Internationalization boosts Gerdau Group revenue

The consolidation of new steel companies and sales growth in the Brazilian market increased Gerdau Group revenue from R$ 19.6 billion (US$ 8.8 billion) to R$ 20.6 billion (US$ 9.5 billion), representing a growth of R$ 1 billion (US$ 0.7 billion) or 5.3% c

The consolidation of new steel companies in 2006, together with sales growth in the Brazilian market, increased Gerdau Group revenue by 5.3% compared to the first three quarters of 2005, from R$ 19.6 billion (US$ 8.8 billion) to R$ 20.6 billion (US$ 9.5 billion). This year, Siderperú (Peru) and the Sheffield Steel Corporation (United States) became part of the Gerdau Group. Gerdau also became a shareholder in Corporación Sidenor (Spain), with a 40% stake. At the end of 2005, it acquired Diaco (Colombia) and assumed control of Sipar Gerdau (Argentina), which also positively affected the performance for the period. Of the total revenue, 46.1% was generated in Brazil, 42.0% in the United States and Canada, 9.0% in other South American countries and 2.9% in Spain. From January to September, revenue in foreign currency originating from units outside Brazil and exports from the country represented 62.0%. Gerdau Group physical sales totaled 11.1 million metric tons, representing a 9.5% increase compared to the volume recorded during the first three quarters of 2005. The operations in Brazil sold 4.6 million metric tons, 3 million of which were sold in the domestic market, where the Group increased its sales by 12.8%. “The expansion of sales in Brazil reflects the growing demands from civil construction due to increased real estate financing, improved employment rates and reduced interest rates,” explained the Group’s senior vice president, Frederico Gerdau Johannpeter. The volume of exports from Brazil during the same period was 1.6 million metric tons. Consequently, steel production in Brazil – slabs, blooms and billets – increased 4.4%, totaling 5.4 million metric tons, while rolled product production grew 15.2%, and reached 3.4 million metric tons. In North America, physical sales increased 6.5%, from 4.9 million to 5.2 million metric tons. During the same period, steel production totaled 5.2 million metric tons and rolled product production totaled 5 million metric tons, representing a growth of 11.1% and 8.8%, respectively. The units in Argentina, Chile, Colombia, Peru and Uruguay together sold 1.1 million metric tons, representing a 137.6% growth. Steel production grew 154.2%, reaching a total of 863,000 metric tons. Rolled product production grew 170.5%, totaling 1 million metric tons. In Spain, the Group sold 203,000 metric tons and produced 226,000 metric tons, volumes that correspond to its stake in the unit. The EBITDA totaled R$ 4.1 billion (US$ 1.9 billion) during the first three quarters of the year, representing a 6.7% growth. The consolidated net profit totaled R$ 2.7 billion (US$ 1.2 billion), a value 7.0% higher than that recorded during the same period in 2005.
 
 
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