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Gerdau's net revenue reaches R$ 9.2 billion in the 1st quarter of 2013
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- Consolidated net revenue reached R $ 9.2 billion in the first quarter in line with the same period in 2012.
- Consolidated shipments reached 4.6 million tons in the first three months of the year and steel production reached 4.4 million tons.
- The main emphasis in the first quarter was the Brazilian long steel domestic market, with shipments up 12% compared to the same period last year and net income up 14%.
Gerdau closed the first quarter with consolidated net revenues of R$ 9.2 billion in line with the same period last year, mainly due to growth in sales of long steel in the domestic market. However, the Company's performance was impacted by a lower demand in Europe and North America, as well as by increasing steel imports into Latin America and the United States. Added to this context were specific situations in different regions, notably the start-up of the operation in India and the deployment of management software in North America. Gerdau’s consolidated shipments worldwide totaled 4.6 million tons, a 4% decrease compared to the first three months of 2012, while consolidated steel production was 4.4 million tons, a volume 11% lower.
The consolidated operating cash flow (EBITDA) reached R$ 805 million, a decrease of 20% compared to the first quarter of 2012, mainly due to lower sales volume in the period. Net income, however, reached R$ 160 million.
Compared with the fourth quarter of 2012, Gerdau's performance demonstrates a trend of recovery. Consolidated physical sales, for example, grew 6% and net revenue growth was 2%, while net income increased 12%.
"Despite the excess of installed capacity of steel in the world, markets began to show a gradual improvement in demand levels, which added to our management efforts, and should reflect positively on our performance over the coming quarters. Our main challenge is to improve the company's margins and to do so, we will continue working hard to increase the operational efficiency of our business, optimize the working capital compared to the levels of demand, and, considering the volatility of the markets, be cautious when managing the disbursement schedule of investments (CAPEX). Furthermore, we are making strategic investments that should also be reflected in increased margins, notably the expansion of our own production of iron ore with new shipments scheduled for 2013, the production of flat steel in Brazil, and the startup of activities in India," says Gerdau's chief executive officer (CEO), André B. Gerdau Johannpeter.
During the first quarter, the markets supplied by Gerdau performed differently. In Brazil, sales to the domestic market grew 12%, adding 1.4 million tons, while exports from the country decreased 22% to 391,000 tons. In Canada and the United States (not including special steel mills), 1.5 million tons were sold, which represents a 13% decrease compared to the same period last year.
The units located in other countries of Latin America (excluding Brazil), in turn, amounted to 646,000 tons of steel sold, which is 4% less compared to the first quarter of 2012. The sales closed by the Special Steel Business Operation (includes production plants in Brazil, United States, Spain, and India) were 667,000 tons, a decrease of 4% compared with the same period last year.
Gerdau's investments reach R$ 571 million in first quarter
In the first quarter, investments in fixed assets (CAPEX) amounted to R$ 571 million due to investments already announced, mainly increasing the production capacity of iron ore and the installation of the hot rolled coil mill at the Ouro Branco (MG) plant.
As previously announced, for the period 2013-2017, R$ 8.5 billion are scheduled in investments in the Company's industrial units, considering both the steel and mining activities.
Gerdau closes an international financial funding at the lowest cost in its history
In April, Gerdau issued a 10-year bond worth US$ 750 million in order to lengthen the average maturity of its debt. With an interest of 4.75% per annum, the funding had the lowest cost in the Company's history in international funding, which is a recognition of Gerdau's management by the financial market. The geographical distribution of the offer was 49% for the United States, 35% for Europe, 15% for Latin America, and 1% for Asia.
Dividends to be paid on May 29
The publicly listed companies Metalúrgica Gerdau S.A. and Gerdau S.A. shall pay dividends on May 29 based on the results obtained in the first quarter. R$ 8 million will be paid to the shareholders of Metalúrgica Gerdau S.A. (R$ 0.02 per share) and R$ 34 million to the holders of Gerdau S.A. shares (R$ 0.02 per share).
Gerdau is the leader in the segment of long steel in the Americas and one of the main suppliers of special long steel in the world. With over 45,000 employees, it has industrial operations in 14 countries—in the Americas, Europe, and Asia—which together represent an installed capacity of over 25 million metric tons of steel per year. It is the largest recycler in Latin America and in the world, and transforms each year millions of tons of scrap steel, reinforcing its commitment to sustainable development in the regions where it operates. Gerdau is listed on the stock exchanges of São Paulo, New York, and Madrid and has over 130,000 shareholders.
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