Metalurgica Gerdau (GOAU4) Q1 2025 earnings summary

Executive summary

• Net sales reached R$17.4 billion in Q1 2025, up 3.3% from Q4 2024 and 7.2% year-over-year, driven by higher North American shipments and favorable exchange rates.

• Adjusted EBITDA was R$2.4 billion, stable sequentially but down 14.7% year-over-year, reflecting resilient North American performance offsetting weaker Brazil and South America results.

• Adjusted net income rose 13.4% sequentially to R$756 million, but fell 39.4% year-over-year; EPS was R$0.26, up R$0.15 from Q4 2024.

• Free cash flow was negative R$1.3 billion, mainly due to high CAPEX and working capital consumption from shipment growth.

• Dividend of R$0.08 per share (R$79.1 million) approved, with 100% of the 2025 share buyback program completed.

Financial highlights

• Steel shipments totaled 2.9 million tonnes, up 5.1% from Q4 2024 and 4.9% year-over-year, led by North America.

• Gross profit was R$1.95 billion, down 3.6% sequentially and 19.6% year-over-year; gross margin fell to 11.2%.

• Net debt/Adjusted EBITDA increased to 0.69x from 0.47x in Q4 2024, reflecting higher net debt and stable EBITDA.

• CAPEX reached R$1.4 billion in Q1, with a full-year plan of R$6.0 billion.

Outlook and guidance

• Full-year 2025 CAPEX guidance maintained at R$6.0 billion, with major projects including the Ouro Branco hot-rolled coil mill expansion and the Itabiritos iron ore project.

• Management expects incremental annual EBITDA of nearly R$400 million from the Ouro Branco expansion once fully ramped.

• Geographical diversification and strong order backlog in North America expected to support resilience amid market volatility.