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Gerdau Reports 3Q10 Results
11/08/2010 - Gerdau reported that shipments reached 4.4 million tonnes in the 2010 third quarter, 14% higher than in 3Q09, due to the positive performance of the Specialty Steel Business Operation and the improvement in domestic demand at the Brazil Business Operation.
Gerdau reported that shipments reached 4.4 million tonnes in the 2010 third quarter, 14% higher than in 3Q09. The company notes that this is mainly due to the positive performance of the Specialty Steel Business Operation and the improvement in domestic demand at the Brazil Business Operation, stimulated by automotive and construction industries, respectively.
Consolidated gross revenues reached R$9.3 billion—a 20% growth compared to the months from July to September in 2009. The consolidated production of crude steel has grown 9% in the third quarter versus the same period last year, also reaching 4.4 million tonnes.
Net sales reached R$8.2 billion in the 3Q10, 20% more than 3Q09, due to the higher shipments and, to a lesser extent, the higher net sales per ton sold. 3Q10 EBITDA reached R$1.3 billion, compared to R$1.4 billion in 3Q09. The EBITDA margin reached 15% in the 3Q10, compared to 20% in the 3Q09.
Net income was R$609 million in the 3Q10, compared to a net income of R$655 million in the 3Q09, impacted by the lower operational income in relation to the comparison periods.
Year to date, consolidated gross revenues reached R$26.9 billion, which is an increase of 18% over the first nine months of 2009. Consolidated physical sales from January to September rose 25% to 12.8 million tonnes, while consolidated production of crude steel rose 39% reaching 13.5 million tonnes. EBITDA reached R$4.4 billion against R$2.6 billion recorded in the first nine months of 2009. Net income reached R$2 billion.
There was growth in physical sales in all of Gerdau's operations in the third quarter. In Brazil (excluding specialty steel plants), the sales volume of 1.6 million tonnes exceeded by 12% the sales from the same period last year, and of this total the domestic market consumed 1.2 million tonnes. The performance of the domestic market represented an increase of 18% in sales over the third quarter of 2009, which was driven by higher demand from the industry and from civil construction. Exports from the country remained steady, reaching 424,000 tonnes.
In other countries of Latin America (except Brazil), 565,000 tonnes were sold, which is a 5% increase over the third quarter of 2009. In the United States and Canada (except specialty steel plants), there was a 7% growth in physical sales to 1.5 million tonnes due to the gradual recovery of the industry.
The Specialty Steel Business Operation (includes units in Brazil, Spain, and United States) totaled 709,000 tonnes sold, which is an increase of 49% compared with the third quarter of 2009, benefiting from the record levels in vehicle production in Brazil, the maintenance of good levels of demand in the automotive sector in the United States, and by signs of recovery of this same segment in Spain.
Year to date, consolidated gross revenues reached R$26.9 billion, which is an increase of 18% over the first nine months of 2009. Consolidated physical sales from January to September rose 25% to 12.8 million tonnes, while consolidated production of crude steel rose 39% reaching 13.5 million tonnes. EBITDA reached R$4.4 billion against R$2.6 billion recorded in the first nine months of 2009. Net income reached R$2 billion.
There was growth in physical sales in all of Gerdau's operations in the third quarter. In Brazil (excluding specialty steel plants), the sales volume of 1.6 million tonnes exceeded by 12% the sales from the same period last year, and of this total the domestic market consumed 1.2 million tonnes. The performance of the domestic market represented an increase of 18% in sales over the third quarter of 2009, which was driven by higher demand from the industry and from civil construction. Exports from the country remained steady, reaching 424,000 tonnes.
In other countries of Latin America (except Brazil), 565,000 tonnes were sold, which is a 5% increase over the third quarter of 2009. In the United States and Canada (except specialty steel plants), there was a 7% growth in physical sales to 1.5 million tonnes due to the gradual recovery of the industry.
The Specialty Steel Business Operation (includes units in Brazil, Spain, and United States) totaled 709,000 tonnes sold, which is an increase of 49% compared with the third quarter of 2009, benefiting from the record levels in vehicle production in Brazil, the maintenance of good levels of demand in the automotive sector in the United States, and by signs of recovery of this same segment in Spain.
Investments in fixed assets totaled R$298 million in the 3Q10. Gross debt was R$14.3 billion on September 30, 2010, representing 2.5 times of the last 12 months EBITDA.
The company approved the dividend payment of R$170 million (R$0.12/share) for Gerdau S.A. shareholders, and R$73 million (R$0.18/share) for Metalurgica Gerdau S.A. shareholders, based on the results of the 3Q10. The payment will be on November 26, 2010.
"The growth in sales and steel production is the result of a stronger demand in the different markets where we operate. The global economic scenario, however, still presents major challenges. The high cost of raw materials, the excess of installed capacity, and the intense competition in all markets where we operate are pressuring margins in the industry as well as impacting our results. In light of this context, Gerdau will continue adapting to market swings with the same agility of decision and flexibility of our operations that has always marked the company's management throughout its history," said Gerdau's CEO, André B. Gerdau Johannpeter.
Gerdau is the leading producer of long steel in the Americas and one of the largest suppliers of specialty long steel in the world. It has more than 40,000 employees and an industrial presence in 14 countries with operations in the Americas, Europe, and Asia, which together represent an installed capacity of more than 25 million tonnes of steel per year. It is the largest recycler in Latin America.
Gerdau is the leading producer of long steel in the Americas and one of the largest suppliers of specialty long steel in the world. It has more than 40,000 employees and an industrial presence in 14 countries with operations in the Americas, Europe, and Asia, which together represent an installed capacity of more than 25 million tonnes of steel per year. It is the largest recycler in Latin America.
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