Gerdau (GGBR4) Q1 2025 earnings summary

Executive summary

• Accident frequency rate improved to 0.61, underscoring a strong safety commitment.

• Achieved IRMA certification for responsible mining at Miguel Burnier, joining a select global group.

• Inaugurated expanded hot-rolled coil capacity in Ouro Branco, increasing flat steel share in Brazil.

• Net income reached R$758 million, up 14% sequentially, with EPS at R$0.37.

• North American operations saw higher shipments and robust order backlog, offsetting Brazil's import-driven challenges.

Financial highlights

• Adjusted EBITDA for the quarter was R$2.4 billion, stable sequentially but down year-over-year.

• Net sales reached R$17.4 billion, up 3.3% from Q4 2024 and 7.2% year-over-year.

• CAPEX for the quarter was R$1.4 billion, with 70% allocated to Brazil.

• Dividends declared: R$243.5 million (R$0.12/share); share buybacks of R$444 million, 44% of the 2025 program.

• Free cash flow for the quarter was R$1,252 million, with a closing cash position of R$6,870 million.

Outlook and guidance

• 2025 CAPEX plan set at R$6.0 billion, focusing on competitiveness and maintenance.

• North America: Margins expected to improve in 2025, with resilient volumes and higher spreads.

• Brazil: Margins expected to remain stable, but outlook cautious due to high imports and interest rates.

• Ongoing review of capital allocation, with potential for increased share buybacks.

• Full-year dividend payout policy and share buyback program to continue.