Gerdau (GGBR4) Q2 2025 earnings summary

Executive summary

• Achieved record-low GHG emissions of 0.85 tCO2e/ton steel, highlighting sustainability focus and record safety performance.

• North America contributed 61% of consolidated EBITDA, offsetting weaker results in Brazil and South America amid high steel imports in Brazil.

• Steel shipments totaled 2.8 million tonnes, with net sales rising to R$17.5 billion, driven by North American performance.

• Adjusted EBITDA reached R$2.6 billion, up 6.6% year-over-year, and net income was R$864 million (R$0.43/share), a 14% increase.

• CAPEX investments totaled R$1.6 billion, with major allocation to strategic projects in Brazil and North America.

Financial highlights

• Net sales: R$17.5 billion, up 0.9%–5.5% year-over-year; Adjusted EBITDA: R$2.6 billion, up 6.6%; Net income: R$864 million; EPS: R$0.43.

• Gross profit: R$2.03 billion, gross margin at 11.6%; adjusted EBITDA margin at 14.6%.

• Dividend distribution of R$0.12/share (R$239.5 million) approved, with 68% of the share buyback program completed.

• Free cash flow was negative R$773 million, mainly due to high CAPEX and JV disbursements.

• Net debt/EBITDA at 0.85x, with liquidity position strong at R$9.0 billion in cash.

Outlook and guidance

• North American steel demand remains robust, with margin expansion expected and high order backlogs in non-residential construction.

• Brazilian market outlook remains cautious due to high import penetration and lack of effective trade defense; margin upturn anticipated but risks persist.

• CapEx disbursement to be reduced from 2026 onward, with focus shifting away from Brazil and maintaining investments in North America.

• Expectation of improved free cash flow and EBITDA in 2026–2027 as major projects ramp up.

• Continued discipline in capital allocation, focusing on strategic CAPEX and share buybacks.