Gerdau (GGBR4) Q4 2025 earnings summary

Executive summary

• 2025 results demonstrated operational resilience amid contrasting market conditions, with North America delivering record shipments and robust EBITDA growth, while Brazil faced profitability challenges from record steel imports despite new trade defense measures.

• North America was the main contributor to consolidated EBITDA (up 18.5% year-over-year), benefiting from resilient demand in infrastructure, solar, and data centers.

• Steel shipments reached 11.6 Mt in 2025, a 5.9% increase, with positive performance across all regions.

• The Miguel Burnier mining project achieved 91% physical progress and is expected to reduce production costs and enhance competitiveness in Brazil.

• South America saw gradual sales recovery but persistent weak demand and price pressure, especially in Argentina.

Financial highlights

• Net revenue reached R$ 69.9 billion in 2025, up 4.2% year-over-year, driven by higher sales volumes and improved North American pricing.

• Adjusted EBITDA was R$ 10.1 billion, down 7.1% from 2024, with a margin of 14.4%.

• Adjusted net income was R$ 3.4 billion, 21% lower year-over-year, excluding R$ 2.0 billion in non-cash impairment losses in Brazil.

• CAPEX reached R$ 6.1 billion in 2025, with 2026 guidance at R$ 4.7 billion, reflecting a focus on free cash flow and competitiveness.

• Free cash flow for 2025 was R$ 394 million, with R$ 1.4 billion in Q4 2025.

• R$ 2.4 billion was returned to shareholders in 2025 through dividends and share buybacks.

Outlook and guidance

• 2026 CAPEX is projected at R$ 4.7 billion, prioritizing asset maintenance, competitiveness, and cost reduction.

• Moderate demand growth is expected in Brazil for 2026, with optimism around recent trade defense measures and infrastructure focus.

• North America is projected to maintain high steel consumption, with strong demand from infrastructure, solar, and data centers.

• Brazil's EBITDA margin could reach double digits in 2026 if market conditions stabilize and Miguel Burnier ramps up as planned.