EX-1 3 e866906.txt RELEVANT INFORMATION Exhibit 1 RELEVANT INFORMATION - 4TH QUARTER 2002 Dear Shareholders o On October 22nd, 2002, Gerdau concluded the process of merging its assets in North America (Courtice Steel, MRM and AmeriSteel) with those of Co-Steel Inc., Canada. With the conclusion of this operation, the results of the period will include the performance of Co-Steel from October through December of last year. Other contributions to this result were the full consolidation of Acominas and of the Cartersville unit in Georgia (USA), acquired at the end of 2001. o Consolidated Net Income at Metalurgica Gerdau S.A. in the fiscal year of 2002 reached R$ 821.0 million, presenting an increase of 49.0% over the R$ 550.9 million of 2001. In the fourth quarter, net income reached R$ 195.5 million, 11.8% greater than that of the fourth quarter of 2001. o In 2002, gross revenues totaled R$ 11.1 billion, that is, 57.3% more than in the previous period. From October through December, gross revenues reached the mark of R$ 3.1 billion, presenting an increase of 95.4% when compared to the last quarter of 2001. The increases presented both in the year-end and quarterly results are explained essentially by the factors mentioned in the first paragraph. o EBITDA was R$ 587.0 million in the last three months of 2002, an increase of 103.7% in comparison with the same quarter in 2001. The full year EBITDA reached R$ 2.1 billion, 64.0% greater than the R$ 1.3 billion reached in 2001. -------------------------------------------------------------------------------- CRUDE STEEL OUTPUT INCREASED 30.2% IN THE YEAR AND REACHED 9.4 MILLION TONS IN 2002. IN ROLLED PRODUCTS, OUTPUT REACHED 7.0 MILLION TONS, 16.5% GREATER THAN THAT OF 2001. --------------------------------------------------------------------------------
1,000 tonnes 4Q02 3Q02 4Q01 2002 2001 ------------------------------------------------------------------------------------------------------------ CRUDE STEEL Brazil 1,691.0 1,613.6 1,430.2 5,998.9 4,670.8 North America 1,134.3 646.0 542.2 3,130.2 2,294.5 South America 96.9 74.1 76.6 312.0 285.5 TOTAL 2,922.2 2,333.7 2,049.0 9,441.1 7,250.8 ------------------------------------------------------------------------------------------------------------ ROLLED PRODUCTS Brazil 995.7 982.1 832.4 3,660.4 3,436.6 North America 1,084.5 621.7 525.5 2,951.4 2,192.7 South America 105.2 83.8 84.2 340.7 338.3 TOTAL 2,185.4 1,687.6 1,442.1 6,952.5 5,967.7 ------------------------------------------------------------------------------------------------------------
o In the fourth quarter of 2002, the output of crude steel totaled 2.9 million tons, 42.6% greater than that of the same period in 2001. Output of rolled products reached 2.2 million tons, presenting an increase of 51.5% when compared to the output volume of the fourth quarter of 2001. o The output of crude steel reached 9.4 million tons in 2002, 30.2% more than in the previous year. The units in Brazil contributed with 63.5% of this volume, while the units in North America contributed with 33.2% and South America with the remaining 3.3%. In rolled products, the volume reached 7.0 million tons in the year, 16.5% more than the output in 2001. o In Brazil, output reached 1.7 million tons of crude steel and 995.7 thousand tons of rolled products in the last quarter of the year. This represented an increase of 18.2% and of 19.6%, respectively, in comparison with the same period in 2001. At Gerdau S.A., the output of crude steel was of 952.2 thousand tons and 897.3 thousand tons of rolled products throughout the fourth quarter. Comparatively, in the same period in 2001, these volumes were 13.2% greater in crude steel and 16.1% in rolled products. At Acominas, the volumes reached 738.8 thousand tons of crude steel (+25.4%) and 98.4 thousand tons of rolled products (+65.4%) in the months of October through December. o In 2002, the companies based in Brazil produced 6.0 million tons of crude steel and 3.7 million tons of rolled products, presenting an increase of 28.4% and 6.5% respectively, above the volumes of 2001, Gerdau S.A. produced 3.6 million tons of crude steel (+3.8%) and 3.3 million tons of rolled products (+1.0%). Meanwhile, Acominas reached the mark of 2.4 million tons of crude steel (+99.6%) and 324.8 thousand tons of rolled products (+140.3%). o The units in North America produced 1.1 million tons of crude steel and 1.1 million tons of rolled products in the last quarter of the year, 109.2% and 106.4% greater, respectively, than that of the fourth quarter of 2001. These variations are explained mostly due to the inclusion of Co-Steel's operations as of October 2002. The accumulated output of crude steel for the year was 3.1 million tons, an evolution of 36.4% over 2001, and of 3.0 million tons of rolled products, 34.6% greater than the volume of the previous year. o In South America (excluding Brazil), the output of crude steel reached 96.9 thousand tons in the fourth quarter of 2002, 26.5% more than in the fourth quarter of 2001. In rolled products output reached 105.2 thousand tons, an increase of 25.0% over the last three months of the previous year. For the full year, output of crude steel was of 312.0 thousand tons and rolled products 340.7 thousand tons, growths of 9.3% and 0.7% respectively over the volumes of 2001. -------------------------------------------------------------------------------- NEW UNITS IN NORTH AMERICA AND THE CONSOLIDATION IN FULL OF ACOMINAS PUSHED SALES TO 9.2 MILLION TONS IN 2002. IN THE FOURTH QUARTER, SHIPMENTS TOTALED 2.7 MILLION TONS, 39.2% MORE THAN IN THE SAME PERIOD IN THE PREVIOUS YEAR. --------------------------------------------------------------------------------
1,000 tonnes 4Q02 3Q02 4Q01 2002 2001 ------------------------------------------------------------------------------------------------------------ BRAZIL Domestic 980.4 1,086.5 798.8 3,874.3 3,656.3 Exports 580.0 494.8 553.6 1,890.7 1,067.9 TOTAL 1,560.4 1,581.3 1,352.4 5,765.0 4,724.2 ------------------------------------------------------------------------------------------------------------ ABROAD North America 1,067.4 646.5 521.3 3,033.8 2,294.2 South America 105.4 86.0 89.6 351.8 376.0 TOTAL 1,172.8 732.5 610.9 3,385.6 2,670.2 ------------------------------------------------------------------------------------------------------------ TOTAL CONSOLIDATED 2,733.2 2,313.8 1,963.3 9,150.6 7,394.4 ------------------------------------------------------------------------------------------------------------
o The increase in the internal demand and the improvement in market conditions in Chile, combined with the consolidation of the new North American units, were the main reasons for the increase of 39.2% of consolidated sales in the fourth quarter of 2002 in relation to the same period in 2001. Shipments in the period totaled 2.7 million tons, of which 57.1% were by companies located in Brazil, and 42.9% from companies abroad. In the year, sales totaled 9.2 million tons, presenting an increase of 23.8% over volumes of 2001. o Sales of Brazilian companies (domestic market and exports) totaled 1.6 million tons in the quarter. This is 15.4% more than in the last quarter of 2001. Sales in the domestic market reached 980.4 thousand tons, 22.7% above the volume shipped in the same period in the previous year. Exports reached 580.0 thousand tons, 4.8% greater than those of the last three months of 2001. The accumulated sales volume for the year reached 5.8 million tons, 22.0% more than in 2001. Exports for the full year reached 1.9 million tons (+77.0%), generating revenues in an amount of US$ 349.8 million. In the domestic market, shipments totaled 3.9 million tons, 6.0% greater than volumes in 2001. o In North America, after consolidating all Gerdau Ameristeel units, sales of semi-finished and finished products reached 1.1 million in the quarter. This presented a growth of 104.8% compared to the fourth quarter of 2001. From January through December, shipments totaled 3.0 million tons, a volume 32.2% greater than that of 2001. o Units in Chile, Uruguay and Argentina shipped 105.4 thousand tons throughout the fourth quarter of 2002. This was 17.7% greater than sales of the same period in the preceding year and accumulated 351.8 thousand tons in this fiscal year. -------------------------------------------------------------------------------- GREATER VOLUME OF SALES AND FOREIGN EXCHANGE CONTRIBUTED TO THE INCREASE OF 55.6% IN NET REVENUES IN THE PERIOD, REACHING R$ 9.2 BILLION. NET PROFIT REACHED R$ 821.0 MILLION IN 2002, 49.0% GREATER THAN THE PREVIOUS YEAR. IN THE LAST QUARTER, PROFIT WAS R$ 195.5 MILLION. --------------------------------------------------------------------------------
In million R$ 4T02 3T02 4T01 2002 2001 NET SALES Brazil consolidated 1,624.8 1,446.4 1,013.1 5,248.0 3,557.5 North America 819.2 1,372.1 279.1 3,513.3 2,059.7 South America 122.4 140.0 7.4 400.4 271.2 TOTAL 2,566.4 2,958.5 1,299.6 9,161.7 5,888.4 ------------------------------------------------------------------------------------------------------- EBITDA Brazil consolidated 528.6 486.4 270.3 1,645.2 974.4 North America 30.7 150.8 23.4 347.3 249.3 South America 27.7 39.9 (5.5) 110.0 58.6 TOTAL 587.0 677.1 288.2 2,102.5 1,282.3 ------------------------------------------------------------------------------------------------------- NET INCOME Brazil consolidated 167.1 265.6 167.2 682.4 516.6 North America 3.9 56.7 9.4 105.0 31.2 South America 24.5 6.8 (1.8) 33.6 3.1 TOTAL 195.5 329.1 174.8 821.0 550.9 -------------------------------------------------------------------------------------------------------
o Results of the fourth quarter of 2002 reflect the consolidation of the Co-Steel operations. The merger was concluded last October. Other factors that have contributed to the performance of the quarter were the improved level of activity at Acominas, the better conditions of the Chilean market and the increase in exports. Conversely, the appreciation of the real in the fourth quarter against the currencies of the countries in which Gerdau operates resulted in a decrease of the amounts expressed in reais originated in those countries. The main lines impacted were revenues/expenses, equity pickup and investments. o Net consolidated revenues in the fourth quarter of 2002 at Metalurgica Gerdau S.A. reached R$ 2.6 billion, presenting a growth of 97.5% compared to the same period in 2001. In the year, revenues totaled R$ 9.2 billion, 55.6% greater than those of the previous year. Operations in Brazil contributed with 57.3% of the revenues whereas North America was responsible for 38.3% and South America for the remaining 4.4%. o The effort to reduce costs and to improve productivity of equipment has compensated for the increase in the prices of certain raw materials throughout the year. The main culprits were scrap and pig-iron. This allowed for a gross margin of 28.63% in the year of 2002, compared to 28.08% in 2001. However, in comparing fourth quarter against fourth quarter, there is a reduction in gross margin of the last two years from 31.34%, in 2001, to 29.03%, in 2002. gross profit reached R$ 745.1 million in the last quarter of 2002, accumulating R$ 2.6 billion in the full year. o EBITDA of the fourth quarter of 2002 reached R$ 587.0 million against R$ 288.2 million in the same months of 2001, presenting a growth of 103.7% in the period and maintaining a margin EBITDA close to 23%. In the year-end accumulated figure, EBITDA totaled R$ 2.1 billion, 64.0% greater than in 2001. EBITDA margin, in the same period, surpassed the mark of 21.78% reaching 22.95%. o The net impact of foreign exchange over debt and assets in foreign currency out of Brazil was positive in R$ 113.3 million in the fourth quarter of 2002. This amount surpassed expenses with interest and monetary variations in the period. This resulted in net financial revenues of R$ 63.4 million. Conversely, net worth of companies abroad suffered the impact of the appreciation of the real therefore translating into a negative equity pick up of R$ 149.5 million in the quarter. Net financial expenses in the year include the negative impact of FX of R$ 607.1 million. This was compensated in part with equity pick up of R$ 447.5 million. o The consolidated net income reached R$ 195.5 million in the fourth quarter this year, a result 11.8% greater than that of the last quarter in 2001. This year, net income was R$ 821.0 million, an increase of 49.0% compared to last year, with net margin at 8.96%. It is worthwhile mentioning that Acominas contributed with R$ 62.7 million to the year's results. This figure does not include the insurance payments for business interruption yet to be received as a result of the accident that hit Acominas in last March. The other Brazilian operations contributed with an additional R$ 619.7 million, North America with R$ 105.0 million and South America with R$ 33.6 million. -------------------------------------------------------------------------------- INVESTMENTS IN FIXED ASSETS STAYED IN LINE WITH GOALS DEFINED FOR THE FISCAL YEAR OF 2002 AND TOTALED US$ 197.0 MILLION, OF WHICH US$ 42.9 MILLION WERE INVESTED IN THE FOURTH QUARTER. -------------------------------------------------------------------------------- o In the last quarter of 2002, investments made by Gerdau in maintenance and technological update of its industrial plants totaled US$ 42.9 million, accumulating US$ 197.0 million in 2002. o The companies in Brazil invested US$ 160.0 million in 2002 (US$ 33.1 million in the fourth quarter), of which US$ 82.1 million were allocated to the Gerdau S.A. units, US$ 75.2 million in Acominas and US$ 2.7 million in the other Brazilian companies. o Abroad, the Gerdau units invested US$ 37.0 million (US$ 9.8 million in the last quarter), of which US$ 29.2 million in North America and US$ 7.8 million in South America. -------------------------------------------------------------------------------- SWAPS AND DOLLAR-PEGGED INVESTMENTS SERVED AS PROTECTION AGAINST THE DEVALUATION OF THE REAL. NET DEBT, IN DECEMBER, REPRESENTED 2.7X EBITDA. -------------------------------------------------------------------------------- o On December 31st, 2002, the consolidated gross debt was of R$ 7.1 billion of which 52.4% short term (R$ 3.7 billion) and 47.6% long term (R$ 3.4 billion). Even with the consolidation of Co-Steel's liabilities, the payment of debt due in the quarter and the appreciation of the real vis-a-vis the US dollar in the period of October through December, caused the final end-of-the-year indebtedness to remain at the same levels of September 30th. o Of the total amount of the short term debt, R$ 518.5 million refer to the debt in domestic currency, R$ 1.6 billion in foreign currency out of Brazil and R$ 1.6 billion of companies abroad. o The long term debt is composed of R$ 1.0 billion in domestic currency, R$ 897.8 million in foreign currency out of Brazil and R$ 1.5 billion from companies abroad. o In the last two years, Gerdau has made several swaps envisaging the protection of the fluctuations of the US dollar and the real. The swap of debt contracted in US dollars into reais was done at an average rate of 70% of the CDI. In December 31st, 2002, of a total of R$ 2.5 billion in debt contracted in foreign currency by the Brazilian companies R$ 2.0 billion were protected from these fluctuations (amounts converted into reais at the date of the contracting). o On December 31st, 2002, EBITDA represented 5.9X net financial expenses (excluding monetary variations and FX) and net debt represented 2.7X EBITDA of the last 12 months. o The balance of cash and equivalents at the end of the year totaled R$ 1.4 billion of which 65.6% (R$ 931.5 million) were indexed to the US dollar. -------------------------------------------------------------------------------- EUROPEAN INVESTORS CAN NOW BUY GERDAU SHARES AT THE LATIBEX (STOCK EXCHANGE OF MADRID). -------------------------------------------------------------------------------- o On November 2002, three ABAMEC presentations were held to present the results of the Gerdau companies on the third quarter. On the 18th, the meeting was held in Rio de Janeiro, and on the 19th in Sao Paulo and Porto Alegre. o As of December 2nd, the preferred shares of Gerdau S.A. began trading at the Latibex on the Stock Exchange of Madrid, Spain, where Latin-American companies have their shares traded in Euros. o Based on the year-end results, and as an addition to the amounts paid in August, the payment of interest on capital stock and dividends pertaining to the second half of 2002 was determined on December 30th, to be paid in February 18th, 2003. The shareholders of Metalurgica Gerdau S.A. will receive R$ 5.00 per lot of one thousand shares (R$ 104.0 million) and those of Gerdau S.A. R$ 1.63 per lot of one thousand shares (R$ 186.0 million). o At Bovespa, shares of Gerdau S.A. (GGBR) moved R$ 412.1 million during the fourth quarter, with 17,949 deals and 13.3 billion titles traded. The yearly volume of Gerdau S.A. shares moved R$ 1.4 billion, 114.4% more than in 2001. Throughout the year, there were 54,716 deals, and with 47.3 billion shares traded. In 2002, the average daily trade was of R$ 5.5 million and preferred shares appreciated 73.7% in the full year. o In the United States, where Gerdau S.A. has ADRs traded on the New York Stock Exchange (GGB) since 1999, there were 3.1 million shares traded in the last quarter of the year. This moved US$ 26.2 million. In 2002 there were 14.0 million ADRs traded which moved US$ 144.1 million, that is, a daily average of US$ 569.7 thousand. o Trades with Metalurgica Gerdau S.A. at the Bovespa (GOAU) during the last quarter of 2002, totaled 1.8 billion titles. There were 3,132 trades, which moved R$ 91.3 million. From January through December, there were 6.7 billion shares traded in 9,759 deals. This moved R$ 303.0 million in the period, 22.5% greater than in 2001. The appreciation of preferred shares was of 103.1% and the average daily trade reached R$ 1.1 million. o On February 6th, conference calls will be held both in Portuguese and in English to comment the year-end's results. Those interested in listening in should access the following site www.gerdau.com.br/ri. MANAGEMENT METALURGICA GERDAU S.A. - NON CONSOLIDATED BALANCE SHEET CORPORATE LAW - R$ THOUSAND DEC/2002 SEP/2002 DEC/2001 ASSETS CURRENT ASSETS Cash and cash equivalents 63.861 72.915 71.600 Trade accounts receivable - - Inventories - - Others 92.981 15.606 65.339 TOTAL CURRENT ASSETS 156.842 88.521 136.939 LONG-TERM RECEIVABLES Escrow and other receivables 17.568 12.518 12.014 TOTAL LONG-TERM RECEIVABLES 17.568 12.518 12.014 PERMANENT ASSETS Investments 1.596.773 1.623.060 1.328.111 Fixed assets 1.888 1.926 2.038 TOTAL PERMANET ASSETS 1.598.661 1.624.986 1.330.149 TOTAL ASSETS 1.773.071 1.726.025 1.479.102 ================================================================================ CORPORATE LAW - R$ THOUSAND DEC/2002 SEP/2002 DEC/2001 LIABILITIES CURRENT LIABILITIES Trade accounts payable 31 47 2 Loans and financing 18 537 - Others 108.619 9.685 59.312 TOTAL CURRENT LIABILITIES 108.668 10.269 59.314 LONG-TERM LIABILITIES Loans and financing - - - Debentures 912 53.862 56.397 Reserve for contingencies and others 87.425 79.543 34.685 TOTAL LONG-TERM LIABILITIES 88.337 133.405 91.082 MINORITY SHAREHOLDERS SHAREHOLDERS' EQUITY Capital stock 640.000 640.000 520.280 Capital reserves/ Retained earnings 936.066 942.351 808.426 NET WORTH CAPITAL + MINORITY SHAREHOLDERS 1.576.066 1.582.351 1.328.706 TOTAL LIABILITIES 1.773.071 1.726.025 1.479.102 ================================================================================ METALURGICA GERDAU S.A. - NON CONSOLIDATED FINANCIAL STATEMENT
CORPORATE LAW - R$ THOUSAND 4Q2002 3Q2002 4Q2001 2002 2001 GROSS SALES REVENUE - - - - - Taxes on sales - - - - - Freight and discount - - - - - NET SALES REVENUES - - - - - Cost of sales - - - - - GROSS PROFIT - - - - - Selling Expenses - - - - - Financial Expenses (2.387) (3.470) (2.194) (12.520) (8.521) Fianancial Revenues 3.633 3.316 3.362 17.201 12.294 General and administrative (8.495) (2.882) (7.000) (20.645) (20.806) Equity pick-up 128.635 171.830 59.495 473.446 278.005 Other operating expenses 2 4.379 145 4.406 466 OPERATING PROFIT 121.388 173.173 53.808 461.888 261.438 Non-operating result (18.996) (96) (270) (20.193) (273) PROFIT BEFORE TAXES/PARTICIPATION 102.392 173.077 53.538 441.695 261.165 Provision for income tax and social contribution (3.715) 1.113 (1.358) (4.861) (5.081) Statutory participation (794) (664) (790) (2.806) (2.772) NET PROFIT FOR THE PERIOD 97.883 173.526 51.390 434.028 253.312 ============================================================================================================== Profit per lot of 1,000 shares - R$ 4,71 8,35 2,47 20,87 12,18 Book value per lot of 1,000 shares 75,80 76,10 63,90 75,80 63,90 Outstanding shares (million) 20.792 20.792 20.792 20.792 20.792 ============================================================================================================== METALURGICA GERDAU S.A. - NON CONSOLIDATED CASH FLOW CORPORATE LAW - R$ THOUSAND 4Q2002 3Q2002 4Q2001 2002 2001 Net income 97.883 173.526 51.390 434.028 253.312 Equity pick up (128.635) (171.830) (59.495) (473.446) (278.005) Provision for credit risk - - - - - Gain/Loss in fixed asset disposal - - - - - Gain/Loss in liquidation of investment 18.996 96 266 20.193 273 Exchange on long term debt 2.525 2.611 1.359 9.920 4.543 Depreciation and amortization 37 38 37 151 151 Investment incentives - - - - 131 Income tax and social contribution 2.262 (352) 1.574 1.791 5.030 Interest paid 524 573 647 2.252 2.383 Contingencies/legal deposits 17 (4.468) (85) (4.191) 151 Increase (decrease) in trade account payable - - - - - Changes in inventories - - - - - Changes in trade accounts payable 30 (2) (40) 30 (4) Changes in other assets and liabilities account 7.284 (1.727) 4.955 8.485 2.887 NET CASH PROVIDED BY OPERATING ACTIVITIES 923 (1.535) 608 (787) (9.148) Fixed assets acquisitons/ disposals - - - - - Deferred charges - - - - - Investments acquisitions/ disposals (8.661) (2) 1.367 (8.661) 8.458 Dividends 4.912 34.759 5.411 94.425 60.129 CASH (APPLIED TO) INVESTING ACTIVITIES (3.749) 34.757 6.778 85.764 68.587 Fixed assets suppliers - - - - - Working capital financing (1.640) (1.608) - 48.177 - Debentures (1.041) (1.051) (1.403) (3.281) (3.328) Proceeds from fixed assets financing - - - - - Payments of fixed assets financing - - - - - Interest paid for financing - (28) (24) (81) (24) Inter companies loans (765) 1.110 374 568 Dividend/ interest & statutory particip, payment (2.782) (34.036) (4.621) (137.905) (54.591) CASH PROVIDED BY (APPLIED TO) FINANCING ACTIVITIES (6.228) (35.613) (7.121) (92.716) (57.375) NET CHANGE IN CASH (9.054) (2.391) 265 (7.739) 2.064 CASH BALANCE At the beginning of the period 72.915 75.306 71.335 71.600 69.536 At the end of the period 63.861 72.915 71.600 63.861 71.600 CASH COMPOSITION Temporary cash investments 63.847 72.911 71.562 63.847 71.562 Cash 14 4 38 14 38 ==============================================================================================================
METALURGICA GERDAU S.A. - CONSOLIDATED BALANCE SHEET CORPORATE LAW - R$ THOUSAND DEC/2002 SEP/2002 DEC/2001 ASSETS CURRENT ASSETS Cash and cash equivalents 1.420.236 1.966.259 1.003.384 Trade accounts receivable 1.424.595 1.305.582 863.821 Inventories 2.220.055 1.773.620 1.331.155 Others 402.828 479.619 216.499 TOTAL CURRENT ASSETS 5.467.714 5.525.080 3.414.859 LONG-TERM RECEIVABLES Escrow and other receivables 571.035 392.006 286.767 TOTAL LONG-TERM RECEIVABLES 571.035 392.006 286.767 PERMANENT ASSETS Investments 917.751 476.578 313.269 Fixed assets 7.605.413 6.769.762 5.765.825 TOTAL PERMANET ASSETS 8.523.164 7.246.340 6.079.094 TOTAL ASSETS 14.561.913 13.163.426 9.780.720 ================================================================================ CORPORATE LAW - R$ THOUSAND DEC/2002 SEP/2002 DEC/2001 LIABILITIES CURRENT LIABILITIES Trade accounts payable 924.330 737.538 579.714 Loans and financing 3.745.743 4.021.003 2.123.716 Others 805.356 530.915 476.838 TOTAL CURRENT LIABILITIES 5.475.429 5.289.456 3.180.268 LONG-TERM LIABILITIES Loans and financing 2.750.492 2.603.380 1.841.526 Debentures 646.463 515.411 203.645 Reserve for contingencies and others 1.283.974 903.489 674.932 TOTAL LONG-TERM LIABILITIES 4.680.929 4.022.280 2.720.103 MINORITY SHAREHOLDERS 2.829.489 2.269.339 2.551.643 SHAREHOLDERS' EQUITY Capital stock 640.000 640.000 520.280 Capital reserves/ Retained earnings 936.066 942.351 808.426 NET WORTH CAPITAL + MINORITY SHAREHOLDERS 4.405.555 3.851.690 3.880.349 TOTAL LIABILITIES 14.561.913 13.163.426 9.780.720 ================================================================================ METALURGICA GERDAU S.A. - CONSOLIDATED FINANCIAL STATEMENT
CORPORATE LAW - R$ THOUSAND 4Q2002 3Q2002 Q2001 2002 2001 GROSS SALES REVENUE 3.081.499 3.590.854 1.576.964 11.143.960 7.083.601 Taxes on sales (325.741) (314.965) (211.686) (1.133.490) (865.009) Freight and discount (189.400) (317.432) (65.642) (848.758) (330.189) NET SALES REVENUES 2.566.358 2.958.457 1.299.636 9.161.712 5.888.403 Cost of sales (1.821.229) (2.137.035) (892.307) (6.538.993) (4.235.146) GROSS PROFIT 745.129 821.422 407.329 2.622.719 1.653.257 Selling Expenses (98.623) (93.340) (79.625) (337.609) (264.690) Financial Expenses 16.786 (894.796) 40.585 (1.367.600) (635.233) Fianancial Revenues 46.644 166.821 46.670 302.067 153.436 General and administrative (185.733) (213.879) (126.649) (694.538) (497.491) Equity pick-up (149.527) 492.218 (144.609) 447.483 182.474 Other operating expenses (84.515) 56.965 (5.538) 21.998 (4.389) OPERATING PROFIT 290.161 335.411 138.163 994.520 587.364 Non-operating result (41.101) (18.029) 2.440 (70.097) (3.197) PROFIT BEFORE TAXES/PARTICIPATION 249.060 317.382 140.603 924.423 584.167 Provision for income tax and social contribution (47.654) 15.882 38.036 (86.856) (20.519) Statutory participation (5.872) (4.144) (3.801) (16.551) (12.766) NET PROFIT FOR THE PERIOD 195.534 329.120 174.838 821.016 550.882 ================================================================================================================ METALURGICA GERDAU S.A. - CONSOLIDATED CASH FLOW CORPORATE LAW - R$ THOUSAND 4Q2002 3Q2002 4Q2001 2002 2001 Net income 195.534 329.120 174.838 821.016 550.882 Equity pick up 149.527 (492.218) 144.609 (447.483) (182.474) Provision for credit risk 2.745 1.284 (2.589) 5.452 12.407 Gain/Loss in fixed asset disposal 2.227 2.840 7.299 8.190 24.120 Gain/Loss in liquidation of investment 22.328 7 5.398 27.614 5.401 Exchange on long term debt (173.363) 735.944 (131.949) 761.826 158.758 Depreciation and amortization 126.273 162.888 87.146 511.929 391.194 Investment incentives 22.646 11.132 8.913 56.378 34.332 Income tax and social contribution 72.001 (58.449) (71.105) 10.142 6.973 Interest paid 125.640 136.234 53.404 464.260 250.680 Contingencies/legal deposits 2.568 4.560 (16.199) 2.191 (11.155) Increase (decrease) in trade account payable 178.811 (144.630) 230.079 (161.318) 81.109 Changes in inventories (154.001) (27.208) (44.478) (222.708) (51.854) Changes in trade accounts payable (95.294) (87.638) (60.305) (46.140) 62.935 Changes in other assets and liabilities account (2.140) (32.553) (124.101) (173.308) (148.500) NET CASH PROVIDED BY OPERATING ACTIVITIES 475.502 541.313 260.960 1.618.041 1.184.808 Fixed assets acquisitons/ disposals (139.248) (141.803) (184.139) (565.851) (444.283) Deferred charges 687 (1.451) (512) (6.134) (2.858) Investments acquisitions/ disposals 97.578 (907.628) (332.520) (913.011) (335.908) Dividends - - - - - CASH (APPLIED TO) INVESTING ACTIVITIES (40.983) (1.050.882) (517.171) (1.484.996) (783.049) Fixed assets suppliers 13.697 (7.881) (9.122) (13.449) (10.843) Working capital financing 102.175 364.733 (30.367) 640.514 (29.969) Debentures (41.109) 309.464 (31.893) 242.659 (45.703) Proceeds from fixed assets financing 9.458 933.725 516.451 1.476.379 909.953 Payments of fixed assets financing (846.274) (144.098) (62.579) (1.823.826) (749.918) Interest paid for financing (103.346) (92.144) (73.872) (351.052) (208.486) Inter companies loans 16.600 (21.497) 2.142 845 (10.356) Dividend/ interest & statutory particip, payment (1.697) (78.617) (4.495) (259.366) (135.061) CASH PROVIDED BY (APPLIED TO) FINANCING ACTIVITIES (850.496) 1.263.685 306.265 (87.296) (280.383) NET CHANGE IN CASH (415.977) 754.116 50.054 45.749 121.376 CASH BALANCE At the beginning of the period 1.966.259 845.334 909.606 1.003.384 689.170 Effetcs of exchange rates changes on cash (182.432) 366.809 (75.624) 318.717 73.490 Begining balance (companies consolidated in the year) 52.386 - 119.348 52.386 119.348 At the end of the period 1.420.236 1.966.259 1.003.384 1.420.236 1.003.384 CASH COMPOSITION Temporary cash investments 1.345.717 1.813.292 994.691 1.345.717 994.691 Cash 74.519 152.967 8.693 74.519 8.693 ===============================================================================================================
GERDAU S.A. - NON CONSOLIDATED BALANCE SHEET CORPORATE LAW - R$ THOUSAND DEC/2002 SEP/2002 DEC/2001 ASSETS CURRENT ASSETS Cash and cash equivalents 365.680 373.120 177.400 Trade accounts receivable 476.157 535.248 402.919 Inventories 619.693 523.200 499.900 Others 112.337 126.275 90.659 TOTAL CURRENT ASSETS 1.573.867 1.557.843 1.170.878 LONG-TERM RECEIVABLES Escrow and other receivables 141.748 140.629 131.374 TOTAL LONG-TERM RECEIVABLES 141.748 140.629 131.374 PERMANENT ASSETS Investments 4.410.913 4.139.394 1.759.939 Fixed assets 1.680.211 1.651.969 1.623.648 TOTAL PERMANET ASSETS 6.091.124 5.791.363 3.383.587 TOTAL ASSETS 7.806.739 7.489.835 4.685.839 ================================================================================ CORPORATE LAW - R$ THOUSAND DEC/2002 SEP/2002 DEC/2001 LIABILITIES CURRENT LIABILITIES Trade accounts payable 148.328 126.325 111.891 Loans and financing 1.237.464 941.013 327.987 Others 342.729 151.787 251.473 TOTAL CURRENT LIABILITIES 1.728.521 1.219.125 691.351 LONG-TERM LIABILITIES Loans and financing 1.032.164 1.119.214 852.258 Debentures 539.922 553.397 231.317 Reserve for contingencies and others 1.212.906 1.315.721 225.154 TOTAL LONG-TERM LIABILITIES 2.784.992 2.988.332 1.308.729 MINORITY SHAREHOLDERS - - - SHAREHOLDERS' EQUITY Capital stock 1.335.120 1.335.120 1.320.133 Capital reserves/ Retained earnings 1.958.106 1.947.258 1.365.626 NET WORTH CAPITAL + MINORITY SHAREHOLDERS 3.293.226 3.282.378 2.685.759 TOTAL LIABILITIES 7.806.739 7.489.835 4.685.839 =============================================================================== GERDAU S.A. - NON CONSOLIDATED FINANCIAL STATEMENT
CORPORATE LAW - R$ THOUSAND 4Q2002 3Q2002 4Q2001 2002 2001 GROSS SALES REVENUE 1.456.669 1.419.375 996.001 5.093.107 3.947.873 Taxes on sales (271.922) (257.091) (191.355) (946.759) (755.923) Freight and discount (47.372) (39.753) (26.118) (146.227) (119.306) NET SALES REVENUES 1.137.375 1.122.531 778.528 4.000.121 3.072.644 Cost of sales (687.574) (650.497) (448.796) (2.379.077) (1.908.133) GROSS PROFIT 449.801 472.034 329.732 1.621.044 1.164.511 Selling Expenses (73.034) (64.941) (63.298) (249.901) (211.277) Financial Expenses 25.862 (496.970) (15.100) (680.724) (371.222) Fianancial Revenues 34.775 53.367 20.441 118.493 67.732 General and administrative (79.023) (75.459) (73.445) (288.592) (272.064) Equity pick-up (101.543) 414.124 (53.236) 393.147 177.103 Other operating expenses 2.611 2.255 2.454 8.695 10.432 OPERATING PROFIT 259.449 304.410 147.548 922.162 565.215 Non-operating result (18.458) (13.757) (18.714) (41.304) (23.128) PROFIT BEFORE TAXES/PARTICIPATION 240.991 290.653 128.834 880.858 542.087 Provision for income tax and social contribution (61.075) 37.606 (34.541) (69.537) (70.175) Statutory participation (4.478) (3.479) (2.363) (12.633) (7.906) NET PROFIT FOR THE PERIOD 175.438 324.780 91.930 798.688 464.006 =================================================================================================================== Profit per lot of 1,000 shares - R$ 1,54 2,85 0,81 7,00 4,09 Book value per lot of 1,000 shares 28,86 28,76 23,66 28,86 23,66 Outstanding shares (million) 114.118 114.118 113.492 114.118 113.492 =================================================================================================================== GERDAU S.A. - NON CONSOLIDATED CASH FLOW CORPORATE LAW - R$ THOUSAND 4Q2002 3Q2002 4Q2001 2002 2001 Net income 175.438 324.780 91.930 798.688 464.006 Equity pick up 101.543 (414.124) 53.236 (393.147) (177.103) Provision for credit risk 4.911 - (1.616) 4.911 13.758 Gain/Loss in fixed asset disposal 735 584 656 5.625 19.909 Gain/Loss in liquidation of investment - (90) 18.056 4.087 18.056 Exchange on long term debt (98.167) 418.582 (24.347) 428.566 172.571 Depreciation and amortization 46.780 46.494 40.884 184.123 172.061 Investment incentives 22.646 11.132 8.907 56.378 34.063 Income tax and social contribution 55.672 (55.601) 6.091 4.769 24.822 Interest paid 69.493 69.537 33.977 227.040 168.303 Contingencies/legal deposits 3.469 (956) (16.515) (4.067) (9.053) Increase (decrease) in trade account payable 54.810 (80.612) 84.919 (84.816) (15.623) Changes in inventories (96.493) 21.535 (22.694) (119.793) (62.927) Changes in trade accounts payable 8.646 11.589 15.544 33.309 30.524 Changes in other assets and liabilities account (23.226) 7.880 (24.742) 2.902 (41.651) NET CASH PROVIDED BY OPERATING ACTIVITIES 326.257 360.730 264.286 1.148.575 811.716 Fixed assets acquisitons/ disposals (75.501) (59.359) (46.966) (244.867) (172.762) Deferred charges (256) (303) (571) (1.444) (2.074) Investments acquisitions/ disposals (404.926) (1.409.775) (53.794) (2.307.556) (1.403) Dividends 17.457 2.600 1.124 30.628 1.124 CASH (APPLIED TO) INVESTING ACTIVITIES (463.226) (1.466.837) (100.207) (2.523.239) (175.115) Fixed assets suppliers 12.976 (1) (8.875) 2.747 (10.653) Working capital financing 195.437 340.224 (66.282) 598.163 (73.705) Debentures (40.620) 311.313 (15.482) 250.959 (27.367) Proceeds from fixed assets financing 82.494 78.831 19.588 654.749 80.049 Payments of fixed assets financing (77.496) (35.644) (231.588) (472.577) (342.969) Interest paid for financing (42.337) (17.229) (54.225) (124.597) (129.972) Inter companies loans 529 791.500 16.790 854.990 (15.173) Dividend/ interest & statutory particip, payment (1.454) (80.054) (1.939) (201.490) (127.599) CASH PROVIDED BY (APPLIED TO) FINANCING ACTIVITIES 129.529 1.388.940 (342.013 1.562.944 (647.389) NET CHANGE IN CASH (7.440) 282.833 (177.934) 188.280 (10.788) CASH BALANCE At the beginning of the period 373.120 90.287 355.334 177.400 188.188 Effetcs of exchange rates changes on cash - - - - - Cash of companies purchased - - - - - At the end of the period 365.680 373.120 177.400 365.680 177.400 CASH COMPOSITION Temporary cash investments 327.087 344.432 177.227 327.087 177.227 Cash 38.593 28.688 173 38.593 173 ===================================================================================================================
GERDAU S.A. - CONSOLIDATED BALANCE SHEET CORPORATE LAW - R$ THOUSAND DEC/2002 SEP/2002 DEC/2001 ASSETS CURRENT ASSETS Cash and cash equivalents 1.430.656 1.962.858 1.012.822 Trade accounts receivable 1.376.029 1.255.855 829.010 Inventories 2.219.981 1.773.620 1.331.133 Others 344.423 439.325 187.317 TOTAL CURRENT ASSETS 5.371.089 5.431.658 3.360.282 LONG-TERM RECEIVABLES Escrow and other receivables 553.098 379.203 274.173 TOTAL LONG-TERM RECEIVABLES 553.098 379.203 274.173 PERMANENT ASSETS Investments 916.234 475.208 310.595 Fixed assets 7.621.587 6.816.317 5.821.370 TOTAL PERMANET ASSETS 8.537.821 7.291.525 6.131.965 TOTAL ASSETS 14.462.008 13.102.386 9.766.420 =============================================================================== CORPORATE LAW - R$ THOUSAND DEC/2002 SEP/2002 DEC/2001 LIABILITIES CURRENT LIABILITIES Trade accounts payable 925.541 738.209 580.790 Loans and financing 3.707.916 3.969.646 2.106.653 Others 755.440 518.722 466.852 TOTAL CURRENT LIABILITIES 5.388.897 5.226.577 3.154.295 LONG-TERM LIABILITIES Loans and financing 2.750.492 2.603.380 1.841.526 Debentures 709.367 534.240 218.591 Reserve for contingencies and others 1.192.609 819.664 636.157 TOTAL LONG-TERM LIABILITIES 4.652.468 3.957.284 2.696.274 MINORITY SHAREHOLDERS 1.127.417 636.147 1.230.092 SHAREHOLDERS' EQUITY Capital stock 1.335.120 1.335.120 1.320.133 Capital reserves/ Retained earnings 1.958.106 1.947.258 1.365.626 NET WORTH CAPITAL + MINORITY SHAREHOLDERS 4.420.643 3.918.525 3.915.851 TOTAL LIABILITIES 14.462.008 13.102.386 9.766.420 =============================================================================== GERDAU S.A. - CONSOLIDATED FINANCIAL STATEMENT
CORPORATE LAW - R$ THOUSAND 4Q2002 3Q2002 4Q2001 2002 2001 GROSS SALES REVENUE 3.081.499 3.590.854 1.576.964 11.143.960 7.083.601 Taxes on sales (325.741) (314.965) (211.686) (1.133.490) (865.009) Freight and discount (189.400) (317.432) (65.642) (848.758) (330.189) NET SALES REVENUES 2.566.358 2.958.457 1.299.636 9.161.712 5.888.403 Cost of sales (1.821.229) (2.137.035) (892.307) (6.538.993) (4.235.146) GROSS PROFIT 745.129 821.422 407.329 2.622.719 1.653.257 Selling Expenses (98.603) (93.340) (79.625) (337.589) (264.690) Financial Expenses 19.348 (890.728) 41.970 (1.360.357) (633.072) Fianancial Revenues 38.189 160.651 42.359 276.712 133.178 General and administrative (174.345) (208.728) (117.649) (664.785) (469.644) Equity pick-up (179.511) 492.217 (151.275) 408.730 160.295 Other operating expenses (84.849) 52.155 (5.984) 16.048 (5.926) OPERATING PROFIT 265.358 333.649 137.125 961.478 573.398 Non-operating result (22.104) (17.933) 2.708 (49.903) (2.925) PROFIT BEFORE TAXES/PARTICIPATION 243.254 315.716 139.833 911.575 570.473 Provision for income tax and social contribution (43.123) 15.200 39.552 (79.891) (14.184) Statutory participation (5.079) (3.479) (3.012) (13.746) (9.994) NET PROFIT FOR THE PERIOD 195.052 327.437 176.373 817.938 546.295 =================================================================================================================== GERDAU S.A - CONSOLIDATED CASH FLOW CORPORATE LAW - R$ THOUSAND 4Q2002 3Q2002 4Q2001 2002 2001 Net income 195.052 327.437 176.373 817.938 546.295 Equity pick up 179.511 (492.217) 151.275 (408.730) (160.295) Provision for credit risk 3.056 953 (2.993) 5.432 11.909 Gain/Loss in fixed asset disposal 2.227 2.840 7.299 8.190 24.120 Gain/Loss in liquidation of investment 3.331 (89) 5.129 7.420 5.129 Exchange on long term debt (177.532) 728.806 (146.777) 748.573 140.745 Depreciation and amortization 126.233 162.849 87.106 511.771 391.037 Investment incentives 22.646 11.132 8.913 56.378 34.201 Income tax and social contribution 69.058 (58.264) (72.444) 7.755 2.976 Interest paid 123.181 133.378 52.695 454.651 248.297 Contingencies/legal deposits 2.551 9.028 (16.114) 6.334 (11.306) Increase (decrease) in trade account payable 177.340 (133.987) 219.607 (147.543) 64.460 Changes in inventories (154.056) (27.153) (44.479) (222.708) (51.974) Changes in trade accounts payable (94.754) (88.204) (60.303) (46.005) 62.729 Changes in other assets and liabilities account (8.688) (24.403) (119.566) (172.051) (131.208) NET CASH PROVIDED BY OPERATING ACTIVITIES 469.156 552.106 245.721 1.627.405 1.177.115 Fixed assets acquisitons/ disposals (139.247) (141.803) (184.139) (565.828) (444.266) Deferred charges 685 (1.450) (512) (6.135) (2.858) Investments acquisitions/ disposals 105.628 (907.610) (333.941) (906.213) (345.132) Dividends - - - - - CASH (APPLIED TO) INVESTING ACTIVITIES (32.934) (1.050.863) (518.592) (1.478.176) (792.256) Fixed assets suppliers 13.697 (7.881) (9.122) (13.449) (10.843) Working capital financing 115.185 345.278 (34.199) 618.679 (21.972) Debentures (48.942) 311.863 (28.208) 238.414 (40.093) Proceeds from fixed assets financing 9.458 933.725 514.464 1.476.379 909.953 Payments of fixed assets financing (844.634) (137.781) (61.417) (1.872.003) (748.756) Interest paid for financing (101.411) (89.832) (73.872) (343.614) (208.486) Inter companies loans 19.306 (21.960) 3.269 3.771 (10.999) Dividend/ interest & statutory particip, payment (1.037) (79.455) (4.503) (210.675) (137.848) CASH PROVIDED BY (APPLIED TO) FINANCING ACTIVITIES (838.378) 1.253.957 306.412 (102.498) (269.044) NET CHANGE IN CASH (402.156) 755.200 33.541 46.731 115.815 CASH BALANCE At the beginning of the period 1.962.858 840.849 935.557 1.012.822 704.169 Effetcs of exchange rates changes on cash (182.432) 366.809 (75.624) 318.717 73.490 Begining balance (companies consolidated in the year) 52.386 - 119.348 52.386 119.348 At the end of the period 1.430.656 1.962.858 1.012.822 1.430.656 1.012.822 CASH COMPOSITION Temporary cash investments 1.359.288 1.814.307 1.005.700 1.359.288 1.005.700 Cash 71.368 148.551 7.122 71.368 7.122 ===================================================================================================================