CSN Mineração S.A. ($CMIN3)

Good morning, ladies and gentlemen. At this time, we would like to welcome everyone to CMIN's conference call to present the results for the first quarter '26. Today, we have with us the company's executive officers. We would like to inform you that this event is being recorded on. [Operator Instructions] This event can be accessed at the IR site, ir.cmin.com.br, where the presentation is also available. The replay of this event will be available soon after closing. Before proceeding, please bear in mind that some of the forward-looking statements are mere expectations or trends based on current assumptions and opinions of the company management. There could be differences from those expressed herein, as they do not constitute projections. In fact, actual results, performance or events might differ materially from those expressed or implied by forward-looking statements. As a result of several factors, such as general and economic conditions in Brazil and other countries, interest rates and exchange rate levels, future rescheduling or prepayment of debt denominated in foreign currencies, protectionist measures in the U.S., Brazil and other countries, changes in laws and regulations and general competitive factors at a global, regional or national basis. We will now turn the floor over to Mr. Pedro Oliva, the CEO -- CFO, I'm sorry, and IRO, who will begin with the presentation. You have the floor, Mr. Oliva.

Well, good morning to all of you. I would like to begin by thanking all of you for your attendance at the CMIN call. We begin the presentation with our first quarter '26 highlights. CMIN has its own production record for the first quarter with a growth of 6.7% vis-a-vis the first quarter '25. Additionally, we also had a new shipment volume record at TECAR for the first quarter with 8.72 million tons shipped through the terminal. We had a reduction in third-party purchases as a way to prioritize shipments of our own production as they have better margins. The strong rainfall in the period also impacted the operation of our suppliers and their capacity to deliver additional volumes. We had a quarterly decline in the C1 cost despite lower fixed cost dilution and a stronger exchange rate. We delivered an EBITDA margin of 44.9% in the first quarter of '26. Profitability growth supported by lower C1 and a higher own production share in sales. On the following slide, we have the production volumes and inventories. The figure was 10 million tons, a drop of 1.5% compared with 10.2 million in the first quarter of '25. We reached a new record in our own production, even in a quarter with intense rainfall. Once again, this points to the resiliency of our operation. In the comparison with the fourth quarter '25, the 14.9% decline is the result of the natural seasonality of the mining business. We ended the quarter with 3.1 million tons in the first quarter, a growth of 9.1% vis-a-vis the previous quarter and a reduction of 19.7% when it comes to the same period of '25. The increase in inventories compared to the fourth quarter reflects a strong production volume and shipment limitations due to weather conditions. In the following slide, we see the sales information. We reached 9.6 million tons sold, a figure aligned with the 9.6 million of the first quarter '25. Now this stable volume vis-a-vis the previous year regarding the quarterly drop is simply a reflection of seasonality of the period. TECAR reached a new shipment record for the first quarter, totaling 8,720 tons. The annual revenue decline was BRL 3.1 million compared with BRL 3.4 million in the first quarter of '25 and BRL 4.1 billion in the fourth quarter of '25. The annual revenue decline exclusively reflects the impact of exchange rate fluctuations as volume and prices remain stable. Maintenance of unit net revenue despite freight pressures demonstrates the consistency of iron ore prices during the period. In the following slide, we see price realization. Unit revenues in the first quarter were $62.6 per ton. This represents a drop of $0.70 per ton vis-a-vis the previous quarter. Now this, despite the Platts61, and we're using a new methodology of Platts with a Platts61, as you see on the slide. This was $104 per ton with a growth of $0.80 vis-a-vis the previous quarter, and our QP Basket had a positive impact of $1.3 per ton compared with $0.2 of the previous quarter. The factors that reduce price realization were quality $11.6 per ton, worse than in the previous quarter. Sea Freight, as you all know, that increased during the period, but even so very close to the previous period of $22.7, an increase of $0.07 per ton and an impact of QPs of previous periods of BRL 0.08 per dollar. In the following slide, we see COGS ex depreciation. We ended the quarter with BRL 1.6 billion, a drop of 26% vis-a-vis the previous quarter and 13% compared to the same period in '25. This significant decline in COGS on both annual and quarterly comparisons reflects lower purchase volumes in the period. Adjusted EBITDA reached BRL 1,420 million with a 44.9% margin in the period. This profitability increase reflects cost control and improved sales mix with an increase in share of our own production. To speak about adjusted EBITDA in the fourth quarter last year, we began with BRL 1,760 million. We had a drop to BRL 1,400 million in the first quarter of '26. When compared with the previous quarter, this is a direct result of seasonality with the lower volumes in the period. Additionally, performance was also impacted by higher freight costs and the negative impact of shipments exposed to future quotation periods. On the other hand, the better sales mix partially offset these effects. The increase in own production was BRL 95 million, allowing us to have the good results in the first quarter. When it comes to our investments, we reached BRL 431 million in the first quarter with BRL 272 million for operational continuity, the rest for expansion of business. Now this represents a drop of 51% vis-a-vis the previous period, and a growth of 14.3% vis-a-vis the same period in '25. That strong quarterly drop shows a reduction of CapEx, with an annual growth of 14.3%. That is a result in the advance of infrastructure and civil works for P15, besides investments to increase operational efficiency, of course, leading to successive records in the company. Regarding our net working capital in the first quarter, it was positive in BRL 1.2 billion, a significant increase compared to the fourth quarter '25 and first quarter '25, resulting from the sharp reduction in accounts payable due to lower third-party purchase volumes as they had difficulties in shipping their own production. Here, we see the company's indebtedness. CMIN ended the first quarter with BRL 8.9 billion in availability, showing stability vis-a-vis the previous quarter. Net debt decreased to BRL 683.1 million in the period, with a leverage ratio measured by net debt last 12 months EBITDA remaining at 0.11x. The company, therefore, remains with a solid capital structure to be able to continue with its P15 capacity expansion projects. In the next slide, we see adjusted cash flow that was negative in BRL 520 million in the first quarter, reflecting seasonality with lower volume, higher working capital consumption and the impact of financial results. In the next slide, we see data on net income. The company recorded BRL 222 million in the first quarter, reversing the loss observed in the same period of 2025. The decline is a direct result of business seasonality and higher financial expenses related to exchange rate fluctuations. In the fourth quarter, the exchange rate fluctuations had a positive effect on our cash. We have dollars converted to real, and this had a positive impact. As usual, we end the highlights of the quarter with our ESG topics. In tailings in March, the mining agency renewed stability for all of the CMIN tailing dams. In health and safety, we had a reduction of 33% in number of accidents involving third-party employees and the maintenance of 0 fatalities. In social and diversity, we had an increase of 10% in female representation in leadership positions vis-a-vis the first quarter '25. In environmental management, I highlight the reduction of 21% reduction in greenhouse gas emissions for ore production compared to the baseline of 2020. Now I would like to end by highlighting that on April 16, we had the approval of dividends amounting to BRL 768 million. The payment of these proceeds and equity shareholder appeared in 2025 totaled BRL 1.19 billion and will be carried out until December 31 of this running year. With this, I conclude the presentation. Before we go on to the Q&A, I would like to give the floor to the Chairman of the Board, Mr. Benjamin Steinbruch.

Good morning, everybody. I would like to thank, of course, Pedro for the presentation, state that we had another excellent quarter for mining and the main highlights once again are the new record of own production for the first quarter, a growth of 6.7% vis-a-vis the first quarter '25, a new record in volume shipped through TECAR with 8.720 thousand tons and an increase in EBITDA margin to almost 45%, 44.9% vis-a-vis the previous quarter and a greater share of our own production in sales. We want to produce ever more. What I would like to share with you is that within our proposal for mining, we have been quite successful. We have an improvement in production, a production record that we have been achieving successfully quarter-on-quarter, and a significant cost reduction to ensure that the margin could increase, and to have a differentiated performance in shipment. I would like to thank the CMIN team as a whole, those that are in production, Pedro and the entire team for that effort that they have been setting forth to increase production quarter-on-quarter for the cost reduction and for the people working at the port for the shipments we have been able to achieve in a quarter where we had intense rainfalls, a very large quantity of rain, but more importantly, with enormous rainfall. There were days when we had true storms at the mines and at the port. As you know, this truly hampers all of the operations, both in operation, transportation and shipment. Despite these challenges this quarter, we achieved this exceptional result. What is more important is that we continue on with these records. I truly would like to thank the entire CMIN team for their efforts. We congratulate each and every one of them for an exceptional quarter. I thank all of you for your attendance in the call and return the floor to Pedro.

Thank you, Chairman. We will now go on with the question-and-answer session.

[Operator Instructions] The first question comes from Rafael Barcellos from Bradesco BBI.

The first question is about production and sales. Pedro, you remark on inventory in the first quarter. We know that you have been working with higher inventories. In your vision, how is the company operating versus the normal inventories? Will this increase sales for the second quarter when it comes to your own production and purchase from third parties? How much of that reduction of third-party purchases comes from market conditions, freight or climate in general? And should we see an increase in purchases from third parties throughout the year about the freight, which is your market vision, the Brazil-China route rate has reached $37. We know this impacts some companies in the sector. I would like to know the measures adopted by CSN to mitigate that freight issue.

Well, thank you for the question, Rafael. In fact, we did have a share of purchases this quarter below what we had in the recent past. And this refers to two factors that exceptional performance at the mine enabled us to expressively increase our own production. We prioritized the logistics system for our own production, but we also face the difficulties of our suppliers associated to climate problems and not economic problems or feasibility of their operations. As all of you know, and you have followed up on the news, what happened in Juiz de Fora, which is not far from our operations to show you the context and the challenge faced by our teams at the beginning of the year. Now this exceptional performance at the mine enabled us to focus on the outflow of our own production. And I think this coincided with the greater difficulty of delivery on the part of our suppliers, and that is why we had a reduction in purchases. Looking ahead, I believe our suppliers are now in a better situation. They have successful operations, and we are confident that we will relevantly increase our purchases now for the second quarter. When it comes to inventories, if you look at the last quarters, in fact, the company has operated at lower levels. This increase in the first quarter is a onetime issue related to the exceptional performance of the mine and the record that we had for a first quarter at TECAR. Lower shipments, which we will have in the second, third and fourth quarters, of course. Our quest here, Rafael, is to release working capital. And one of the fronts for this will be to continue to work on inventory reduction as we did in 2025. Regarding freight, in fact, we do have a dynamic on the part of demand. We have strong demand for ships. And this comes from an increase in the iron ore market year-to-date, an increase of 8 million tons in our market. We also have pressure coming from bauxite in Guinea with a significant increase in demand and full-size ships that we use to transport our iron ore to markets of destination. Now while we continue to witness the conflict in the Middle East and the closing of the Hormuz Strait, albeit partial, this does have an important impact on the oil prices, and this should sustain the high values of bunkers and with that, sustain the C3 at levels above $30. As you said yesterday, it was $37. Today, we had a marginal drop to $30.6. It's been a while since we saw such high prices, but we see the resiliency of iron ore, and to redress that cost, we can see that we have great resilience of the iron ore and cost with that price of freight. We would have the exit of important volumes in our market, and we could supply iron ore, of course, to the market with greater facility.

Our next question comes from Mr. Ricardo Monegaglia from Safra.

I begin with a question on CapEx and what we can expect this year when it comes to absolute CapEx and the share per quarter, given the appreciation of the real. Pedro, if you could remind us of your exposure of CapEx to the dollar. We have a more appreciated real. That's the first question. The second question is price realization. If you could remind us what we could expect in terms of quality evolution this year? And well, let's think about the short term. The next quarter, there was some rain this quarter that impacted the quality of your material. Will we be seeing an improvement in the coming quarter or the opposite effect?

Thank you for the questions, Ricardo. Regarding the CapEx, in the first quarter, we had an expansion CapEx. It had significant growth vis-a-vis the same period last year. We did have the impact of this high rainfall on the advance of our civil works. This did not cause any delay. The B15 schedule has been maintained. The expectation is to have a material increase in the second and third quarters. Last year, we had a total CapEx of BRL 2.3 billion. We believe that this year, because of the expectation of the positive advance of the P15, we should go beyond the BRL 3 billion with a significant share in the second and third quarters. The CapEx could increase twofold. Regarding the appreciation of the exchange rate, this ends up having an impact more on our C1, Ricardo, less on our CapEx. Most of the exposure to the dollar in our P15 CapEx is associated to the purchase of equipment internationally. We have received most of the equipment so far. We could have indirect exposure to exchange rate. Well, we have local suppliers for the exchange of tubing that will connect our processing plant to the filtering plant, but we won't have a material impact of the exchange rate on our CapEx. Luckily, we are still in line with the market expectation that we had since the beginning of the project. Now regarding price realization, the expectation is that quality will remain at present-day levels. We're using Platts62 between $10 to $15. We had $11.9 for silica. We were performing with very poor quality, Ricardo, and this variation in the figure depends more on market conditions and the distribution of cargoes during the year. We don't expect to have material variations until the coming into operation of P15 in the coming year, where the company will operate with a materially higher quality and quality adjustments in the near future will become a quality prime.

Our next question comes from Mr. Gabriel Barra from Citi.

We have two points here, simply follow-ups. One regarding CapEx for P15. If you could speak about the pipeline, the advance, the progress, the scenario, if it continues to be geared to the delivery in 2027, which is your evolution pipeline for P15? Now you've spoken about cost. You've spoken about this broadly. I would like to get more details. You spoke about freight, there's the issue of energy, other issues that we have heard about in the discussions we have on the price of commodities for coming quarters, freight, energy and much more, which will be the cost evolution for the second quarter? What can we expect in terms of a material impact on your results for the coming quarter? These are our 2 questions.

Thank you for the questions, Gabriel. Regarding the CapEx for P15, we have disbursed a bit above BRL 2.2 billion. We have important landmarks during this year, the electromechanic assembly for the filtering area. And once again, the tubing that I mentioned a short while ago. In the first quarter, we had the impact that I have already mentioned, but we have concluded most of the infrastructure. We were decreasing the pace of infrastructure and civil works. These were being mobilized. We had little to do in the first quarter. That is why we are now advancing at full speed in civil works that will take the CapEx to another level. Now the expectation of 2027 has been maintained for a project of that magnitude, we face enormous challenges of not having delays in our country since 2024. We had already worked with that target of the end of 2027, and we maintain that date. Regarding the costs impact, we do have the increase of oil that generated a significant increase in the freight cost on February '28. Before the conflict, the C3 route was $23-some per ton. In the second quarter, we were expecting an increase in the price of freight, but not with the magnitude that we were able to verify at $36.9, an increase of $13.45 per ton. As we mentioned, Gabriel, luckily, the price of ore has accompanied the increase in freight price. Platts61 is at $111.01 and the other at $114, an increase of $1.8 per ton in the period, offsetting that increase in the price of freight. We have a positive reading of the market. Therefore, we believe that, that level of a C3 above $30, the blast will have to be above $110 differently from other players, some juniors in Australia or even in Brazil that have a greater exposure to the oil price because of their long highway routes to transport the iron ore. Now they're being more penalized that we are -- luckily, we have been able to reduce our COGS per ton and even the C1 vis-a-vis the previous quarter, where we had a reduction. In the coming quarters, we'll have the exchange rate pressure, but naturally, management has adopted several measures to reduce the cost and offset that pressure of the exchange rate.

Our next question comes from Mr. Marcio Farid from Goldman Sachs.

We have two follow-ups. Pedro, in freight, you're exposed to the spot price, and there is no hedge in the bunker system. I would like to confirm that. And if you could give us data on the sensitivity of C1 with the different prices, another inflationary pressure that you have felt simply to understand how this could impact the year. You spoke about the P15. It seems to be very much in line for the end of 2027. If you have other updates on projects in our pipeline, the PK could be necessary if the P15 comes into commissioning and your tailings operation, partnerships in processing. I would like to know if you have any update in these parallel projects?

Marcio, several questions regarding the freight issue. In fact, we do have an exposure, not 100%, but practically that. We have 1.8 million tons this year at the average price of $21.1 per ton. So yes, we are exposed to the bunker and to spot prices. Regarding the C1 between $22 and $23 per ton, despite the exchange rate pressure, we began the year at a consistent level, consistent with our guidance. We have that higher bunker, but freight, as we remark here, in truth, to be very honest, diesel is below what we had projected in our budget. There's that combination, not only of the price increase, but the price policy that the country has adopted in our negotiations, but luckily enough, nowadays, this has not been a pressure driver for our C1 up to the moment. Regarding the projects, P15, in fact, is according to schedule, advancing well in BK that exposure will occur. It is a regulatory obligation, and we do need that additional capacity because of our expansion plans for our own production in coming years. Recently, we contracted civil offshore, but it's something, well, the CapEx will be executed throughout several years. It's not a need that we have to conclude this immediately, for example. So it will not overburden our balance materially, not this year or the coming year. Regarding other projects, the one that we can announce, we do hope it will be in the fourth quarter. It is one of the projects for the recovery of tailings, the project that you mentioned. Now in principle, it's something we would like to work within partnership, if the negotiations are attractive for CMIN. I do believe they will be. We are conversing with 3 peers simultaneously that are interested in working in partnership with us. We hope to be able to make a decision on that in the coming months.

Our next question comes from Mr. Edgard Pinto de Souza from Itau BBA.

My first question is a follow-up, referring to the question made by Farid, just now. If you could give us more color in terms of TECAR, I understand this is a gradual process that you don't need to invest in this because of the P15. If you increase the ramp-up of P15 in the coming year, you're running TECAR very close to its capacity limit. My doubt regarding that project is how long will it take to execute this, the expansion of capacity of TECAR, if it doesn't come at the same speed as the ramp-up of P15, which are your alternatives to ship through other ports, use third parties? How long would this project take to be fully executed? These are my questions regarding TECAR here. And well, as we're speaking of TK, if you have an update on the carve out of TECAR, if this is something you pursue, or if this is not a company priority for the moment in your divestment policy for the holding? And along the same lines, Pedro, according to my account, you have about BRL 7.5 billion of prepayment maturing this year. We have seen some prepayment to renew the contracts in the first quarter, which will be the renovation rate this quarter, if those 22.6% will mature. Last year, you had a slight mismatch at the end of the year. And if you have a time line, if you're going to end this at the beginning of the year in the second quarter. Once again, if you could give us more color in terms of your prepayment, that would be helpful.

Thank you for the question, Edgar. I will give you more color regarding TECAR, which is a concession. It was recently renewed. Now associated to that renewal, we have that plan and obligation to expand capacity to 60 million tons. In-house, we would like to conclude that project between 2030, 2034, all of this will depend on a variety of factors. Among the alternatives we have and depending on market conditions going forward, we will prioritize our own production. But we're also seeking value over volume. We want to value all of this with the coming into operation of P15, and work less with third parties, as you mentioned, we believe that TECAR is an exceptional asset for the group. Now to speak about the second question of carve-out -- carve-out, sorry, the structuring of an infrastructure vehicle for the group with details that will be defined in the coming months will hamper the value equity. We are displacing equity from A company to B company. So what we're going to do is maximize value for our shareholders, considering the assets we have in our portfolio. Regarding the prepayment, throughout 2026, we have 15.4 million tons maturing. Part of this has already matured is that those 7.5 million tons have been pushed to the second quarter of 2026. We have already contracted a new prepayment of $300,000 in the first quarter of '26. We had already communicated this to the market. Now from the financial viewpoint throughout 2026 for the entire year, we have $666.1 million in prepayment. We have already rolled out $300 million of those $666. Until the end of the year, we hope to carry out new operations for the remaining value of $366 million. We won't do this in a linear way, of course. We paid half of this amount in the first quarter. But this is what we expect to do throughout 2026.

A simple follow-up regarding TECAR. I understand the flexibility making adjustments with third parties. To put it into figures, if that last guidance that you updated to produce between 50,000 and 60,000 tons in '28, '29, there's a significant delta volume being produced already and sold. Of course, there's a part that remains in the domestic market. Where would you outflow this production through third-party ports?

Given the investments in TECAR that only begin in 2030, beginning in 2030, we could conclude the works if we wanted to, that increase to 60 million tons. We don't have the outlook of going from 45 million to 60 million. It's not a single trigger. The investments being made are unhampering capacity through time. This is not linear. We increased capacity. It's not only that in the last month of the work execution that we will have the benefit of that capacity gain. There's another variable that the market perhaps has no visibility on. It's an initiative that we're working with as a great priority. The expansion of the draft of the channel that gives access to TECAR. We have a neighbor that did that very successfully in his property, and we're working on that to make it feasible. That alone will represent a drop of freight for us. We can work with larger ships and a freight reduction will bring about a capacity gain at that of some million tons. This will also help us to address that point that you have just asked about.

Our next question comes from Mr. Guilherme from XP.

I have two questions here. My first question refers to your working capital consumption that you posted for the quarter. This is in accounts payable, and it refers to a greater volume of purchases from third parties, which was that volume that you closed for the third quarter? And that should become normalized in the coming quarters, increase the volume of third parties. And if you still have that goal of 25% to 27% of your volume coming from third parties. And if the consumption -- well, which will be the evolution of working capital during the year? My second question refers to the supply and demand dynamic of iron ore. If you could comment on this, there was a discussion, a ramp-up. Is there any adjustment of route because of what is happening in the Middle East? And which is your outlook on demand looking ahead? That would be very helpful.

Guilherme, it's not about purchases from third parties that impacted our working capital. We had a very low volume of third-party purchases, 2.1 million tons in the first quarter. If we compare this with the fourth quarter, we had 3.3 million tons, a drop of approximately 30%. And vis-a-vis the first quarter '25, we had 2.75 million tons. Also, we had an expressive drop. For the rest of the year, we hope to recover that volume vis-a-vis the first quarter. We would like to have a volume higher than 2025. We had a guidance of 45 million to 47 million tons for this year. So our expectation is to increase not only our own production as is expected because of seasonal effects, but to significantly increase the purchases this quarter, it represented 22% of sales, and we're convinced that throughout the year, this will go beyond the 25% that you mentioned. Now about our reading of the market for iron ore, the question on demand. The inventories are higher. In fact, this year in China, and this can be easily explained because of the increase of supply of 18.6 million tons. This stronger demand comes mainly from Australia that has increased 3 million to 4 million tons. Now this in China, well, China still has a negative margin of $2.6, more negative than it was in previous quarters. And there's a percentage of profitable mines in China of 60%. This is a very low level, but better than it was 1 year ago, marginally better. What has supported the iron ore consumption is the use of other furnaces in China going back to the level of 90%. And what we see now is a higher price since October of 2025. The steel price reacting a bit, and the same holds true for the price of iron ore. We see a demand in China despite the reduction of the real estate market. Once again, there is strong infrastructure, especially in expanding the capacity of energy and sanitation and good data referring to manufacture. The PMI rating standing at 52.2%, compared to 52.8% in March. This is the highest increase since December of 2020. Despite a macro environment that isn't very favorable, we see some promising data in the Chinese market. The indirect exports of steel in China are strong with a growth of more than 10%. Export of automobiles, the white line, not only to Brazil, they're getting to different markets. And the indirect exports of steel are going mainly to Europe and the United Kingdom at present. From the viewpoint of other markets, we have a positive expectation for Europe. The data have not been very good and strong demand in the Asian Southeast, offsetting the reduction we have observed in Japan in the last few months. The ex-China market with demand growing 10 million tons of imports of iron ore. So because of the conflict per se, I won't say the impact is neutral. Iran was an important exporter of iron ore, and other countries in the region were importing about 30 million tons. So the effect is not nil. There is the effect of additional volumes being offered in other markets that are not being absorbed by the Middle East, but nothing material so far. Now this pressure on freight will end up having an impact, and we haven't spoken about the markets that use ships with lower capacity that use Panamax instead of trip size for those routes, the impact and the increase in fuel price, well, the impact will be even greater. We have marginal producers in India, for example, that use this type of lower ship, they're suffering more. And in our opinion, this is what is going to sustain Platts at higher levels during the year, while the freight price continues high.

Two points that I forgot to address BHP and CMP.

Our relationship with BNP, they've been a good client, not expressive, but we have negotiated cargoes at market prices. It's a good door of entry into the Chinese market with relatively low volumes as was expected. In April, we had 1.2 million tons, for example, close to 15 million tons expected for 2026.

Our next question comes from Artur Diskwala from UBS.

I have two follow-ups regarding your prepayment contracts. At the last call, you said you were able to close these contracts with ever-lower spreads. I would like to understand from you how far that reduction of spread is due to a lower risk of negotiating with CMIN? Or is it a sign that clients are structurally more bullish in high-quality iron ore? The second question regarding funding. You never had that policy of paying out 100% of dividends, and you're raising through prepayments. Is there any arbitrage between the cost of funding and the return to shareholders if this will stop making sense for you at some point in time or not?

Thank you for those questions. Regarding prepayments, the lower spreads are a result of imbalance at CMIN and the result of its excellent performance in each of its contracts. We have contracts with different counterparts for many years, and we honor them strictly with banks that are accompanying the good performance of the company for years. I believe that this is due to the valuing of the relationship with CMIN from the part of our counterparts and not the quality of the iron ore. In the last quarters, there has been no relevant variation in quality, and there shouldn't be one until the coming into operation of P15. Now the volume of P15 is not committed with any of these prepayments. Regarding the issue on dividends, yes, this is a core issue that we have communicated to our investors since the IPO. We stated we would have an aggressive policy of paying out dividends, and we have performed in terms of that. When you look at the balance of 0.11x leverage, we can maintain this aggressive policy for the payout of dividends. This is the core element in the thesis of our investments given the sector where we are active. And we're convinced that we will maintain this along with a CapEx that will increase pace because of P15. This will lead to an increase in leverage of the company, but to adequate to healthy levels, perhaps more efficient levels to structure our balance and to represent lower payments of income tax. It will be a tax shield that, in our opinion, makes sense and is efficient.

Our next question comes from Mr. Rafael Barcellos from Bradesco.

I made a question at the beginning of the call. I would like to take advantage of the session to mention 2 points that have not been approached so far, Pedro. In P15, as part of the schedule you have going forward, which are the main risk factors that you are monitoring to have a successful project execution? And after everything we have discussed here, which is the possibility of paying out dividends? How are you thinking about capital allocation? We would like to hear this.

Rafael, thank you for the questions. Well, this is the first time we allow analysts to speak twice, very prestigious, but it is a pleasure to answer your questions. Now P15 with a project of this magnitude, there are natural risks of immobilization of labor. We have a large contingent of people that are necessary to execute that work in an environment with low employment rates in Minas Gerais in the iron ore sector of the region. And we have the critical path of hiring, mobilization and execution of that very important package of electromechanical assembly. We have 2 different projects, one for the processing plant, the other for the filtering plant. And we also have the hiring of the assembly for the tubing that will connect the processing plant to the filtering plants that are at 7 kilometers distance. These are important elements. Now the good performance of the civil work is, of course, a critical item, fortunately, everything has worked out very well. And to speak about the main risks, nowadays, there is no reason to believe that the risk will materialize. We have several actions to mitigate the risks. We have the problem of rainfall in Minas Gerais. For this year, we have overcome the problem. We have another important period in the coming year, but the greatest risk was in the execution of infrastructure works that are more impacted by rainfall, and we're well advanced in terms of the assembly so far. Regarding dividends, Rafael, we do have that practice. It's not a formal policy, but we pay out 85% of our net profit, and we intend to maintain that practice throughout the coming quarters. We have already announced proceeds of BRL 1.19 billion that will be paid out until the end of 2026. And for the coming quarters, we should maintain that practice of paying out strong dividends.

Our next question comes from [ Renaldo ] Investor.

Congratulations for the results. Is there the possibility that CMIN will acquire any other assets from CSN or increase the payout percentage because of the leverage of the controlling company?

Renaldo, thank you for the question. Presently, there is no mature discussion regarding that topic. We have the share of MRS. This was communicated by the group as part of the initiative. It's not part of our scope, but in the beginning of January, we were focused on the investment in cement. And that has been the focus for the deleveraging of the group.

As we have no further questions, I will return the floor to Mr. Pedro Oliva, the CFO and IRO for the company's closing remarks.

I would like to thank all of you for your attendance at our earnings call, thank the Chairman of the Board and of course, thank all of our employees for the operational records at the mine and at the port. This has sustained the good results, the dividends for shareholders. We will continue to work so that 2026 will be an exceptional year.

Thank you. The CMIN call has ended here. Have a good day.