Metalurgica Gerdau (GOAU4) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 reached R$291.0 million, with EPS of R$0.28 per share, mainly from positive equity results from subsidiaries.

• Net sales reached R$16.6 billion in 2Q24, up 2.5% from 1Q24 but down 9.0% year-over-year, reflecting lower shipment volumes and prices.

• Adjusted EBITDA was R$2.6 billion, down 6.7% from 1Q24 and 30.3% from 2Q23, with a margin of 15.8%.

• The Board approved a dividend distribution of R$0.08 per share, totaling R$82.6 million, to be paid on August 21, 2024.

• Approval of share buyback programs for up to 33 million preferred shares, valid until August 2025.

Financial highlights

• Consolidated net revenue for H1 2024 was R$32.8 billion, down from R$37.1 billion in H1 2023.

• Consolidated net income for H1 2024 was R$2.93 billion, compared to R$5.37 billion in H1 2023.

• EBITDA for H1 2024 was R$6.1 billion, with a margin of 18.6%.

• Free cash flow was positive at R$87 million, a R$718 million improvement over 1Q24.

• Dividend payments in H1 2024 totaled R$196.2 million.

Outlook and guidance

• Management expects structural adjustments and cost optimization to support value creation in coming quarters.

• Initiatives to adjust production capacity, including plant hibernations, are expected to impact future results.

• Management continues to monitor the steel market for signs of deterioration, especially in automotive and construction sectors.

• No material impact identified from recent climate events in Rio Grande do Sul.

• The company is evaluating the impact of new IFRS and SEC climate disclosure rules effective from 2025.