Gerdau (GGBR4) Q1 2026 earnings summary

Executive summary

• Achieved consolidated net income of R$1.01 billion in Q1 2026, up 33.8% year-over-year, with North America contributing 75% of consolidated EBITDA and driving resilience amid weaker results in Brazil and mixed trends in South America.

• Adjusted EBITDA reached R$3.0 billion, up 25% quarter-over-quarter and 23% year-over-year, with margin improvement to 17.7%.

• Launched Gerdau NewEco, a low-carbon steel solution, and inaugurated the Barro Alto Solar Complex, supplying 13% of electricity consumption in Brazil and enabling 42% self-generation.

• Dividend distribution of R$354 million (R$0.18/share) and share buybacks totaling R$211 million were approved, reflecting a payout of 58.8%.

• Continued focus on workplace safety, with accident frequency rate at 0.84 in Q1 2026.

Financial highlights

• Net sales were R$16.7 billion, down 3.8% year-over-year, with gross profit rising to R$2.29 billion and operating income before financial results and taxes at R$1.83 billion.

• Adjusted EBITDA margin improved to 17.7%, up 3.7 p.p. quarter-over-quarter and 3.9 p.p. year-over-year.

• Free cash flow was R$16 million, positive despite higher working capital consumption.

• Net debt/EBITDA stood at 0.74x, reflecting a strong balance sheet and solid capital structure.

• Basic and diluted EPS were R$0.51 (ON) and R$0.37 (PN), both up from Q1 2025.

Outlook and guidance

• Expect gradual recovery in Brazilian domestic demand, especially in construction and infrastructure, despite ongoing import pressures.

• North American steel consumption remains stable at high levels, with order backlog above historical averages and margin growth anticipated.

• Monitoring trade defense measures, tariff renewals, and regulatory changes in both regions, including U.S. Section 232 and Brazilian anti-dumping investigations.

• CAPEX guidance for 2026 remains at R$4.7 billion, with R$1.1 billion invested in Q1, focused on maintenance and competitiveness.

• Start-up of Miguel Burnier Mining Project and Phase 1 of Midlothian expansion expected in the second half of 2026.