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Gerdau Announces 2007 Consolidated Results
02/15/2008 - The Gerdau Group reports consolidated net income of R$ 4.3 billion on consolidated net sales of R$ 30.6 billion for 2007.
The Gerdau Group reported consolidated net income of R$ 4.3 billion on consolidated net sales of R$ 30.6 billion in 2007.
The R$ 30.6 billion of consolidated net sales represents a growth of 18.3% as compared to 2006. The company attributes the increase to the greater sales volume during the period, higher selling prices for steel products in foreign markets, and acquisitions made during the period.
Cash generation, represented by EBITDA (earnings before interest, taxes, depreciation and amortization) reached R$ 6.2 billion in 2007, which corresponds to an increase of 6.9% over last year. The margin reached
20.4%.
The R$ 4.3 billion consolidated net income represents a 1.1% over 2006 net income. Results for both periods included some non-recurrent items that affected net income and prevent a true comparison of results. In 2006, net income was influenced by non-recurrent revenues of R$ 263 million, while 2007 net income was affected by non-recurrent expenses of R$ 164 million. Excluding those effects, net income would have been R$ 4.5 billion in 2007, representing a growth of 11.9%.
In 2007, the production of crude steel (slabs, blooms and billets) totaled 17.9 million tonnes, an increase of 13.6% as compared to 2006. The Group attributed the volume increase in part to the improvement in operations for several regions in which Gerdau operates, as well as the consolidation of new companies that were acquired during 2007. Production of rolled products reached 15.2 million tonnes in 2007, an 18.4% increase compared to rolled products production in 2006.
Consolidated sales in 2007 totaled 17.2 million tonnes, an increase of 15.2% as compared to 2006. Of this total, 41.0% derived from operations in Brazil and the remaining 59.0% derived from companies abroad. Excluding the acquisitions carried out in the period in comparison, sales grew by 3.6%.
In accordance with its investment program for the 2007-2009 triennium, Gerdau invested US$ 1.5 billion in fixed assets in 2007. Concurrently, Gerdau also invested an additional US$ 4.8 billion in acquisitions both in countries where it already has operations, as well as in geographical expansion.
Gerdau’s net debt (loans and financing, plus debentures, less cash and cash equivalents and securities), as of December 31, 2007, amounted to R$ 10.8 billion. Debt raised for the payment of acquisitions carried out throughout the year—particularly the September acquisition of Chaparral—pushed this amount significantly higher than the amount as of December 31, 2006.
The gross debt (loans and financing, plus debentures) was 16.0% short term (R$ 2.5 billion) and 84.0% long term (R$ 13.4 billion). The average payment term of this debt is 6 years and 4 months.
At the end of the year, cash and cash equivalents, plus financial investments, totaled R$ 5.1 billion, of which R$ 3.1 billion (60.6%) was indexed to foreign currencies, mainly the U.S. dollar.
