Metalurgica Gerdau (GOAU4) Q3 2025 earnings summary

Executive summary

• North America achieved record performance in Q3 2025, contributing 65% of consolidated EBITDA, driven by resilient demand and favorable prices, while Brazil faced margin pressure from high steel imports and oversupply, impacting domestic sales.

• Consolidated steel shipments rose 9.3% year-over-year to 3.1 million tonnes, with Q3 net sales at R$18.0 billion (+2.6% YoY) and adjusted EBITDA at R$2.7 billion (+6.9% YoY).

• Net income attributable to shareholders for the nine months ended September 30, 2025, was R$939.6 million, with Q3 net income at R$382.3 million.

• Advanced the sustainable mining project in Miguel Burnier to 90% completion, with integrated operations set for early 2026.

• Dividends of R$188.8 million (R$0.19/share) were approved for payment in December 2025.

Financial highlights

• Q3 2025 EBITDA reached R$2.7 billion, up 7% quarter-on-quarter and 6.9% year-over-year, led by North America and South America segments offsetting Brazil's decline.

• Free cash flow was R$1.0 billion, with a 37% EBITDA-to-cash conversion and a working capital release of R$300 million, reducing the cash conversion cycle to 78 days.

• Net debt/EBITDA improved to 0.81x, with net debt at R$8.7 billion and gross debt at R$18.6 billion.

• Gross margin for Q3 2025 was 11.9%, down from 14.8% in Q3 2024, and adjusted EBITDA margin was 15.2%.

• CapEx for Q3 totaled R$1.7 billion, with 60% allocated to competitiveness projects and 77% to Brazil.

Outlook and guidance

• North America expected to maintain strong steel demand, supported by solar, data center, and infrastructure sectors, though Q4 may see seasonal shipment declines.

• Brazil faces continued import pressure and uncertain outlook for 2026, with optimism tied to potential trade defense measures.

• 2026 CapEx guidance set at R$4.7 billion, a 22% reduction from 2025, focusing on maintenance and competitiveness.

• Management is monitoring the impact of increased US tariffs on Brazilian steel exports and remains focused on cost competitiveness and disciplined capital allocation.

• Anticipates slight recovery in automotive and industrial sectors and stable civil construction in Brazil.