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Gerdau's net revenue reaches R$ 9 billion because of greater global demand for steel
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- Consolidated sales increased 10% in the third quarter over the same period last year, reaching 4.8 million metric tons.
- Consolidated steel production reached 5 million metric tons, an increase of 14% over the third quarter of 2010.
The 10% increase in Gerdau's sales during the third quarter this year, reflecting a higher global demand for steel, resulted in the expansion of its consolidated net revenue to R$ 9 billion, an increase of 9% against the same period last year. The consolidated steel production reached 5 million metric tons, an increase of 14% over the third quarter of 2010.
Despite the increase in net revenue, the consolidated operating cash flow (EBITDA) declined by 4% over the same period last year, reaching R$ 1.2 billion, due to rising raw material costs. Net profit, in turn, grew 17%, reaching R$ 713 million, due to lower financial expenses, foreign exchange effects, and tax benefits resulting from the payment of interest on capital defined in the third quarter of 2011.
"Even against the high volatility of financial markets, Gerdau performed well in the third quarter, reflecting the growing demand for steel in the countries where we operate and the good management of our teams, which allowed cash growth and reduction of net debt and general, administrative, and financial expenses. The outlook for the global steel market shows growth in demand, but we remain cautious about the uncertainties of the global economic scenario. In this sense, we will seek the continuous improvement of our operations, mainly focusing efforts to reduce the impact of raw material costs on our business," says chief executive officer (CEO) of Gerdau, André B. Gerdau Johannpeter.
In the year-to-date (from January to September), the consolidated net revenue totaled R$ 26.3 billion, an increase of 12% over the first nine months of 2010. The consolidated sales reached 14.5 million metric tons, also showing an increase of 12%. In the same period, the consolidated steel production was 11% higher, reaching 14.9 million metric tons. The EBITDA, in turn, was R$ 3.6 billion and the net profit reached R$ 1.6 billion.
During the quarter, all Gerdau's operations reported increase in sales. In Brazil (except the special steel mills), 1.8 million metric tons of steel were sold, a volume 9% higher over the same period of 2010 due to increased domestic demand. Of this total, 1.4 million metric tons of Gerdau steel were marketed in Brazil, an increase of 13% against the same period last year. Conversely, the exports from the country reached 417 thousand metric tons, a reduction of 2%.
The other Latin American countries (except Brazil) totaled 711 thousand metric tons of steel sold, 26% more compared to the same period last year, with outstanding performance of Colombia, Mexico, and Argentina. In the plants located in Canada and the United States (excluding special steel mills), there was an 8% increase in sales due to increased demand from the industrial and energy sectors, reaching 1.6 million metric tons.
The sales of the Special Steel Business Division (including mills in Brazil, the United States, and Spain) showed a 2% increase, totaling 725 thousand metric tons, due to the stability of the automotive sector in the United States and Brazil, the high volume of sales and the recovery of this segment in the markets served by Gerdau in Spain, mainly Germany and France.
Gerdau invests R$ 616 million in the third quarter
In the third quarter, investments in fixed assets (CAPEX) totaled R$ 616 million, according to the planned schedule of disbursements. Of this total, 79% were allocated to plants located in Brazil and 21% to operations in other countries.
Regarding the investments in Brazil, it is important to highlight the projects for the installation of flat steel rolling mills and expansion of iron ore production, both at Gerdau Açominas (MG), and to increase the production capacity of rolled steel at the long steel mill Cosigua (RJ) and the special steel mill Pindamonhangaba (SP). During the first nine months of the year, considering the countries where it operates, Gerdau invested R$ 1.3 billion in fixed assets.
In relation to the monetization of part of its mineral resources located in Minas Gerais, Gerdau informs that the studies are still being conducted, as previously announced.
Dividends will be paid on November 30
On November 30, the publicly listed companies Gerdau S.A. and Metalúrgica Gerdau S.A. will pay dividends related to the results of the third quarter. The shareholders of Gerdau S.A. will receive R$ 204.6 million (R$ 0.12 per share) and the shareholders of Metalúrgica Gerdau S.A. will receive R$ 77.2 million (R$ 0.19 per share).
Gerdau is a leader in the long steel sector in the Americas and a leading supplier of special long steel in the world. The company has 45,000 employees and industrial plants in 14 countries – in the Americas, Europe, and Asia – which have a total installed capacity exceeding 25 million metric tons per year. Gerdau is the largest recycler in Latin America and turns millions of metric tons of scrap into steel every year around the world. With about 140,000 shareholders, the Company is listed on the stock exchanges of São Paulo, New York, and Madrid.
Porto Alegre, November 10, 2011.
Press Office – 51 3323-2170
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