Gerdau (GGBR4) Q4 2025 earnings summary

Executive summary

• 2025 results demonstrated operational resilience amid a challenging global steel market, with North America delivering strong results and EBITDA up 18.5% year-over-year, driven by resilient demand in key sectors.

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

• Net revenue reached R$69.9 billion, adjusted EBITDA R$10.1 billion, and adjusted net income R$3.4 billion, down 21% year-over-year due to impairments and market pressures.

• Brazil faced record steel imports, pressuring domestic prices and margins, while strategic investments like the Miguel Burnier mining project (91% complete) continued.

• South America saw gradual sales recovery but persistent weak demand and price pressure, with Argentina's exports offsetting domestic weakness.

Financial highlights

• Consolidated net revenue grew 4.2% year-over-year to R$69.9 billion, 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.

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

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

• Dividends and share buybacks in 2025 amounted to R$2.4 billion, with a payout ratio of 182%.

Outlook and guidance

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

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

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

• The startup of the Miguel Burnier mining project and Midlothian expansion are expected to lower costs and enhance competitiveness.

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