Gerdau (GGBR4) Q2 2025 earnings summary

Executive summary

• Achieved record-low CO2 emissions of 0.85 tCO2/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 reached 2.8 million tonnes, with net sales up 0.9% year-over-year, driven by North American performance.

• Adjusted EBITDA rose to R$2.6 billion, up 6.6% year-over-year, and net income increased 14% to R$864 million (R$0.43/share).

• Strategic focus on international diversification, with reduced future investments in Brazil due to import challenges.

Financial highlights

• Adjusted EBITDA: R$2.6 billion, up 6.6% year-over-year; net income: R$864 million; EPS: R$0.43.

• Net sales: R$17.5 billion, up 0.9%; gross profit: R$2.0 billion, gross margin at 11.6%.

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

• Dividend distribution of R$239–240 million (R$0.12/share) and 68% completion of share buyback program.

• Issued US$650 million in bonds and R$1.4 billion in debentures, extending debt maturity and strengthening cash position.

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.

• 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.