Good morning, ladies and gentlemen. At this time, we would like to welcome everyone to CSN Mineração for the earnings result for the first quarter 2025. Joining us today are the company's executive officers. We would like to inform you that this event is being recorded, and all participants will be in listen-only mode during the company presentation. Once the remarks are over, there will be a Q&A session when further instructions will be given. You can access this at csn.com.br/ir, where the presentation is also available. The replay of the service will be on the website. Before proceeding, we would like to state that some of the forward-looking statements are mere expectations and trends, and based on the current assumptions and opinions of the company management. Future results, performance, and events may differ materially from those expressed herein which do not constitute projections.
Actual results, performance, or events may differ materially from those expressed or implied by forward-looking statements as a result of several factors: general and economic conditions in Brazil and other countries, interest rates and exchange rate levels, future rescheduling or prepayment of debt, peg in foreign currencies, protectionist measures in the U.S., Brazil, and other countries, changes in laws and foreign regulations, and general competitive factors at a general, regional, and national basis. I would like to turn the floor over to Mr. Pedro Oliva, the CEO and Executive RO. Mr. Oliva, you may proceed with the presentation. Good morning, and I would like to begin by thanking all of you for your attendance at this call for the earnings release for the first quarter 2025. We will begin with the highlights.
We had 27.1% EBITDA growth, 1.4 million highs, with a margin of 41.8%, representing a growth of 1.7% points vis-à-vis the first quarter 2024. Now, these figures were supported with a new sales record for the period, and without adding capacity, the company shows its operational excellence, delivering a growth of 5.4% in sales volume. Now, this was made feasible by a growth of 1.5% in the volume of production and purchases, added to a drop of 11% in the C1 cost that reached $21 per ton compared with $23.5 per ton in the first quarter. This gave rise to the adjusted free cash flow reaching 546 million highs. In the next slide, we have the production volume and purchase of iron ore reaching 10.2 million tons, with an increase, a yearly increase of 11.5%.
This shows a greater efficiency of the operation and drier weather vis-à-vis what we had last year in the same period. In the comparison with the fourth quarter 2024, the drop of 7.3% in volume is the result of a smaller volume of purchases. The evolution of inventory vis-à-vis the end of the year went from 3.4 million tons- 3.9 million tons due to the strong production volume during the period. In the next slide, you'll see information on sales. We reached 9.6 million tons sold, with an annual growth of 5.4% vis-à-vis the same period last year. In our sector, it's always important to speak about seasonality and the impact of rainfall, especially in summer. This represents a new company record for the first quarter, and net revenue was 21.1% higher than the first quarter, reflecting not only operational improvements but a more devalued exchange rate.
The net- revenue unit was $61.96 per ton, virtually stable compared with the first quarter of 2024 and $61.70 per ton in the fourth quarter of 2024. In the following slide, you see our price realization. We began with a Flat 62 of $63.64 per ton, very close to the 103.4 of the previous quarter. Now, the quality. We had positive data this quarter with a quality adjustment of 14.7%, an improvement of $0.87 compared to the figures of last quarter, and sea freight with a reduction of $4 per ton, $3.97 compared to the previous quarter. Now, in terms of the QPs of the previous quarter, we had had a positive impact of $4.55 in price realization. Now, this quarter, it was negative in $0.24, basically flat, with a unit net revenue of $61.96 per ton, somewhat higher than the $61.70 of the previous quarter.
Now, speaking about our COGS, we had a growth of 4.8% quarter- on- quarter, reflecting increased volume of high-value purchases for the domestic market that has high road transportation costs. The increase of 27.1% in EBITDA in the first quarter 2025 compared to the first quarter 2024 is the result of a combination of several factors: higher volumes, as we mentioned, a drop of 11% in C1 costs, and a drop of $4 in sea freight, with lower quality discounts, $0.87 per ton. We speak about adjusted EBITDA comparing the fourth quarter of 2024. In the first quarter of 2025, we had BRL 1.4 billion highs, thanks to several factors. We had a positive evolution in the iron ore price with little variation in price. All of this supported with a lower quality adjustment, positive for the company.
This came along with a lower cost of sea freight and an improvement in mix with a higher share of our own production vis-à-vis purchases from third parties. These factors were offset with the seasonality we expected and with a drop of volume, with an impact of $285 million and a lower sales volume, lower cost in purchases, as explained because of the very long distances in the trading of iron ore in the domestic market and the exchange rate variation. In the following slide, you can see our information on the company investment. In the first quarter of 2025, we reached BRL 377 million. The pace of investment and expansion continues to be heated up with the progress of infrastructure works at P15. The expansion CapEx is threefold what we had for the same period last year.
In terms of operational continuity, we have less expenditures with maintenance, and we're concentrating our investments in expansion. We will concentrate our investments in the second half of the year. In the next slide, the net working capital in the first quarter, this indicator was negative by BRL 188 million. It represents stability compared to the BRL 194 million- of the previous quarter. The main variations are a reduction in accounts receivable and a reduction in the supplier's line item. Speaking about our indebtedness profile, it continues to be quite lengthened. CSN Mineração closed March with $14.3 million in cash and cash equivalents, down 5.9% compared to the previous quarter. Now, this reflects the impact of the exchange rate variation on its strong cash position in U.S. dollars.
Now, despite this, the company continues to have a solid net cash position, totaling BRL 4.1 billion in the quarter, with a leverage ratio measured by net debt EBITDA of - 0.65x In the following slide, we present the adjusted cash flow that was positive by BRL 546 million, supported by the strong adjusted EBITDA because of record sales and also the lower CapEx volume in the period, which is seasonal and will tend to grow relevantly throughout the coming quarters. Now, regarding our net profit, CSN Mineração recorded a net loss of BRL 357 million compared to a net profit of more than BRL 2 billion highs in the previous quarter. This is explained by the impact of BRL 1 billion of the exchange rate variation on cash in dollars. Now, we have a cash position in foreign currency. In the first quarter, it was $2.4 billion.
Now, the dollar rate was 6.19 on December and went to BRL 5.74 per dollar in March of 2025. Now, this strong cash position in dollars has been something that sets us aside in this very turbulent, volatile market, and it is fundamental because of the expansion that we have. If we look at the fourth quarter results and the exchange rate, it was positive by BRL 1.13 billion, and last year it was positive by BRL 1.65 billion. With this, we conclude, and before we go on to the Q&A, we will speak about our ESG highlights. On the governance front, I highlight the conclusion of our integrated report 2024 made available to the public in April 2025. It has a wealth of information on the different ESG indicators and shows what the company is doing regarding its different goals.
In the social and diversity front, the great highlight clearly is the fact that one year ahead of schedule, we complied with our diversity target. Women represent 26.4% of the workforce. In occupational health and safety, we had a reduction of 17% in the accident frequency rate, and in environmental management we are operating with an 8% reduction in CO2 emissions per ton of iron ore compared to the baseline year, which is 2020. Regarding subsequent events, the main one was the approval by the company board yesterday of a payout of dividends amounting to BRL 1 billion, BRL 1.9 million reais, and BRL 210 million reais of equity on our own capital. Jointly, they represent BRL 2.3 billion that will be paid out until the end of the year. This, additionally to the BRL 1.1 billion reais that had been approved last year, will also be paid out in 2025.
The proceeds already contracted for distribution during the year total BRL 1.5 billion. Now, we have here with us Mr. Carlos Mello, Director Superintendent of CSN Mineração, and the Chairman of the Board, Mr. Benjamin Steinbruch. We will now go on to the question and answer session for investors and market analysts. Should you have a question, please click on the raise hand icon or write in your question in the Q&A icon. The first question is from Emerson Vieira from Goldman Sachs. He apologizes and said, "Our first question is from Barbara Soares from Itau BBA. You may proceed, ma'am." Thank you for taking our questions. I'm going to begin asking about the trade war.
The last month, we saw that tension has increased, and iron ore is one of the products that has stood firmly with price when compared to others because of the rather unrelevant stake in the United States. For those of you who work more closely, which is the feeling of the Chinese so far? My second question refers to the improvement of freight in $4 per ton. With the trade war, we will also see a rearrangement of global costs. Is there an estimate of the impact going forward? The last question, changing topic, refers to third-party purchases. We saw that the share of purchase from third parties in the fourth quarter was 25%. What happened this quarter? Barbara, thank you for the questions.
Regarding the trade war between the U.S. and China and the feeling of the Chinese of the tariff of 145 beginning in April, China retaliated with a tariff of 125%. Regarding our segment, now 65% of the purchases went to the Chinese market, 35% to the U.S.A The impact on Chinese steel occurs indirectly, affecting countries where China exports like Vietnam. They had already spoken about measures to reduce this flow. The anti-dumping tariffs were 81%, and Vietnam began temporary tariffs, 18% or 20% over the great Chinese steel companies. There also is a safeguard tariff on certain products of Chinese steel. This contact leads the specialists to estimate a reduction in the volume of exports, something that has not materialized so far.
If you analyze the export data, the more recent data this morning, the volume is 103 million, very close to the 111 million last year. The estimate was between 82 million and 86 million tons of exports by China. When you think about the feeling in April and May, we have a reduction of 54.5- 49. Once again, a reflex of this trade war. The United States and China will have a meeting on the 10th of this month, and there's the indication of possibility of reducing tariffs to 80%. This, of course, will depend on the Trade Secretary of Trump. Now, we're going to see changes on this front that should be positive. There is already an impact when I speak about the feeling of the Chinese. The United States is the greatest market for China. Luckily, the iron ore indicators continue to be very sound.
Regarding the improvement in freight, we have several variables at play. Oil, as you mentioned, was quite impacted by the recently announced measures by the U.S. government and the Chinese tariffs. Now, the reading of specialists is that that drop to a level of $19 is a seasonable issue. In the second half of the year, there is a greater demand, but there will be a drop of around $5 compared to the $25.1 per ton in 2024. Regarding the volume purchase from third parties, we have 1.7 million tons in the first quarter, a significant drop vis-à-vis the fourth quarter of last year. Our production volume was basically flat. It went from 58 million- 57 million tons. It would make sense to purchase to keep in stock. We have 500,000 tons in stock, but compared to the first quarter of 2024, Barbara, we had only 2.1 million tons.
We purchased some more because we expected a better performance in our capacity, which we did obtain for the year. We expect a slight income increase, I'm sorry, in the purchase volume, very close to the levels of the year. Last year, this was 23%, and for this year, we estimate 25% as well. Thank you very much. That was very clear. The next question comes from Emerson Vieira from Goldman Sachs. Your microphone has been activated. You may proceed. Good morning, everybody. Thank you for taking my questions. We have two. First, regarding the quality adjustment, we have seen a very positive performance of this variable and the drop of $1 per ton in the first quarter. I would like to know if this ends up being a reflection of the demand for iron ore with a lower iron content, especially in the Chinese market.
There is news speaking about this new dynamic, or if this simply reflects a better perceived quality of your company product. The second question is the follow-up, your contracts to anticipate iron ore. If I'm not mistaken, in the fourth quarter last year, there was an increase to $355 million. This year, there has been no incremental contract. Is this strategy ongoing? Looking forward, was the first quarter simply a temporary pause? Any update would be very helpful. Thank you. Thank you, Emerson, for the questions regarding the quality adjustment. You spoke about the dynamic of strong demand for the low grade in China. This continues to hold true. When you look at the data of average margin of Chinese steel companies, it is negative by $17. When you open between EAF and BOF, there's a big difference.
EAF is operating $80- and the BOF positive with $108 per ton. Even so, the margins are still quite low. As this is an average, there are companies operating at a loss, and they are trying not to maximize the flow and minimize the unit cost. Now, if we add to this the strategy of some adjustments, trade adjustments of some of the products in our portfolio, this has proven to be a strategy that is accepted to maximize and optimize price realization, considering the demand for different products in China. Regarding the prepayments, we have BRL 1.1 billion opened up with a maturity at 12 months of BRL 1.35 billion. You commented correctly. We did nothing in the first quarter, and our expectation is to roll the maturities we have in coming quarters.
We're already holding a conversation with our main customers to execute these transactions in coming months. Thank you. That was very clear, and congratulations for the results. The next question is from Guilherme Nippes from XP. Your microphone has been activated. Bom dia, Pedro. Bom dia. Good morning. Pedro, good morning, team. Thank you for taking our questions. We have two. The first question, if you could give us a general overview of what is happening with the company's main investments, the P15 project, and if you could give us an update on what we can expect in terms of CapEx in coming years in the context of these new projects. My second question, we saw your announcement on dividends. I would like to better understand which will be the balance between CapEx, dividends, and buybacks looking forward in the context of the new company investments.
These are my two questions. Thank you for the questions. Regarding P15, the project is advancing well, 44% of physical advance. We have already disbursed BRL 54 million. We have 150 people working on the worksite with equipment. The next steps are hiring the yard machine for the civil construction. Our negotiations in this are quite advanced. When we look at coming years, Guilherme, and throughout this year, we will have a ramp-up. We're going to begin with BRL 377 million at the end of the year. At the end of the year, we will be at twofold or threefold projection. In the coming years, we will disburse BRL 13.2 billion, BRL 2.6 billion per year. These indicators that we shared during CSN are being maintained at present.
Regarding that combination ofCapEx , dividends, and buyback, luckily enough, the net cash position of the company and the operational excellence hitting records recurrently during the last quarters mean that we have significant comfort in executing this challenging expansion plan. It's not something trivial to deal with these projects. When it comes to dividends, given that combination of a good operating performance and a comfortable leverage, our outlook has been to maintain the dividend policy that we have delivered since our IPO, between 80% and 100% of net profit to be paid out annually. Regarding the buyback, the program is open for up to 100 million shares, of which 53.2 million shares have already been acquired. It will be open until December 19th of this year, which means we can continue to execute this.
In the last few months, the priority has been dividend payout and the execution of company projects. Very clear. Thank you very much. Our next question comes from Henrique Pereira from Morgan Stanley. Your microphone has been activated. Senhor Enrique, por favor, pode prosseguir. You may proceed, Mr. Henrique Pereira. Oh, good morning. Can you hear me? Yes, we do. Good morning, Pedro and team. One question regarding your cost. Do you foresee increases during the year, and how are you going to adhere to the last guidance that you shared with us? Thank you for the question, Enrique. We began the year with exceptional C1 results, 11% below 2024. The guidance is 21.5-23. And at present, we maintain the guidance. Given the good performance of the first quarter, we have a comfortable position, therefore, to deliver that level.
Our next question, My next question is in writing from Mr. Lawrence Takeda, investor. He says, "Good morning. In the release, we have a negative increase of the financial results hampering your profit. Could you comment on this and which is the outlook for the coming quarter? Thank you." Thank you for the question. We understand this as being a one-time event, and during the presentation, I explained this. It is the result of the impact of the exchange rate and the strong cash position of the company. At the end of March of this year, we had $2.4 billion in cash, and throughout the last few years, this has been what has positively given trust to the company results. Last year, the positive impact was 1.065 million highs in the same mean consolidated results.
Now, for the second quarter, it's hard to establish what will happen with the exchange rate due to market volatility, but it is very close to the 5.75 highs per dollar. We don't expect to have significant impact from that line item in our results in the second quarter. The next question in writing comes from Igor Silva, investor, regarding the P15. When do you foresee the conclusion of the work, and which will be the increase in revenues and profit once P15 is concluded? We don't have guidance on the P15. What I can say is that the conclusion is foreseen for the fourth quarter 2027. We're on track regarding that date that we communicated at the end of last year. We're trying to anticipate this, and we think this will add expressively to the company results.
We're speaking about adding 16.5 million tons in the market conditions of the present, where the quality premiums are lower due to the low margins of Chinese steel plants. Notwithstanding, the average premium of P15 expected regarding Flat 62 is $22 per ton. If you compare the quality results today, the average quality of our portfolio of $14 in the last quarter, if we add those two variables, we're speaking about adding somewhat more than $36 per ton of margin. The cost will increase marginally at the plant. The plant has more intensive processing. We're going to work with a poorer product to deliver a richer product, and we will have 67% of iron content. P15 will be material for the company. It will add quality to a niche where we're lacking product. It is an iron ore with a high iron content.
It is important to decarbonize the global steel industries. Therefore, I believe that P15 will be highly relevant from the viewpoint of revenues and, of course, results. The next question in writing comes from Marcio Ehe. Good morning. At the last assembly, you made a change in your bylaws regarding the closing of capital. My question is, does the controller intend to close the capital of CSN Mineração? Marcio, I saw an article that analyzed this, and unfortunately, that article was not correct. The items that they presented regarding a change in the bylaws have been there in truth since the IPO, and they are demands regarding the level that we have at B3, level two in the Brazilian stock market. That article was not based on correct information, and thank you for the opportunity to clarify this.
There is no intention in the company regarding closing the capital of CSN Mineração. As we have no further questions, I will return the floor to Mr. Pedro Oliva, CFO and IRO, for the closing remarks. Once again, I would like to thank all of you for your attendance, and I will now turn the floor over to the Chairman of the Board, Mr. Benjamin Steinbruch. Thank you all for your attendance at the earnings results for CSN M. To close, I would like to reiterate our commitment with our cost reduction and a direct focus of everybody in the company. We have had excellent results when it comes to cost, and the feeling is that everything that was put in place regarding the cost issue is truly materializing. With this, we can offer products at a highly competitive cost.
I would like to compliment everybody working in operations in the company. They have worked very successfully, helping us with the cost of production of our iron ore. We believe that this cost will tend to be maintained at the present-day level between BRL 21.50-BRL 23. That is our will and our determination to maintain it at that level. We have done that successfully in terms of production, our own production. We also had an increase. This is another of our efforts as we are decreasing our purchases from third parties and increasing our own production because of the very good performance of the plant and, of course, a good performance that has been delivered throughout the last quarters. We believe that this is a trend that will remain, an increase in our own production. Now, we look upon freight with an outlook of reduction.
We're working towards this and also thinking of the possibility of contracting freight at a lower cost. We believe that we will have good results when hiring freight. Now, regarding the Chinese market, it's what we always say. Because of the present-day moment, we believe that China as well will deploy great efforts to recover their own domestic market. Our iron ore has proven to be comfortable with a price range of $90-$100. Now, the quality of iron ore is not good, so the price oscillates somewhat at somewhat less than $100. Because of this effort of China to recover its economy and the commitment that they've made to the infrastructure and civil construction market, they will probably have this recovery of iron ore simply because of their demand. They don't have inventories and we're looking with tranquility upon this recovery of the Chinese market.
Now, when it comes to that balance, it's always favored us. The fact that the company is strongly dollarized in its accounts and, basically all of our accounts are pegged to the dollar, all of our revenues are in dollars, and this has always been a positive thing for us. When there was a devaluation of the dollar, but this is a one-time effect, and we do believe that the dollar has always favored us and will continue to be something positive in the company. Therefore, the quarter was good. We did have a negative result, but in terms of operations and commercially, we are going through an excellent moment, and we will have a recovery for the second quarter. Once again, I would like to thank all of you for your attention.
I thank the team for their effort, for everything that they have done, and for the results that they have brought in, always with that outlook of improving so that we can stay up to the investments we would like to make and to make this company the company we all wish it will become. Thank you very much to all of you. Result Conference for CSN Mineração and Steel. We would like to thank all of you for your attendance. Have a good day.