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, despite a 20.7% sequential decline due to lower prices in North America and seasonal volume drops.

• Net sales reached R$16.8 billion in 4Q24, up 14.3% year-over-year but down 3.2% from 3Q24, with steel shipments at 2.7 million tonnes, a 2.4% increase year-over-year.

• Free cash flow was R$435 million in 4Q24, with R$888 million in working capital released; full-year free cash flow totaled R$2.86 billion.

• Dividend distribution of R$50 million (R$0.05/share) approved, with a 2024 payout of 52.1% including buybacks.

• Share buyback program completed for 2024 (33 million shares), with a new program for up to 6 million shares approved.

Financial highlights

• Adjusted EBITDA: R$2.4 billion in 4Q24, down 20.7% sequentially, up 17.3% year-over-year; margin at 14.2%.

• Adjusted net income: R$667 million (R$0.11/share), down 53.6% from 3Q24 and 10.8% from 4Q23.

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

• Net debt/Adjusted EBITDA: 0.47x at year-end, up from 0.30x in 3Q24, reflecting higher net debt and lower EBITDA.

• CAPEX: R$2.4 billion in 4Q24, R$6.2 billion in 2024, with 54% for competitiveness and 46% for maintenance.

Outlook and guidance

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

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