CSN POSTS 1Q08 NET INCOME OF R$ 767 MILLION. NET REVENUE REACHES
R$3.0 BILLION AND EBITDA TOTALS R$ 1.3 BILLION

São Paulo, Brazil, May 7, 2008

Companhia Siderúrgica Nacional (CSN) (BOVESPA: CSNA3) (NYSE: SID) announces today its results for the first quarter of 2008 (1Q08), in accordance with Brazilian accounting principles and denominated in Brazilian Reais (R$). All comments presented herein refer to the Company’s consolidated results and comparisons refer to the first quarter of 2007 (1Q07), unless otherwise stated. On March 31, 2008, the Real/US Dollar exchange rate was R$ 1.749.

• CSN posted a 1Q08 net income of R$ 767 million, 51% up on the previous quarter and flat over the 1Q07, when the Company recognized non-recurring gains of R$ 255 million (net) from the transaction involving the offer for all the shares of the UK-based Corus group;
  
  
• Steel product sales volume totaled 1.4 million tones in 1Q08, a new first quarter record, 17% up on the first quarter of 2007 and flat when compared to 4Q07, a period when sales are traditionally higher prior to the end-of-year holidays;
  
  
• The domestic market accounted for 80% of quarterly sales volume and the exports for 20%. In March 2008, the ratio of sales on the domestic market, where margins are traditionally higher, over total sales volume reached the record level of 84%;
  
  
• First-quarter net revenue totaled R$ 3.0 billion, a quarterly record, 22% up year-on-year and slightly more than the 4Q07, when sales are traditionally higher;
  
  
• The Company recorded a 38% share of the domestic flat steel market, led by tin plate, galvanized, hot-rolled and cold-rolled which posted respective growth of 1%, 4%, 3% and 6% over 4Q07;
  
  
• 1Q08 EBITDA came to R$ 1.3 billion, 26% more than in the 1Q07 and 1% higher than the 4Q07, while the EBITDA margin stood at 42%, 1.5 p.p. wider year-on-year and flat in quarter-over-quarter terms. In the last seven years, CSN’s EBITDA margin has never fallen below 40%;

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• Net debt closed the quarter at R$ 4.8 billion, R$ 1.3 billion down on the 1Q07 and stable in relation to the previous quarter, even after the dividend payment and investments of R$ 800 million and R$ 400 million, respectively. The LTM net debt/EBITDA ratio stood at 0.93x and the debt-to-equity ratio at 2.17;
  
  
• CSN’s shares appreciated by 19% in the 1Q08 and by 111% in the last 12 months. Appreciation in dollars came to 21% and 148%, respectively.
  
  
• Through March 31, 2008, total shareholder returns came to 1,963% in the last 5 years and 122% in the last 12 months. Through May 5, 2008, figures stood at 2,120% and 147%, respectively.
  
  
• In the 1Q08, CSN’s shares appreciated by 19%, the 5^th highest among all the companies listed on the BOVESPA. In the same period. CSN’s ADR’s moved up 21% on the NYSE, the 8^th highest among all the Latin American ADRs.
  
  
• As a result of this healthy share performance, on May 6, 2008, the Company’s market capitalization (including shares held in treasury) totaled US$ 35 billion, the 5^th highest among all the world’s steelmakers.

Brazil

Brazil’s economy remained buoyant throughout the 1Q08, with the strong expansion of credit, the growth in the bulk of wages and the increase in investments all helping to fuel industrial activity.

The overall macroeconomic outlook remains favorable, both in 2008 and 2009. Average GDP growth estimates for 2008 increased from 4.5% to 4.6%, while the 2009 forecast remained stable at 4%.

Agriculture, industry and services are expected to record growth of 4.9%, 4.7% and 4.4%, respectively, in 2008, followed by 4.5%, 4.4% and 4.1% in 2009.

As for inflation, market expectations for the 2008 consumer IPCA index have risen to 4.8%, which is above the target imposed by the Brazilian Central Bank, although the estimate for 2009 (4.4%) remains unchanged. The projections for the general IGP-M index are 6.3% for 2008 and 4.5% for 2009.

As a result of the high installed capacity use coupled with the recent increase in food prices, the Central Bank increased the SELIC (Brazil’s base rate) by 0.5 p.p. to 11.75% p.a. The year-end SELIC is estimated at 13% p.a., falling back to 11.5% p.a. at the close of 2009.

Despite prospects of a higher base interest rate, the total credit is still expected to grow by 22% this year, with individual and corporate loans rising by 25% and 24%, respectively (Focus/Febraban figures).

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On the sector front, the healthy state of the Brazilian economy was reflected in the 1Q08 numbers for domestic steel product sales.

Domestic crude steel output totaled 8.6 million tonnes in the quarter, 8.1% up on the 1Q07.

Total rolled production volume moved up 6.5% to 6.5 million tonnes, while production of rolled flat products grew by 1.7% to 3.9 million tonnes.

In the 1Q08 total domestic sales volume jumped 22% year-on-year, with rolled flat and long steel volumes climbing by 19.0% and 27%, respectively.

The steel consuming sectors also did well, especially the automotive, home appliance/OEM, construction and domestic utility industries.

The automotive industry continued to shine. Vehicle production totaled 783,000 units in the 1Q08, 19% up year-on-year. The outlook for the rest of the year is equally promising, with ANFAVEA (the auto manufacturers’ association) predicting annual output of 3.2 million units. Domestic vehicle sales moved up 31.4% to 648,000 units.

The home appliance/OEM sector, which grew by 11% in 2007, continued to expand in the first two months of 2008, recording year-on-year growth of 9%. Increased earnings and credit are expected to fuel the industry growth (IBS).

In March 2008, the flat steel distribution industry recorded its best-ever month, with sales of 336,000 tonnes. This strong domestic demand is leading the steelmakers to prioritize the domestic market, where prices are currently more attractive than they are abroad.

The outlook for the construction industry in 2008 is even better than in 2007, with expected growth of around 12%, driven by the growth in housing incentive measures, the PAC’s infrastructure and sanitation projects, increased residential construction and sales, and better financing facilities (IBS).

International Market

USA

The US economy is showing signs of slowing, due to the impact of the US sub-prime mortgage crisis and its effects on the banking system, employment, spending and consumer confidence. However, a combination of an increase in the main raw material prices (iron ore, coal and coke), exceptionally low distributors’ inventories and the devaluation of the dollar against the other currencies in an economy that is a net steel product importer to the tune of around 30 million tonnes per year, have pushed up prices by an average 90% since the beginning of the year.

EUROPE

European prices have firmed up in recent months due to higher raw material costs and the reduction in imports from China following the country’s decision to remove export benefits and impose taxes. Prices have gone up by 50% on average since January.

ASIA

The Chinese authorities announced a series of steel export restrictions throughout 2007, including the elimination of rebates on hot-rolled and coated products and the imposition of export taxes on certain items. These measures were announced after China had made export licenses obligatory for steel traders.

The program to modernize the Chinese steel industry has led to the closure of small local plants due to obsolete equipment and low profitability.

China’s economy recorded year-on-year growth of more than 10% in the first quarter, even though production fell somewhat due to severe weather conditions.

Steel product prices moved up throughout the entire region, reaching one of their highest levels since 2003, and they could rise even further, given the strong pressure on production input costs.

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Chinese steel output looks set to grow by 8% in 2008, reaching 530 million tonnes. The majority will almost certainly go to the domestic market, given the deep structural changes that are occurring in Chinese society with increasing urbanization and the consequent need for infrastructure and residential construction.

The Presidente Vargas Steelworks produced 1.2 million tonnes of crude steel in the 1Q08, 6% less than in the 1Q07 and 2.5% down on the previous quarter.

First-quarter rolled steel output totaled 1.2 million tonnes, very similar to the 1Q07 figure.

* Products delivered for sale, including shipments to CSN Paraná and GalvaSud.

CSN’s total production costs came to R$ 1.14 billion in the first quarter, R$ 45 million (or 3.7%) down year-on-year, chiefly due to the following factors:

• Raw materials: A total reduction of R$ 87 million, due to:

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The average cost was R$ 461/t and there has been no impact as yet from the recent price hikes, since the Company has sufficient stocks for three months of production.
Other raw materials: reduction of R$ 7 million;

• Labor: growth of R$ 17 million (19%), thanks to the 5% pay rise in May/07 and the 20% increase in production staff;
  
  
• Depreciation: upturn of R$ 20 million due to the revaluation of the Company’s assets in the 1H07;
  
  
• Others: other costs moved up by R$ 5 million.

Total Sales

Rolled steel sales volume totaled 1.4 million tonnes in the 1Q08, 17% up on the 1Q07 and in line with the 4Q07.

Domestic Market

Domestic sales volume came to 1.1 million tonnes, 10% up on the 4Q07 and 55% up year-on-year. National sales have been moving up substantially since the beginning of 2007, climbing from 60% of total volume in the 1Q07, to 80% in the 1Q08, thanks to CSN’s strategy of prioritizing the home market, thanks to more attractive prices than international ones, coupled with the healthy performance of Brazil’s economy, which fueled demand from steel consuming sectors.

In March/08, 84% of CSN’s consolidated steel product sales volume went to the domestic market, a new all-time record; in the case of the parent company, the ratio was 93%.

Export Market

On the other hand, export volume has been falling in recent months due to the increased routing of sales to the domestic market. In the 1Q08, they accounted for 20% of total sales, down from 40% in the 1Q07.

Market Share and Product Mix

The Company’s share of the domestic flat steel market (hot-rolled, cold-rolled, galvanized and tin mill products) has

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been expanding steadily and reached 38% in the 1Q08, led by tin plate, galvanized, hot-rolled and cold-rolled. CSN recorded respective market shares of 99%, 49%, 34% and 26% for these product lines, representing growth of 1%, 4%, 3% and 6%, respectively, over the previous quarter.

In the 4Q07, CSN had a 47% share of the construction market, 42% of the distribution market, 36% of the home appliance/OEM market, 21% of the automotive market and a massive consolidated 99% share of the steel packaging market.

Coated products accounted for 47% of quarterly sales volume.

On the domestic market, average domestic net revenue per tonne in the 1Q08 remained in line with the previous quarter at more than US$ 1,000/t.

In March/08, the Company raised the price of certain products, as follows: hot-rolled, 13.5%; cold-rolled, 8.5%; galvanized, 3.5% and tin plate, 6%. In addition, further increases have been announced for May, namely: hot-rolled, 15%; cold-rolled, 11%; galvanized, 6.5% and tin plate, 6%. The impact on the Company’s revenue will be felt as of the 2Q08.

Despite the appreciation of the Real against the dollar, average export prices in Reais moved up 14%, when compared to 4Q07 thanks to the international price recovery and the improved product mix.

Despite the big 1Q08 upturn, there is still room for further increases in months ahead. Steel Business Briefing’s Global Market Outlook report contains a survey conducted last February with global steel market players in which 82% of interviewees expected prices to move up in the second quarter.

• PRODUCTION

The Casa de Pedra mine produced 4.1 million tonnes in the 1Q08.

Nacional Minérios (NAMISA) produced 1.2 million tonnes in the 1Q08, while its iron ore purchases from third parties totaled 1.0 million tones in the same period.

The Presidente Vargas Steelworks absorbed 1.8 million tonnes.

• SALES

Consolidated iron ore sales came to 3.6 million tonnes in the 1Q08.

Exports reached 2.8 million tonnes, accounting for 77% of total period sales. The domestic market accounted for 0.8 million tonnes, or 23% of the total.

It is worth noting that the rotary railcar dumper entered the pre-operational phase this quarter. This equipment will raise the Porto de Itaguaí’s iron-ore handling and loading capacity to 30 million tpa.

• INVENTORIES

The Company closed the first quarter with iron ore inventories of around 12 million tonnes.

Net revenue totaled R$ 3.0 billion in the 1Q08, a new record posted by the Company, 22% up year-on-year and slightly higher than the previous three months, thanks to the massive concentration of sales in the domestic market, as dealt with earlier in this report.

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* Including only iron ore figures.

Operating expenses came to R$ 320 million in the 1Q08, R$ 6 million higher than the previous quarter, chiefly due to the R$ 31 million upturn in selling expenses, in turn caused by domestic market sales efforts. This was partially offset by the R$ 25 million reduction in G&A and other operating expenses.

In year-on-year terms, these expenses had a negative variation of R$ 159 million, thanks to the non-recurring accounting impact of CSN’s participation in the Corus acquisition auction in the 1Q07.

First-quarter EBITDA totaled R$ 1.3 billion, 26% up year-on-year primarily due to the upturn in revenue. In quarter-over-quarter terms, EBITDA edged up by 1%.

Once again the EBITDA margin exceeded 40%, reaching 42%, 1.5 p.p. above the 1Q07 and 0.3 p.p. up on the 4Q07.

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The 1Q08 net financial result was positive by R$ 121 million, a R$ 306 million improvement over the previous three months due to the following factors:

• The non-recurring addition of R$ 391 million to provisions for IPI premium credits on exports in the 4Q07;
• A R$ 54 million reduction in gains from financial investments in the 1Q08;
• The R$ 44 million negative effect of the reduced appreciation of the Real in the 1Q08 versus the 4Q07.

Net debt closed the first quarter at R$ 4.78 billion, virtually identical to the R$ 4.80 billion recorded at the end of 2007. The net debt/EBITDA ratio, based on EBITDA in the last 12 months, continued to fall, declining from 0.99x in the 4Q07 to 0.93x in the 1Q08.

The Company posted a net non-operating expense of R$ 1 million in the 1Q08, versus a net expense of R$28 million in the 4Q07, primarily due to fixed asset write-offs in the latter quarter.

Income and social contribution taxes totaled R$ 198 million in the 1Q08, chiefly due to the increase in taxable income over the 4Q07.

CSN posted a 1Q08 net income of R$ 767 million, 51% up on the previous quarter, basically due to non-recurring addition of R$ 391 million to provisions for IPI premium credits on exports in the 4Q07.

First-quarter investments totaled R$ 374 million, R$ 222 million of which went to the parent company and R$ 152 million to the subsidiaries, mostly to the following projects and companies:

CSN:

• Expansion of the Casa de Pedra mine: R$ 87 million;
• Maintenance and repairs: R$ 43 million;
• Expansion of the port of Itaguaí: R$ 9 million;

Subsidiaries:

• MRS (transportation and logistics): R$ 57 million;
• CSN Cimentos: R$ 43 million;

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• CFN: R$ 17 million;
• CSN Aços Longos: R$ 13 million;
• CFM: R$ 5 million.

The remainder went to other projects, especially technological improvements in the Company and its subsidiaries.

On March 31, 2008, working capital totaled R$ 1.2 billion, 7% down on the end-of-2007 figure. The reduction was essentially due to reduced assets, particularly the R$ 247 million decline in “Inventories” and the R$ 128 million slide in Advances to Suppliers. However, this impact was partially offset by the R$ 336 million reduction in liabilities, especially “Suppliers” and “Taxes Payable”, the latter being impacted by the booking of additional provisions for IPI premium credits in the 4Q07.

The average 1Q08 supplier payment period fell from 73 days, in the 4Q07, to 54 days, while the average client payment period dropped from 19 to 17 days. The average inventory turnover fell by 22 days, from 131 to 108.

Share Performance

Despite the 5% decline in the IBOVESPA and the 8% slide in the Dow Jones in the 1Q08, CSN’s shares recorded a positive performance on both the BOVESPA and the NYSE, appreciating by 19% and 21% respectively.

Average daily traded volume also moved up in both markets. Growth on the Brazilian exchange came to 16%, from close to R$ 132 million in the end of 2007 to R$ 154 million in the 1Q08. In New York, volume climbed by an even more impressive 62%, from US$ 90 million to US$ 146 million.

Stock Split and Shareholder Payout

The EGM of January 22, 2008 approved a 3:1 stock split, i.e. each share was represented by three shares. Consequently, as of that date, the Company’s capital has totaled R$1,680,947,363.71, divided into 804,203,838 common shares. The ratio of one CSN share for one ADR (American Depositary Receipt) was maintained.

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The AGM of April 18, 2008 approved the payment of R$ 2,115 million to shareholders as dividends and interest on equity. Of this total, R$ 800 million was paid as an advance on January 8, 2008 (R$ 665 million in dividends and R$ 135 million in interest on equity) and the remaining R$ 1,315 million (R$ 1,244 million in dividends and R$ 71 million in interest on equity was paid on May 5, 2008.

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Company Performance

In 2008 until one day before Standard & Poor's raised Brazil’s risk rating to investment grade, which triggered a huge stock-market surge, CSN’s shares had appreciated by 36%, one of the highest levels among those stocks making up the IBOVESPA index. As a result, the Company’s market capitalization reached US$ 35 billion on May 6, 2008 the 5th highest of all the world’s steelmakers.

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CSN is pleased to invite you to participate in its 1Q08 Results Webcast, with simultaneous translation into English, as follows:

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This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates of future economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.