Preview of New Report
Gerdau SA (GGB) reported 4Q EBITDA of R$1.025B, ahead of the Street’s R$1.013B and last year’s R$815m, but down 16% sequentially.
Shipments reached 4.7m tonnes in 4Q, compared with 4.5m tonnes in 4Q 2010, with the increase particularly owing to an increase in demand in Brazil and the US. Brazil saw growth in civil construction, while the North American market benefited from improved manufacturing and energy demand. Shipments in the quarter fell from 4.8m tonnes in 3Q; management said that the seasonal decrease in Brazil was offset by increased exports of semi-finished steel, and North American shipments exceeded expectations considering the affect of winter on construction.
Management expects global steel consumption to rise by 5.4% in 2012, with 70% of the consumption from developing economies where most of Gerdau’s operations are; GGB expects the US to see a gradual, consistent recovery.
The company also talked about plans to increase rebar capacity in the US as well as the potential for a spin-off of GGB’s iron ore assets.
Our full report is available to subscribers only and provides further thoughts on Gerdau’s 4Q earnings report and conference call as well as the implication for the stock and other equities.
For a free trial subscription, please contact us.
