Metalurgica Gerdau (GOAU4) Q4 2024 earnings summary

Executive summary

• Adjusted EBITDA rose 17.3% year-over-year in 4Q24, driven by improved performance in Brazil, but full-year adjusted EBITDA was R$10.8 billion, down from 2023, reflecting adaptability and cost reduction amid global steel overcapacity and import pressures.

• Net sales reached R$16.8 billion in 4Q24, up 14.3% year-over-year, while full-year net revenue was R$67.0 billion, down 2.7% year-over-year.

• Free cash flow was R$435 million in 4Q24 and R$2.9 billion for the year, 39.2% lower than 2023.

• Dividend payout totaled R$460.6 million in 2024, with a 52.1% payout ratio, and a share buyback program completed for 33 million shares.

• Strategic investments in CAPEX, energy, and sustainability continued, with R$6.2 billion invested in 2024 and a R$6.0 billion plan for 2025 focused on modernization and environmental practices.

Financial highlights

• Adjusted EBITDA: R$2.4 billion in 4Q24, down 20.7% sequentially, up 17.3% year-over-year; full-year adjusted EBITDA R$10.8 billion, margin 16.2%.

• Net income: R$4.6 billion in 2024, down 39.2% year-over-year; adjusted net income R$667 million (R$0.11/share) in 4Q24.

• Gross profit: R$2.0 billion in 4Q24, 21.6% lower sequentially, 23.7% higher year-over-year; gross margin at 12.0% in 4Q24 and 13.7% for 2024.

• Net debt/EBITDA: 0.47x at year-end, up from 0.30x in 3Q24, indicating strong leverage position.

• Free cash flow: R$435 million in 4Q24, R$2.9 billion in 2024.

Outlook and guidance

• 2025 CAPEX plan set at R$6.0 billion, focused on modernization, environmental improvements, and expansion in the Americas.

• Mining project in Brazil to add 5.5 million tonnes/year iron ore capacity by late 2025/2H26.

• Execution of CAPEX plan contingent on market and economic conditions in operating countries.

• Continued focus on cost efficiency, sustainability, and competitive positioning amid challenging market conditions.