Gerdau sales grow 35% and reach R$ 22.3 billion

Shipments grow 25.5% to 10.4 million metric tons. EBITDA reaches R$ 4.7 billion in the first six months - a growth of 51.7%

The continued growth in demand for steel in the world and the consolidation of new companies, especially in the United States ensured Gerdau's good performance in the first six months of 2008. Gross sales grew 35.2% in comparison with the period from January to June, 2007, reaching R$ 22.3 billion. This expansion was leveraged mostly by the increase of 25.5% in physical sales, which reached the milestone of 10.4 million metric tons of steel products. Steel production in this same period reached 10.8 million metric tons and represents an expansion of 25.6% over the six first six months of 2007. "We increased Gerdau's presence in important markets; we expanded the volumes sold, and were able to widen the margins in harmony with our commitment to growing with profitability despite the continual increases in raw material and utilities costs. Furthermore, the new operations recently acquired have already begun to give results and are contributing positively to the good performance in the period. We are going to continue investing, especially in Brazil, in order to meet the growing internal demand," affirms Gerdau's CEO, André Gerdau Johannpeter. In the first six months the EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), also known as cash from operations, presented a growth of 51.7%, reaching R$ 4.7 billion, and the consolidated net income was R$ 3.2 billion, 38.3% higher in relation to the same period the previous year. In the first six months of 2008, operations in Brazil (excluding Aços Especiais Piratini and Aços Villares) accounted for 35.9% of gross sales, the units in Canada and the United States (excluding Macsteel) for 34.7%, the mills in the other countries in Latin America for 10%, and the Business Operations Aços Especiais Piratini, Aços Villares, Sidenor, and Macsteel) for 19.4%. In Brazil (excluding Aços Especiais Piratini and Villares), the strong demand in all of the markets, especially in civil construction, resulted in a growth of 34.5% in physical sales, which reached the level of 2.5 million metric tons. Because of this expansion in internal demand, part of exports was directed to meet the needs of domestic customers, which resulted in a reduction of 26% in the long-steel exports. Exports at Gerdau Açominas, however, with an emphasis on slabs, blooms, and billets, rose 13% due to the production of its new blast furnace. Consequently the volume of shipments from Brazil totaled 1.4 million metric tons, including sales to associated companies, which generated US$ 994.5 million of earnings from exports. Steel production from units in the country grew 16.7% to 3.9 million metric tons mostly with the entrance of the new installed capacity of Gerdau Açominas, which currently has an output of 4.5 million metric tons a year. Physical sales in Canada and the United States (excluding Macsteel) reached 4.4 million metric tons in the first six months (+ 33%) due to the consolidation of Chaparral Steel, whose acquisition was finished in September, 2007. Steel production in the same period was 4.5 million metric tons, which represents a growth of 39.8% over the first six months of 2007. Sales also presented an expressive growth of 21.9% in Latin America (excluding Brazil), reaching 1.2 million metric tons, especially due to the good moment in the economies of this region and for the investments in infrastructure that is being built. Production of steel in Latin America (excluding Brazil) in the first six months of this year reached 970,000 metric tons and had a positive variation of 12.1% over the same period of the previous year. In the specialty steels segment (companies in Brazil, United States, and Spain) focused mainly on the automotive industry, 1.3 million metric tons of steel were sold, which is 26.4% more in comparison to the same period in 2007. This increase is due mainly to the consolidation of Macsteel, a company that produces specialty steels in the United States, which took place at the end of April this year, and the diversification of the markets covered in North America with a special highlight to the sectors of energy, farm machinery, and distributors. Production of specialty steels in the first six months reached 1.4 million metric tons, representing a volume 22.4% greater in comparison to the period from January to June, 2007.
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