Metalurgica Gerdau (GOAU4) Q3 2025 earnings summary

Executive summary

• Achieved solid Q3 2025 results, with consolidated steel sales reaching 3.1 million tons, up 9% from 2Q25, and North America driving growth amid resilient demand and reduced imports, while Brazil faced challenges from high steel imports impacting domestic sales.

• North America contributed 65% of consolidated EBITDA, reflecting strategic geographic diversification and achieving its highest quarterly EBITDA in two years.

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

• Net income per share was R$0.54, R$0.11 above 2Q25, and free cash flow was R$1.0 billion, supported by a R$300 million release in working capital.

• Dividend distribution of R$555.2 million (R$0.28/share) approved, and 56.8 million shares repurchased, representing 88% of the 2025 buyback program.

Financial highlights

• Q3 2025 EBITDA reached BRL 2.7 billion, up 7% quarter-on-quarter, with North America and South America segments offsetting Brazil's decline.

• Net revenue reached R$18.0 billion, up 2.6% from 2Q25 and 3.5% year-over-year.

• Free cash flow was BRL 1 billion, with 37% EBITDA-to-cash conversion and a working capital release of BRL 300 million, reducing the cash conversion cycle to 78 days.

• Net debt/EBITDA improved to 0.81x, aided by strong cash generation and a make-whole call on a $480 million 2030 bond.

• CapEx for Q3 totaled BRL 1.7 billion, with 60% allocated to competitiveness projects, notably mining, and 77% invested in Brazil.

• Dividends of BRL 0.28/share (Gerdau S.A.) and BRL 0.19/share (Metalurgica Gerdau) approved.

• Q3 payout to shareholders (dividends + buybacks) reached 75% of net income.

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 BRL 4.7 billion, a 22% reduction from 2025.

• Focus remains on maintaining financial strength and flexibility to navigate challenging scenarios.