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25 SEGMENT INFORMATION | 12 Months Ended
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Dec. 31, 2019
Segment Information [Abstract] |
SEGMENT INFORMATION | 25 SEGMENT INFORMATION According to the Group´s structure, the businesses are distributed and managed in five operating segments as follows: · Steel The Steel Segment consolidates all the operations related to the production, distribution and sale of flat steel, long steel, metallic containers and galvanized steel, with operations in Brazil, United States, Portugal and Germany. The Segment supplies the following markets: construction, steel containers for the Brazilian chemical and food industries, home appliances, automobile and OEM (motors and compressors). The Company’s steel units produce hot and cold rolled steel, galvanized and pre-painted steel of great durability. They also produce tinplate, a raw material used to produce metallic containers. Overseas, Lusosider, which is based in Portugal, produces cold rolled steel and galvanized steel. CSN LLC in the U.S.A. meets local market needs, import and export of steel products. In January 2012, CSN acquired Stahlwerk Thüringen (SWT), a manufacturer of long steel located in Unterwellenborn, Germany. SWT is specialized in the production of shapes used for construction. In January 2014 the production of long steel products started in Brazil and consolidates the company as a source of complete construction solutions, complementing its portfolio of products with high value added in the steel chain. · Mining This segment encompasses the activities of iron ore and tin mining. The high-quality iron ore operations are located in the Iron Quadrilateral in Minas Gerais, which has its own mines and sells third party iron ore. At the end of 2015, CSN and the Asian Consortium formalized a shareholders' agreement for the combination of assets linked to iron ore operations and the related logistics structure, forming a new company that has focused in mining of the Group activities from December 2015. In this context, the new company, currently named CSN Mineração S.A., holds the TECAR arraignment, the Casa de Pedra mine and all the shares of Namisa, which was incorporated on December 31, 2015. CSN still owns 100% of Minérios Nacional which includes the mines of Fernandinho (operational), Cayman and Pedras Pretas (mineral resources), all located in Minas Gerais. Moreover, CSN controls the Estanho de Rondônia S.A., company with mining units and tin casting, in the state of Rondonia. · Logistics i. Railroad CSN has equity interests in three railroad companies: MRS Logística, which manages the former Southeast Network of Rede Ferroviária Federal S.A. (RFFSA), Transnordestina Logística S.A. and FTL - Ferrovia Transnordestina Logística S.A., which has the concession to operate the former Northeast Network of the RFFSA in the states of Maranhão, Piauí, Ceará, Rio Grande do Norte, Paraíba, Pernambuco and Alagoas. a) MRS The railroad transportation services provided by MRS are fundamental to the supply of raw materials and the shipment of final products. The total amount of iron ore, coal and coke consumed by the Presidente Vargas Mill as well as part of the steel produced by CSN for the domestic market and for export are carried by MRS. The Southeast Brazilian railroad system, encompassing 1,674 kilometers of tracks, serves the tri-state industrial area of São Paulo-Rio de Janeiro-Minas Gerais, in the southeast region, linking the mines located in Minas Gerais to the ports located in São Paulo and Rio de Janeiro, and the steel mills of CSN, Companhia Siderúrgica Paulista, or Cosipa, and Gerdau Açominas. Besides serving other customers, the railroad system carries iron ore from the Company’s mines in Casa de Pedra, Minas Gerais, and coke and coal from the Itaguaí Port, in Rio de Janeiro, to Volta Redonda, and carries CSN’s export products to the ports of Itaguaí and Rio de Janeiro. b) TLSA and FTL TLSA and FTL hold the concession of the former RFFSA’s Northeast Network. The Northeast Network totals 4,238 km, divided into two sections: i) Network I, which comprises the São Luiz–Mucuripe, Arrojado–Recife, Itabaiana–Cabedelo, Paula Cavalcante–Macau and Propriá–Jorge Lins (Network I); and ii) Network II, which comprises the sections of Missão Velha–Salgueiro, Salgueiro, Salgueiro –Trindade, Trindade– Eliseu Martins, Salgueiro–Porto de Suape and Missão Velha–Porto de Pecém. In addition, it connects to the main ports in the region, thereby offering an important competitive advantage through opportunities for combined transport solutions and logistics projects tailored to customer needs. II. Port Logistics The Port Logistics Segment consolidates the operation of the terminal built in the privatization period after the law of modernization of the ports (law 8.630/1993) that permits to transfer the port logistics activities to the private sector. The Sepetiba terminal features complete infrastructure to meet all the needs of exporters, importers and ship owners. Its installed capacity exceeds that of most other Brazilian terminals. It has mooring berths and a huge storage area, as well as the most modern and appropriate equipment, systems and intermodal connections. The Company’s constant investment in projects in the terminals consolidates the Itaguaí Port Complex as one of the most modern in Brazil. · Energy CSN is one of the largest industrial consumers of electric power in Brazil. As energy is fundamental in its production process, the Company invests in assets for generation of electric power to guarantee its self-sufficiency. These assets are as follows: Itá hydroelectric power plant, in the State of Santa Catarina, with rated capacity of 1,450 MW, where CSN has a share of 29.5%; Igarapava hydroelectric power plant, Minas Gerais, with rated capacity of 210 MW, in which CSN holds 17.9% of the capital; and a thermoelectric co-generation Central unit with rated capacity of 238 MW, which has been operating at the UPV since 1999, that uses the residual gases produced by the steel mill itself. · Cement The cement division consolidates the cement production, distribution and sale operations, which use the slag produced by the Volta Redonda plant’s blast furnaces. The Company produces clinker in Arcos/MG, using limestone from own mine and also two cement mills in additions to the mills that already operate in Volta Redonda/RJ. The information presented to Management regarding the performance of each business segment is generally derived directly from the accounting records, combined with some intercompany allocations. · Sales by geographic area Sales by geographic area are determined based on the customers’ location. On a consolidated basis, domestic sales are represented by revenues from customers located in Brazil and export sales are represented by revenues from customers located abroad. · Result by segment Beginning 2013, the Company no longer proportionately consolidates joint ventures MRS and CBSI. For segment information preparation and presentation purposes, Management decided to maintain the proportionate consolidation of the joint ventures, as historically presented. For consolidated profit reconciliation purposes, the amounts of these companies were eliminated in the column “Corporate expenses/elimination”.
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 12/31/2019
P&L |  | Steel |  | Mining |  | Logistics |  |  |  | Energy |  | Cement |  | Corporate expenses/elimination |  | Consolidated
|  |  | Port |  | Railroads |  |  |  |
Metric tons (thou.) (*) |  | 4,524,805 |  | 38,545,067 |  |  |  |  |  |  |  |  |  | (3,258,923) |  |
Net revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Domestic market |  | 10,027,999 |  | 926,836 |  | 240,451 |  | 1,321,355 |  | 325,343 |  | 570,805 |  | (2,462,088) |  | 10,950,701
Foreign market |  | 3,921,033 |  | 9,100,813 |  |  |  |  |  |  |  |  |  | 1,463,870 |  | 14,485,716
Total net revenue (note 21) |  | 13,949,032 |  | 10,027,649 |  | 240,451 |  | 1,321,355 |  | 325,343 |  | 570,805 |  | (998,218) |  | 25,436,417
Cost of sales and services |  | (12,962,861) |  | (4,396,247) |  | (173,344) |  | (1,030,210) |  | (266,754) |  | (607,719) |  | 2,173,871 |  | (17,263,264)
Gross profit |  | 986,171 |  | 5,631,402 |  | 67,107 |  | 291,145 |  | 58,589 |  | (36,914) |  | 1,175,653 |  | 8,173,153
General and administrative expenses |  | (834,977) |  | (186,189) |  | (34,560) |  | (109,770) |  | (29,034) |  | (91,466) |  | (1,567,874) |  | (2,853,870)
Depreciation (note 22) |  | 700,074 |  | 476,374 |  | 30,568 |  | 387,565 |  | 17,471 |  | 139,667 |  | (330,015) |  | 1,421,704
Proportionate EBITDA of joint ventures |  |  |  |  |  |  |  |  |  |  |  |  |  | 510,072 |  | 510,072
Adjusted EBITDA |  | 851,268 |  | 5,921,587 |  | 63,115 |  | 568,940 |  | 47,026 |  | 11,287 |  | (212,164) |  | 7,251,059
Sales by geographic area |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asia |  | 2,980 |  | 6,742,946 |  |  |  |  |  |  |  |  |  | 1,463,870 |  | 8,209,796
North America |  | 767,977 |  |  |  |  |  |  |  |  |  |  |  |  |  | 767,977
Latin America |  | 169,036 |  |  |  |  |  |  |  |  |  |  |  |  |  | 169,036
Europe |  | 2,978,994 |  | 2,357,867 |  |  |  |  |  |  |  |  |  |  |  | 5,336,861
Others |  | 2,046 |  |  |  |  |  |  |  |  |  |  |  |  |  | 2,046
Foreign market |  | 3,921,033 |  | 9,100,813 |  |  |  |  |  |  |  |  |  | 1,463,870 |  | 14,485,716
Domestic market |  | 10,027,999 |  | 926,836 |  | 240,451 |  | 1,321,355 |  | 325,343 |  | 570,805 |  | (2,462,088) |  | 10,950,701
Total |  | 13,949,032 |  | 10,027,649 |  | 240,451 |  | 1,321,355 |  | 325,343 |  | 570,805 |  | (998,218) |  | 25,436,417
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 12/31/2018
P&L |  | Steel |  | Mining |  | Logistics |  |  |  | Energy |  | Cement |  | Corporate expenses/elimination |  | Consolidated
|  |  | Port |  | Railroads |  |  |  |
Metric tons (thou.) (*) |  | 5,068,758 |  | 34,780,756 |  |  |  |  |  |  |  |  |  | (4,961,345) |  |
Net revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Domestic market |  | 10,328,372 |  | 972,360 |  | 266,378 |  | 1,506,114 |  | 410,606 |  | 588,230 |  | (2,718,623) |  | 11,353,437
Foreign market |  | 5,305,771 |  | 5,012,421 |  |  |  |  |  |  |  |  |  | 1,297,256 |  | 11,615,448
Total net revenue (note 21) |  | 15,634,143 |  | 5,984,781 |  | 266,378 |  | 1,506,114 |  | 410,606 |  | 588,230 |  | (1,421,367) |  | 22,968,885
Cost of sales and services |  | (12,613,216) |  | (3,585,691) |  | (189,999) |  | (1,049,071) |  | (286,734) |  | (544,266) |  | 2,163,320 |  | (16,105,657)
Gross profit |  | 3,020,927 |  | 2,399,090 |  | 76,379 |  | 457,043 |  | 123,872 |  | 43,964 |  | 741,953 |  | 6,863,228
General and administrative expenses |  | (984,980) |  | (144,754) |  | (35,423) |  | (106,412) |  | (27,948) |  | (95,893) |  | (1,362,301) |  | (2,757,711)
Depreciation (note 22) |  | 609,274 |  | 366,547 |  | 20,368 |  | 258,985 |  | 17,285 |  | 115,411 |  | (212,763) |  | 1,175,107
Proportionate EBITDA of joint ventures |  |  |  |  |  |  |  |  |  |  |  |  |  | 568,045 |  | 568,045
Adjusted EBITDA |  | 2,645,221 |  | 2,620,883 |  | 61,324 |  | 609,616 |  | 113,209 |  | 63,482 |  | (265,066) |  | 5,848,669
Sales by geographic area |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asia |  | 40,681 |  | 4,422,377 |  |  |  |  |  |  |  |  |  | 1,297,256 |  | 5,760,314
North America |  | 1,506,041 |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,506,041
Latin America |  | 369,830 |  |  |  |  |  |  |  |  |  |  |  |  |  | 369,830
Europe |  | 3,330,991 |  | 590,044 |  |  |  |  |  |  |  |  |  |  |  | 3,921,035
Others |  | 58,228 |  |  |  |  |  |  |  |  |  |  |  |  |  | 58,228
Foreign market |  | 5,305,771 |  | 5,012,421 |  |  |  |  |  |  |  |  |  | 1,297,256 |  | 11,615,448
Domestic market |  | 10,328,372 |  | 972,360 |  | 266,378 |  | 1,506,114 |  | 410,606 |  | 588,230 |  | (2,718,623) |  | 11,353,437
Total |  | 15,634,143 |  | 5,984,781 |  | 266,378 |  | 1,506,114 |  | 410,606 |  | 588,230 |  | (1,421,367) |  | 22,968,885
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 12/31/2017
|  | Steel |  | Mining |  | Logistics |  |  |  | Energy |  | Cement |  | Corporate expenses/elimination |  | Consolidated
|  |  |  | Port |  | Railroads |  |  |  |
Metric tons (thou.) (*) |  | 4,921,719 |  | 32,576,843 |  |  |  |  |  |  |  |  |  | (5,359,571) |  |
Net revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Domestic market |  | 7,818,552 |  | 829,268 |  | 238,240 |  | 1,416,612 |  | 407,671 |  | 487,129 |  | (2,491,006) |  | 8,706,466
Foreign market |  | 5,140,471 |  | 3,791,703 |  |  |  |  |  |  |  |  |  | 885,961 |  | 9,818,135
Total net revenue (note 21) |  | 12,959,023 |  | 4,620,971 |  | 238,240 |  | 1,416,612 |  | 407,671 |  | 487,129 |  | (1,605,045) |  | 18,524,601
Cost of sales and services |  | (10,537,547) |  | (3,005,840) |  | (156,997) |  | (1,024,696) |  | (285,085) |  | (512,762) |  | 1,926,786 |  | (13,596,141)
Gross profit |  | 2,421,476 |  | 1,615,131 |  | 81,243 |  | 391,916 |  | 122,586 |  | (25,633) |  | 321,741 |  | 4,928,460
General and administrative expenses |  | (963,822) |  | (158,958) |  | (27,943) |  | (94,921) |  | (27,098) |  | (80,823) |  | (877,383) |  | (2,230,948)
Depreciation (note 22) |  | 658,587 |  | 490,805 |  | 15,752 |  | 294,571 |  | 17,265 |  | 121,801 |  | (190,016) |  | 1,408,765
Proportionate EBITDA of joint ventures |  |  |  |  |  |  |  |  |  |  |  |  |  | 538,170 |  | 538,170
Adjusted EBITDA |  | 2,116,241 |  | 1,946,978 |  | 69,052 |  | 591,566 |  | 112,753 |  | 15,345 |  | (207,488) |  | 4,644,447
Sales by geographic area |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asia |  | 23,364 |  | 3,592,226 |  |  |  |  |  |  |  |  |  | 885,961 |  | 4,501,551
North America |  | 2,009,337 |  |  |  |  |  |  |  |  |  |  |  |  |  | 2,009,337
Latin America |  | 506,951 |  |  |  |  |  |  |  |  |  |  |  |  |  | 506,951
Europe |  | 2,564,823 |  | 197,701 |  |  |  |  |  |  |  |  |  |  |  | 2,762,524
Others |  | 35,996 |  | 1,776 |  |  |  |  |  |  |  |  |  |  |  | 37,772
Foreign market |  | 5,140,471 |  | 3,791,703 |  |  |  |  |  |  |  |  |  | 885,961 |  | 9,818,135
Domestic market |  | 7,818,552 |  | 829,268 |  | 238,240 |  | 1,416,612 |  | 407,671 |  | 487,129 |  | (2,491,006) |  | 8,706,466
Total |  | 12,959,023 |  | 4,620,971 |  | 238,240 |  | 1,416,612 |  | 407,671 |  | 487,129 |  | (1,605,045) |  | 18,524,601
(*) The ore sales volumes presented in this note take into consideration Company sales and the interest in its subsidiaries and joint ventures. · Adjusted EBITDA Adjusted EBITDA is the main measurement based on which the chief operating decision maker assesses the segment performance and the capacity to generate recurring operating cash, consisting of profit for the year less net financial income (expenses), income tax and social contribution, depreciation and amortization, equity in results of affiliated companies, results of discontinued operations and other operating income (expenses), plus the proportionate EBITDA of joint ventures. Even though it is an indicator used in segment performance measurement, EBITDA is not a measurement recognized by accounting practices adopted in Brazil or IFRS, it does not have a standard definition, and may not be comparable with measurements using similar names provided by other entities. As required by IFRS 8, the table below shows the reconciliation of the measurement used by the chief operating decision maker with the results determined using the accounting practices:
|  | 12/31/2019 |  | 12/31/2018 |  | 12/31/2017
Net income / (loss) for the year |  | 2,244,511 |  | 5,200,583 |  | 111,229
Depreciation / amortization / depletion (note 22) |  | 1,421,704 |  | 1,175,107 |  | 1,408,765
Income tax and social contribution (note 14) |  | (833,778) |  | 250,334 |  | 409,109
Financial income / (expenses) (note 24) |  | 2,131,184 |  | 1,495,643 |  | 2,463,627
EBITDA |  | 4,963,621 |  | 8,121,667 |  | 4,392,730
Other operating (income) / expenses (note 23) |  | 1,903,081 |  | (2,705,337) |  | (177,342)
Equity in results of affiliated companies (note 8b) |  | (125,715) |  | (135,706) |  | (109,111)
Proportionate EBITDA of joint ventures |  | 510,072 |  | 568,045 |  | 538,170
Adjusted EBITDA (*) |  | 7,251,059 |  | 5,848,669 |  | 4,644,447
(*) The Company discloses its adjusted EBITDA net of its share of investments and other operating income (expenses) because it understands that these should not be included in the calculation of recurring operating cash generation.

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