no dividends paid over the trailing twelve months and accumulated net losses, investors have no return along the way—only a waiting game for a reversal.
What to Monitor in the Coming Months
Regulatory approval of the CSN Cimentos sale — The deal with Huaxin is signed, but remains subject to clearance by CADE, ANEEL, and Chinese authorities. If it closes on the agreed terms, debt will drop significantly. Without it, leverage will continue to climb. The company has not disclosed an official timeline; the market is looking at Q1 2027 as a reasonable horizon for closing.
Iron ore price trends — Iron ore trading around $92/t sits near two-year lows. Every $5/t drop directly impacts CSN Mineração's revenue and EBITDA, worsening consolidated leverage. Keep an eye on Chinese imports and environmental restrictions on domestic steel production, which serve as the primary short-term price benchmarks.
Q4 2026 results and cash flow — The fourth quarter tends to be seasonally stronger for domestic steel demand. If EBITDA rebounds and free cash flow returns to positive territory, leverage will stabilize before the cement sale closes. If not, the market will reassess how high leverage can climb before forcing additional corporate action—such as an equity offering, debt renegotiation, or another emergency divestment.
