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.  

CSN POSTS RECORD STEEL AND MINING REVENUE IN 3Q13

São Paulo, November 14, 2013

Companhia Siderúrgica Nacional (CSN) (BM&FBOVESPA: CSNA3) (NYSE: SID) announces today its consolidated results for the third quarter of 2013 (3Q13), which are presented in Brazilian Reais and 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 norms, issued by the Accounting Pronouncements Committee (CPC) and approved by the Brazilian Securities and Exchange Commission (CVM), pursuant to CVM Instruction 485 of September 1, 2010. The comments herein refer to the Company’s consolidated results and comparisons refer to the second quarter of 2013 (2Q13) and third quarter of 2012 (3Q12), unless otherwise stated. The Real/U.S. Dollar exchange rate on September 30, 2013, was R$2.230.

·         CSN posted record net revenue of R$4.7 billion in 3Q13, 15% up on 2Q13. Year-to-date net revenue came to R$12.4 billion, also a new record;

·         Adjusted EBITDA totaled R$1.7 billion in 3Q13, 51% up on the R$1.1 billion recorded in 2Q13, fueled by the mining and steel segments;

·         The consolidated EBITDA margin reached 31% in 3Q13, the highest quarterly figure since 4Q11;

·         Net revenue from steel operations reached the record amount of R$3.2 billion in 3Q13, 2% up on 2Q13. In the first nine months, steel revenue came to R$9.3 billion, 17% more than in 9M12 and another new record;

·         Total steel sales in 9M13 amounted to 4.7 million tonnes, while domestic steel sales totaled 3.6 million tonnes, both 8% up year-on-year and also new records;  

·         Third-quarter net revenue from mining operations reached R$1.6 billion, 67% higher than in 2Q13;

·         Iron ore shipped through Tecar, in the Port of Itaguaí, reached its highest ever volume of 8.3 million tonnes in 3Q13;

·         CSN closed the third quarter with cash and cash equivalents of R$14.4 billion.

Global economic activity points to a recovery, chiefly due to the developed economies. In the third quarter of 2013, the global manufacturing Purchasing Managers Index (PMI) reached 53.3 points, its highest level for 18 months, mainly fueled by the recovery of the Eurozone countries. September’s Eurozone PMI reached 52.2 points, the highest figure since the second quarter of 2011, led by Germany. The IMF expects global GDP growth of 2.9% in 2013 and 3.6% in 2014.

USA

Indicators in the United States are also pointing to a recovery. The manufacturing PMI, published by the Institute for Supply Management (ISM), moved up for the fourth consecutive month, reaching 56.2 points in September, versus 55.7 in the previous month. Industrial production grew by 0.6% in September, with installed capacity use of 78.3%.

Also in September, unemployment rate fell to 7.2%, 0.4 p.p. down on June, but still above pre-global-crisis levels.

On the other hand, the impasse regarding the raising of the U.S. debt ceiling had a negative impact on economic activity in the quarter.

Given this scenario, the FED opted to maintain its economic stimuli, continuing with its asset purchase program. The institution expects 2013 GDP growth of between 2.0% and 2.3%.

Europe

September’s economic activity figures in Europe also indicate a recovery, led by Germany, but with the peripheral nations also recording positive indicators. In this context, the highlight was Spain, which posted growth of 0.1% in 3Q13 over the previous three months, following nine consecutive quarters of decline.

Average unemployment rate, on the other hand, remained high in Euro zone, reaching 12.2% in September, one of the highest levels since 1995. The Greek and Spanish rates had the highest levels. The latest figures from Greece show a 26.6% rate in July, while Spain’s rate remained flat at 26.6% in September.

As a result, the European Central Bank maintained a cautious approach, signaling that it may offer a new round of long-term loans to the banks.

In the United Kingdom, third-quarter GDP edged up by 0.8% over 2Q13, which in turn recorded growth of 0.7%, with services making an important contribution. Manufacturing PMI reached 56.7 points in September, slightly below the 57.1 recorded in August, exceeding 50 points for the sixth consecutive month. Likewise year-over-year industrial output increased 2.2% in September.

Asia

The Chinese government stimuli have proved successful, as shown by the latest economic indicators. Third-quarter GDP grew by 7.8% in the last 12 months and 2.2% over 2Q13. Compound PMI climbed from 48.2 points in June to 51.2 points in September, while industrial production moved up by 10.2% in the same month. Therefore, the government has reiterated its 2013 GDP growth target of 7.5%.

Japanese GDP grew by 3.8% in the second quarter, while manufacturing PMI reached 52.5 points in September, the highest figure since February 2011. Consumer confidence also moved up in September following three consecutive reductions, reaching 54.5 points. Retail sales grew by 3.1% in September, while industrial output moved up by 1.5%. Consequently, Japan’s central bank (BoJ) raised its economic assessment of the country’s nine regions for the second consecutive month.

Brazil

In 2Q13 GDP posted growth of 1.5%, reflecting the 3.9% increase in agriculture and the 3.6% upturn in gross fixed capital formation. In the 12 months through June, year-on-year growth came to 1.9%. The Central Bank’s FOCUS report expects annual GDP growth of 2.5% in 2013.

Industrial production in September 2013 grew 0,7% over August, and moved up by 1.6% in the first nine months over the same period last year.

Inflation measured by the IPCA consumer price index recorded 0.35% in September, giving 5.86% in the last 12 months, above the target ceiling defined by the Monetary Policy Committee (COPOM), which raised the Selic base rate for the fifth consecutive time at its last meeting in September, this time to 9.50% p.a.

The real remained highly volatile against the U.S. dollar throughout the third quarter, peaking at R$2.45/US$, given the uncertainties surrounding the FED’s reduction of the monetary stimuli. However, following the decision to maintain the stimuli, the dollar fell back, closing September at R$2.23/US$.

Foreign reserves remained virtually flat at around US$376 billion.

Macroeconomic Projections

                                   Source: FOCUS BACEN                    Base: November 08, 2013

As of January 1, 2013, the Company adopted IFRS 10 – Consolidated Financial Statements, corresponding to CPC 36 (R3) – Demonstrações Financeiras Consolidadas, approved by the CVM in December 2012, and IFRS 11 – Joint Arrangements, corresponding to CPC 19 (R2) - Negócios em Conjunto, approved by the CVM in November 2012. Given that the proportional consolidation method is no longer permitted, the Company has ceased to consolidate its jointly-owned subsidiaries, Namisa, MRS Logística and CBSI, and now recognizes them in accordance with the equity accounting method. The main impacts were on net revenue, cost of goods sold, gross profit, the financial result, equity income and net income. For comparability purposes, the consolidated financial statements for the third quarter of 2012 were reclassified to reflect this alteration.     

CSN posted record consolidated net revenue of R$4,661 million in 3Q13, 15% up on 2Q13, mainly due to increased revenue from mining operations.  

In the first nine months, net revenue totaled R$12,364 million, 15% more than in 9M12, chiefly due to higher revenue from the steel segment, and also a new record.

In 3Q13, consolidated COGS reached R$3,259 million, 8% up on the previous quarter, primarily due to higher volume sold in mining segment.

The Gross Profit reached R$1,402 million in the 3Q13, 35% up from 2Q13, for the same reasons afore mentioned.

Consolidated SG&A expenses totaled R$315 million in 3Q13, 17% down on the previous quarter, chiefly due to lower distribution costs. 

CSN recorded a net expense of R$133 million in the “Other Operating Expenses” line in 3Q13, 9% down on the previous quarter, basically due to the upturn in non-recurring revenue in 3Q13.

The Company uses Adjusted EBITDA to measure the performance of its various segments and operating cash flow generation capacity. It comprises net income before the net financial result, income and social contribution taxes, depreciation and amortization, equity income and other operating revenue (expenses).

Adjusted EBITDA considers the Company’s proportional interest in Namisa, MRS Logística and CBSI and is on a comparable basis with the amounts published in 2012.

Adjusted EBITDA totaled R$1,652 million in 3Q13, 51% up on the R$1,095 million posted in 2Q13, primarily due to the contribution of the mining and steel segments.

The consolidated adjusted EBITDA margin reached 31%, 7 p.p. more than in 2Q13.

The 3Q13 consolidated net financial result was negative by R$597 million, chiefly due to the following factors:  

·         Interest on loans and financing totaling R$588 million;  

·         Expenses of R$30 million with the monetary restatement of tax payment installments;  

·         Other financial expenses totaling R$43 million.

These negative effects were partially offset by consolidated financial revenue of R$59 million and monetary and foreign exchange variations of R$5 million.

Gross debt, net debt and the net debt/EBITDA ratio presented below reflect the Company’s proportional interest in Namisa, MRS Logística and CBSI and are on a comparable basis with the amounts published in 2012.

On September 30, 2013, consolidated net debt stood at R$17.8 billion, R$0.9 billion more than the R$16.9 billion recorded on June 30, 2013, essentially due to the following factors:

·         Dividend and interest on equity payments totaling R$0.4 billion;

·         Investments of R$0.8 billion in fixed assets;

·         A R$0.7 billion disbursement effect related to the cost of debt;

·         A R$0.5 billion increase in working capital;

·         Other effects of R$0.2 billion.

These effects were partially offset by adjusted EBITDA of R$1.7 billion.

The net debt/EBITDA ratio based on LTM adjusted EBITDA closed the third quarter at 3.65x, 0.27x down on the ratio recorded at the end of the previous quarter.

Indebtness (R$ MM) and Net Debt / Adjusted EBITDA

The consolidated equity result totaled R$208 million in 3Q13, basically due to the result of the jointly-owned subsidiary Namisa.

CSN posted consolidated third-quarter net income of R$503 million, in line with the 2Q13 figure.

Investments reflect the Company’s proportional interest in Namisa, MRS Logística and CBSI and are on a comparable basis with the amounts published in 2012.

CSN invested R$838 million in 3Q13, R$424 million of which in the parent company, allocated as follows:

ü  Casa de Pedra mine and Port of Itaguaí: R$191 million;

ü  Long steel: R$105 million.

The remaining R$414 million went to subsidiaries or joint subsidiaries, mostly in the following projects:

ü  Transnordestina Logística: R$301 million;

ü  MRS:  R$41 million;

ü  Namisa:  R$11 million.

Working capital allocated to the Company’s businesses closed 3Q13 at R$2,455 million, R$513 million up on the R$1,942 million recorded at the end of 2Q13, chiefly due to the reduction in the suppliers line. The average supplier payment period narrowed by 17 days, partially offset by the four-day reduction in the inventory turnover period, raising the cash conversion cycle by 13 days.

The Company maintains integrated operations in five business segments: steel, mining, logistics, cement and energy. The main assets and/or companies comprising each segment are presented below:

The information on CSN’s five business segments is derived from the accounting data, together with allocations and the apportionment of costs among the segments.

Results by segment reflect the Company’s proportional interest in Namisa, MRS Logística and CBSI and are on a comparable basis with the amounts published in 2012.

Net revenue by segment (R$ million)   

Adjusted EBITDA by segment (R$ million)

Scenario

According to the World Steel Association (WSA), global crude steel production totaled 1.2 billion tonnes in the nine months through September 2013, 2.7% higher than in 9M12, with China responding for 586 million tonnes, 8% up in the same period. Global capacity use stood at 79% in August, identical to the June figure.

Given this scenario, the WSA expects global apparent steel consumption of 1.48 billion tonnes in 2013, 3.1% more than the year before, with China accounting for 700 million tonnes, 6.1% higher than in 2012. In 2014, the association estimates apparent consumption of 1.52 billion tonnes, 3.3% up on 2013.

According to the Brazilian Steel Institute (IABr), domestic crude steel production came to 25.9 million tonnes in the first nine months, in line with 9M12 volume, while rolled flat output totaled 11.3 million tonnes, a 2% improvement over the same period last year.

Also in the first nine months, domestic flat steel consumption amounted to 10.6 million tonnes, 4% up year-on-year, while domestic sales increased by 7% to 9.2 million tonnes. On the other hand, imports dropped by 13% to 1.4 million tonnes and exports fell by 7.2% to 1.2 million tonnes in the same period.

The IABr estimates Brazilian crude steel production of 34.5 million tonnes in 2013, the same level as in 2012, accompanied by domestic sales growth of 5.3% to 22.8 million tonnes and a 3.2% upturn in apparent consumption to 26.0 million tonnes.

For 2014, the institute expects an apparent consumption of 27.0 million tonnes, an increase of 3.8%.

Automotive

According to ANFAVEA (the Auto Manufacturers’ Association), vehicle production totaled 2.84 million units, in the first nine months, 14% up on 9M12, with sales of 2.78 million units. The association estimates production growth of 12% in 2013 and 5% in 2014. 

FENABRAVE (the Vehicle Distributors’ Association) expects record car and light commercial vehicle sales of 3.7 million units, 1.5% up on 2012. In the case of heavy vehicles, it estimates licensing of 188,000 units, with trucks and agricultural machinery, which have been growing strongly this year, moving up by 12% and 10%, respectively. 

Construction  

According to ABRAMAT (the Construction Material Manufacturers’ Association), sales of building materials increased by 4.3% in 2013 through September over the same period last year.

In São Paulo state, SECOVI (the Residential Builders’ Association) expects sales of 35,000 units in 2013, 30% up on last year.

Home Appliances

According to the IBGE (Brazilian Institute of Geography and Statistics), white goods production fell by 3% year-on-year in the first eight months of 2013.

The government confirmed the recomposition of the IPI tax on home appliances and furniture by December 2013. The rate on stoves will increase from 3% to its original rate of 4%, while the tax on refrigerators and simple washing machines will return partially to their previous levels, moving up from 8.5% to 10% and from 4.5% to 5%, respectively.

Distribution  

According to INDA (the Brazilian Steel Distributors’ Association), domestic flat steel sales by distributors totaled 3.4 million tonnes in the first nine months, 3.3% up on 9M12.

In the same period, purchases by the associated network came to 3.5 million tonnes, 10.7% up year-on-year. Inventories closed September at around 1.1 million tonnes, identical to the end of August, with a turnover of 2.7 months of sales.

Sales Volume

CSN sold 1.5 million tonnes of steel in 3Q13, 3.5% less than in 2Q13, when the Company recorded its second highest figure in terms of steel sales. Of this total, 77% went to the domestic market, 20% were sold by overseas subsidiaries and 3% went to direct exports.

In 9M13, steel sales came to 4.7 million tonnes, 8% up year-on-year and a new record for the period.  

CSN’s domestic steel sales came to 1.2 million tonnes in 3Q13, 3% less than in 2Q13, when the Company recorded its second highest figure.

In the first nine months, domestic steel sales totaled 3.6 million tonnes, an 8% improvement over 9M12 and a new period record.

Foreign Sales Volume         

Foreign sales came to 354,000 tonnes in 3Q13, 4% less than in the previous quarter. Of this total, the overseas subsidiaries sold 313,000 tonnes, 180,000 of which by SWT. Direct exports came to 41,000 tonnes.

Prices

Net revenue per tonne averaged R$2,043 in 3Q13, 5% higher than the 2Q13 average of R$1,944.

Net Revenue

Net revenue from steel operations totaled R$3,198 million in 3Q13, 2% up on 2Q13 and the Company’s highest ever quarterly figure, basically due to the upturn in prices.  

In the first nine months, net revenue came to R$9,293 million, 17% more than in 9M12 and a new period record, chiefly due to the increase in sales volume and higher prices.

Cost of Goods Sold (COGS)

Steel segment COGS stood at R$2,532 million in 3Q13, in line with the previous quarter.

Adjusted EBITDA

Adjusted steel segment EBITDA totaled R$672 million in 3Q13, 9% up on 2Q13, basically due to higher prices, raising the adjusted EBITDA margin to 21%.

Production

The Presidente Vargas Steelworks (UPV) produced 1.2 million tonnes of crude steel in the third quarter, in line with the 2Q13 figure, while slab consumption from third parties came to 152,000 tonnes and rolled steel output totaled 1.2 million tonnes, 4% down on the previous three months.

Production Costs (Parent Company)

In 3Q13, the Presidente Vargas Steelworks’ total production costs came to R$1,787 million, R$65 million more than in 2Q13, R$33 million of which in raw materials and R$32 million in other production costs.

Scenario

In 3Q13, the seaborne iron ore market was positively impacted by higher demand for steel products in China, thanks to strong government stimuli and investments in infrastructure, which triggered the restocking of iron ore by steel plants. As a result, the Platts Fe62% CFR China index averaged US$132.51/dmt in 3Q13, 5.2% up on the previous three months. 

The iron-ore quality premium hovered between US$2.10 and US$2.40/dmt per 1% of Fe content, while freight costs on the Tubarão/Qingdao route averaged US$23.30/wmt, 30.6% more than the US$17.84/wmt recorded in 2Q13, due to higher demand for ships.

In 3Q13, Brazilian exports accounted for 27% of the seaborne market, totaling 86 million tonnes, 14% up on the quarter before.

Iron Ore Sales

Third-quarter iron ore sales totaled 7.7 million tonnes, 27% more than in 2Q13, virtually all of which was sold abroad. Of this total, 2.9 million tonnes were sold by Namisa¹. 

Additionaly, the Company’s own consumption  stood at 1.5 million tonnes.

It is worth noting that Tecar, the Company’s terminal in the Port of Itaguaí, which began to operate with a new capacity of 45 million annual tones, loaded a record volume of 8.3 million tonnes of iron ore.

¹ Sales volumes include 100% of the stake in NAMISA.

Net Revenue

Net revenue from mining operations totaled R$1.65 billion in 3Q13, 67% more than in 2Q13, chiefly due to the upturn in sales volume and higher prices.

Cost of Goods Sold (COGS)

Mining COGS came to R$828 million in 3Q13, 38% up on 2Q13, also due to the increase in sales volume.

Adjusted EBITDA

Adjusted EBITDA totaled R$872 million in 3Q13, a hefty 119% up on the previous quarter, for the same reasons mentioned above. The adjusted EBITDA margin reached 53%, 13 p.p. higher than in 2Q13.

Scenario

Railway Logistics

According to the ANTF (National Rail Transport Association), the Brazilian railways transported 225 million tonnes of useful cargo in the first half of 2013, and it expects to reach 491 million tonnes by year-end. In 2015, the association estimates volume of 551 million tonnes, 15% up on 2012.

Port Logistics

According to ANTAQ (National Waterway Transport Agency), Brazil’s port installations handled around 231 million total tonnes in 2Q13, 13% up on the previous three months, giving a first-half total of 436 million tonnes, 0.6% more than in 1H12.

Bulk solids totaled 144 million tonnes, 20% more than in 1Q13, giving 264 million tonnes in the first six months, a 1% year-on-year improvement.

Container handling came to 2.2 million TEUs1 in 2Q13, 13% higher than the previous quarter, reaching a first-half total of 4.1 million TEUs1, 5% more than in the same period last year.

¹ TEU (Twenty‐Foot Equivalent Unit) – transportation unit equivalent to a standard 20-feet intermodal container

Analysis of Results

Railway Logistics

Net revenue from railway logistics totaled R$288 million in 3Q13, COGS came to R$177 million and adjusted EBITDA totaled R$120 million, with an adjusted EBITDA margin of 42%.

Port Logistics

In 3Q13, net revenue from port logistics amounted to R$50 million, COGS totaled R$24 million and adjusted EBITDA reached R$24 million, with an adjusted EBITDA margin of 47%.

In the first nine months, CSN posted a record of R$133 million net revenue from port logistics operations, 22% up on 9M12, mostly influenced by the higher number of containers handled, which totaled 194,000 units in the period.

Scenario

Preliminary figures from SNIC (the Cement Industry Association) indicate domestic cement sales of 18.8 million tonnes in 3Q13, 7% up quarter-on-quarter. In the first nine months sales came to 52.4 million tonnes, 2% more than 9M12.The association expects annual sales growth close to 3%.

Analysis of Results

In 3Q13, CSN’s cement sales totaled 526,000 tonnes, net revenue came to R$105 million, COGS amounted to R$70 million and adjusted EBITDA stood at R$24 million, with an adjusted EBITDA margin of 23%.

In 9M13, cement revenue reached the record level of R$308 million, 6% more than in the same period of 2012, from sales volume of 1.5 million tonnes, also a new record.

Scenario

According to the Energy Research Company (EPE), Brazilian electricity consumption grew by 3.2% in 2013 through September, over the same period last year, led by the residential and commercial segments which recorded respective growth of 6.3% and 5.4%. The institution expects annual consumption growth of 3.3%.

Analysis of Results

In 3Q13, net revenue from energy sales amounted to R$55 million, COGS totaled R$44 million and adjusted EBITDA came to R$10 million, accompanied by an adjusted EBITDA margin of 18%.

CSN’s shares appreciated by 63% in 3Q13, substantially higher than the Ibovespa’s 10% upturn in the same period. On the NYSE, the Company’s ADRs appreciated by 59%, also well above the Dow Jones, which edged up by 2%.  

Daily traded volume in CSN’s shares on the BM&FBovespa averaged R$65.4 million in 3Q13, 15% more than the R$57.0 million recorded in 2Q13. On the NYSE, daily traded volume in CSN’s ADRs averaged US$24.0 million, 11% up on the previous quarter’s average of US$21.7 million.

On November 13, 2013, the Board of Directors approved the payment to shareholders of interest on equity totaling R$100 million and interim dividends amounting R$400 million, which constitutes an anticipation of the minimum mandatory dividends for fiscal year 2013. Shareholders registered in the records of the depositary institution, on November 13, 2013 will be entitled to receive said dividends.