GERDAU S.A. EARNINGS
RELEASE
2nd quarter | 2023
Miguel Burnier Mine
Dry stacking of iron ore tailings
- GLOBAL ENVIRONMENT: restrictive monetary policy in most economies begins to show an effect, leading to a reduction in inflation and economic activity
- BRAZIL: high interest rates (current SELIC 13.25%) and the elevated level of household debt remain factors of concern. Expectation of interest rate cuts, the progress of tax reforms and new stimulus programs for the economy should have a positive impact for the coming months
MACRO SCENARIO
LOWER-THAN-EXPECTED GLOBAL GROWTH TRIGGERS
DROP IN COMMODITY PRICES
- UNITED STATES: good levels of economic activity since the beginning of the year have postponed the expectation of a short-term recession (decrease in inflation, unemployment, GDP 2023E of 1.6% per year)
- CHINA: despite the slow recovery of domestic demand for steel, the continuous decline in inventories combined with new government stimuli for the economy could lead to a recovery in consumption in the sector
- SOUTH AMERICAN COUNTRIES: decline in commodity prices, currency appreciation against the dollar and high interest rates create a challenging economic growth scenario for the region
USD/m t
TURKISH REBAR & HRC | COAL & IRON ORE | |||||||||||||||||||||||
End of 2Q22 | End of 3Q22 | End of 1Q23 | End of 2Q22 | End of 1Q23 | ||||||||||||||||||||
End of 4Q22 | End of 2Q23 | End of 3Q22 | End of 4Q22 | |||||||||||||||||||||
320 | ||||||||||||||||||||||||
710 | t | 310 | ||||||||||||||||||||||
672 | 685 | |||||||||||||||||||||||
670 | USD/m | |||||||||||||||||||||||
268 | 295 | |||||||||||||||||||||||
640 | 665 | |||||||||||||||||||||||
590 | 610 | |||||||||||||||||||||||
565 | 545 | 125 | 118 | 125 | ||||||||||||||||||||
96 | ||||||||||||||||||||||||
Jun-22 | Jul-22 | Aug-22 | Sep-22 | Oct-22 | Nov-22 | Dec-22 | Jan-23 | Feb-23 | Mar-23 | Apr-23 | May-23 | Jun-23 | Jun-22 | Jul-22 | Aug-22 | Sep-22 | Oct-22 | Nov-22 | Dec-22 | Jan-23 | Feb-23 | Mar-23 | Apr-23 | May-23 |
HRC FOB China | Spot HCC Peak Downs FOB Australia | |||||||||||||||||||||||
Rebar FOB Turkey | IODEX 62% CFR China | |||||||||||||||||||||||
Source: S&P Global Commodity Insights |
SCRAP & PIG IRON | |||||||||||||
End of 2Q22 | End of 3Q22 | ||||||||||||
End of 1Q23 | |||||||||||||
End of 2Q23 | t | End of 4Q22 | End of 2Q23 | ||||||||||
640 | |||||||||||||
USD/m | |||||||||||||
233 | 535 | ||||||||||||
455 | 455 | 440 | 425 | ||||||||||
111 | 385 | 395 | 400 | 430 | 400 | ||||||||
342 | 368 | 380 | 380 | ||||||||||
Jun-23 | Jun-22 | Jul-22 | Aug-22 | Sep-22 | Oct-22 | Nov-22 | Dec-22 | Jan-23 | Feb-23 | Mar-23 | Apr-23 | May-23 | Jun-23 |
Scrap Turkey CFR | |||||||||||||
Scrap East Asia import CFR | |||||||||||||
Pig Iron FOB Brazil Southeastern |
This content is Public. | 2 |
OCCUPATIONAL HEALTH AND SAFETY MANAGEMENT
SAFETY IS A NON-NEGOTIABLEVALUE FOR GERDAU
AND PLAYS A MAJOR ROLE IN THE COMPANY'S
ORGANIZATIONAL CULTURE
1.28 | ||
1.16 | ||
1.10 | 1.10 | 1.08 |
0.99 |
0.87 0.83
0.76
0.66
2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 6M23 |
Gerdau Frequency Rate
This content is Public.
MANOEL BENEDITO DA SILVA SANTOS - Araçariguama Plant VALDIELLEN BANDEIRA - Cearense Plant
HIGHLIGHTS IN THE PERIOD
CONSISTENT RESULTS DRIVEN BY GEOGRAPHIC DIVERSIFICATION OF ASSETS IN THE AMERICAS AND FLEXIBLE PRODUCTION ROUTES EVEN
AMID A CHALLENGING MACROECONOMIC ENVIRONMENT
Shipments (1,000 tonnes)
-9.6%
3,245
2,979 2,933
2Q22 1Q23 2Q23
-1.5%
Net Sales¹ (R$ million)
-20.5%
22,968
18,872 18,265
2Q22 1Q23 2Q23
-3.2%
Adjusted EBITDA and Adjusted EBITDA Margin² (R$ million)
-43.2%
6,680
4,322
Adjusted Net Income and Adjusted Net Margin² (R$ million)
-50.1% |
4,298 |
29,1%
3,792 -12.3%
18,7% | 2,388 | -10.3% |
2,143 | ||
22,9% 20,8%
12,7% | 11,7% |
2Q22 | 1Q23 | 2Q23 | 2Q22 | 1Q23 | 2Q23 | ||
¹ Includes iron ore sales. | 4 | ||||||
² Non-accounting measure calculated by the Company. The Company presents Adjusted EBITDA to provide additional information on cash generation in the period. |
HIGHLIGHTS IN THE PERIOD
Shipments of 2.9 MILLION TONNES OF STEEL in 2Q23, in line with 1Q23
ADJUSTED EBITDA OF R$3.8 BILLION, one
of our highest-ever levels for a second quarter
GROSS DEBT OF R$10.7 BILLION AND NET DEBT/EBITDA OF 0.37X, in line with the Company's policy
SPECIAL STEEL BD: EBITDA of R$603 million, up 21.3% from 1Q23, and the second-best result for the period
CAPEX was R$1.2 billion in 2Q23
2Q23 SHAREHOLDER REMUNERATION: Gerdau allocated R$752.1 million (R$0.43 per share) and Metalúrgica Gerdau allocated R$268.5 million (R$0.26 per share) for distribution as dividends,
to be paid on August 29 and 30, respectively
MINING: R$3.2 billion to be invested in a sustainable mining platform in Minas Gerais, which will enable us to increase competitiveness and will use the dry-stackingmethod to dispose of 100% of mining tailings
WHITBY: conclusion of investment in the plant in Whitby (Canada), increasing steel production capacity by 200 kt per year
SOLAR POWER PLANT: In June, the solar power plant in Midlothian, Texas (United States), started generating renewable energy
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Gerdau SA published this content on 09 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 August 2023 00:45:04 UTC.
