0001104659-19-044538.txt : 20190807 0001104659-19-044538.hdr.sgml : 20190807 20190807162015 ACCESSION NUMBER: 0001104659-19-044538 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 16 CONFORMED PERIOD OF REPORT: 20190807 FILED AS OF DATE: 20190807 DATE AS OF CHANGE: 20190807 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GERDAU S.A. CENTRAL INDEX KEY: 0001073404 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES & ROLLING & FINISHING MILLS [3310] IRS NUMBER: 000000000 STATE OF INCORPORATION: D5 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14878 FILM NUMBER: 191005774 BUSINESS ADDRESS: STREET 1: AV DOUTORA RUTH CARDOSO, 8,501 STREET 2: 8TH FLOOR CITY: SAO PAULO, SP STATE: D5 ZIP: 05425-070 BUSINESS PHONE: 011-55-51-3323-2703 MAIL ADDRESS: STREET 1: AV DOUTORA RUTH CARDOSO, 8,501 STREET 2: 8TH FLOOR CITY: SAO PAULO, SP STATE: D5 ZIP: 05425-070 FORMER COMPANY: FORMER CONFORMED NAME: GERDAU SA DATE OF NAME CHANGE: 19981112 6-K 1 a19-16619_26k.htm 6-K

 

 

FORM 6-K

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE

SECURITIES EXCHANGE ACT OF 1934

 

Dated August 7, 2019

 

Commission File Number 1-14878

 

GERDAU S.A.

(Exact Name as Specified in its Charter)

 

N/A

(Translation of Registrant’s Name)

 

Av. das Nações Unidas, 8,501 — 8° andar

São Paulo, São Paulo - Brazil CEP 05425-070

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

 

Form 20-F  x

 

Form 40-F  o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

 

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes  o

 

No  x

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):  Not applicable.

 

 

 


 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused the Report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date:  August 7, 2019

 

 

GERDAU S.A.

 

 

 

 

 

 

By:

/s/ Harley Lorentz Scardoelli

 

Name:

Harley Lorentz Scardoelli

 

Title:

Investor Relations Director

 

2


 

EXHIBIT INDEX

 

Exhibit

 

Description of Exhibit 

 

 

 

99.1

 

Quarterly Results Gerdau S.A. 2Q19

 

3


EX-99.1 2 a19-16619_2ex99d1.htm EX-99.1

Exhibit 99.1

 

 


 

São Paulo, August 7, 2019 — Gerdau S.A. (B3: GGBR4 / NYSE: GGB) announces its results for the second quarter of 2019. The consolidated financial statements of the Company are presented in Brazilian real (R$), in accordance with International Financial Reporting Standards (IFRS) and the accounting practices adopted in Brazil. The information in this report does not include the data of associates and jointly controlled entities, except where stated otherwise.

 

CONSOLIDATED HIGHLIGHTS

 

·                      EBITDA margin expands from 14.6% in 2Q18 to 15.5% in 2Q19, reflecting the Company’s new asset portfolio, despite the less favorable business environment.

 

·                      Free cash flow of R$361 million in 2Q19, compared to R$86 million in 2Q18, reversing the negative trend in 1Q19.

 

·                      Selling, general and administrative expenses decrease 18% in 2Q19 compared to 2Q18, aligned with the strategy of rigorous austerity in costs and expenses.

 

·                      Dividend distribution in 2Q19 of R$ 119 million (R$ 0.07 per share).

 

 

2


 

CONSOLIDATED INFORMATION

 

GERDAU’S PERFORMANCE IN 2Q19

 

Results of Operations

 

CONSOLIDATED

 

2Q19

 

2Q18

 

D

 

1Q19

 

D

 

6M19

 

6M18

 

D

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Volumes (1,000 tonnes)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Production of crude steel

 

3,425

 

3,989

 

-14.1

%

3,343

 

2.5

%

6,768

 

8,154

 

-17.0

%

Shipments of steel

 

2,972

 

3,834

 

-22.5

%

2,985

 

-0.4

%

5,957

 

7,705

 

-22.7

%

Results (R$ million)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

10,154

 

12,035

 

-15.6

%

10,026

 

1.3

%

20,180

 

22,424

 

-10.0

%

Cost of Goods Sold

 

(8,881

)

(10,391

)

-14.5

%

(8,757

)

1.4

%

(17,638

)

(19,440

)

-9.3

%

Gross profit

 

1,273

 

1,644

 

-22.6

%

1,269

 

0.3

%

2,542

 

2,984

 

-14.8

%

Gross margin (%)

 

12.5

%

13.7

%

 

 

12.7

%

 

 

12.6

%

13.3

%

 

 

SG&A

 

(354

)

(431

)

-17.9

%

(368

)

-3.8

%

(722

)

(851

)

-15.2

%

Selling expenses

 

(122

)

(158

)

-22.8

%

(129

)

-5.4

%

(251

)

(308

)

-18.5

%

General and administrative expenses

 

(232

)

(273

)

-15.0

%

(239

)

-2.9

%

(471

)

(543

)

-13.3

%

%SG&A/Net Sales

 

3.5

%

3.6

%

 

 

3.7

%

 

 

3.6

%

3.8

%

 

 

Adjusted EBITDA

 

1,572

 

1,756

 

-10.5

%

1,552

 

1.3

%

3,123

 

3,240

 

-3.6

%

Adjusted EBITDA Margin

 

15.5

%

14.6

%

 

 

15.5

%

 

 

15.5

%

14.4

%

 

 

 

Production and shipments

 

In 2Q19, crude steel production and steel shipments decreased in relation to 2Q18, reflecting the asset divestments in the previous year. In 2018, the operations in Chile and India and most of the rebar units in the United States were divested.

 

Operating result

 

Despite the increase in net sales per tonne sold in all Business Divisions (BDs), the divestments adversely affected consolidated net sales in 2Q19 compared to 2Q18.

 

Consolidated cost of goods sold decreased in 2Q19 in relation to 2Q18, mainly due to the divestments. Excluding divestments, cost of goods sold increased slightly, influenced primarily by the higher prices of iron ore, coal and pig iron.

 

Consolidated gross profit and gross margin decreased in 2Q19 in relation to 2Q18, explained by the divestments and by the increase in cost per tonne sold outpacing the increase in net sales per tonne sold in the period.

 

Selling, general and administrative expenses in 2Q19 decreased in relation to both 2Q18 and 1Q19, to 3.5% of net sales, reflecting the ongoing operating efficiency gains and the digital innovation initiatives, as well as the divestments.

 

3


 

Breakdown of Consolidated EBITDA
(R$ million)

 

2Q19

 

2Q18

 

D

 

1Q19

 

D

 

6M19

 

6M18

 

D

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

373

 

698

 

-46.5

%

453

 

-17.6

%

825

 

1,147

 

-28.1

%

Net financial result

 

300

 

713

 

-57.9

%

375

 

-20.0

%

675

 

1,056

 

-36.1

%

Provision for income and social contribution taxes

 

252

 

(231

)

 

162

 

55.6

%

415

 

(59

)

 

Depreciation and amortization

 

527

 

457

 

15.3

%

506

 

4.2

%

1,033

 

910

 

13.5

%

EBITDA - Instruction CVM (1)

 

1,452

 

1,637

 

-11.3

%

1,496

 

-2.9

%

2,948

 

3,054

 

-3.5

%

Gains and losses on assets held for sale and sales in subsidiaries

 

 

48

 

 

 

 

 

51

 

 

Equity in earnings of unconsolidated companies

 

39

 

(24

)

 

(14

)

 

24

 

(42

)

 

Proportional EBITDA of associated companies and jointly controlled entities

 

81

 

95

 

-14.7

%

70

 

15.7

%

151

 

177

 

-14.7

%

Adjusted EBITDA(2)

 

1,572

 

1,756

 

-10.5

%

1,552

 

1.3

%

3,123

 

3,240

 

-3.6

%

Adjusted EBITDA Margin

 

15.5

%

14.6

%

 

 

15.5

%

 

 

15.5

%

14.4

%

 

 

 

 

 

CONCILIATION OF CONSOLIDATED EBITDA
(R$ million)

 

2Q19

 

2Q18

 

1Q19

 

6M19

 

6M18

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA - Instruction CVM(1)

 

1,452

 

1,637

 

1,496

 

2,948

 

3,054

 

Depreciation and amortization

 

(527

)

(457

)

(506

)

(1,033

)

(910

)

OPERATING INCOME BEFORE FINANCIAL RESULT AND TAXES(3)

 

925

 

1,180

 

990

 

1,915

 

2,144

 

 


(1)         — Non-accounting measure calculated in accordance with CVM Instruction 527.

 

(2)         — Non-accounting measure calculated by the Company. The Company presents Adjusted EBITDA to provide additional information on cash generation in the period.

 

(3)         - Accounting measure reported in the consolidated Income Statement.

 

Adjusted EBITDA decreased in 2Q19 compared to 2Q18, mainly due to the deconsolidation of assets in 2018. EBITDA margin expanded in the period, explained by the Company’s new asset portfolio and the reduction in selling, general and administrative expenses. Note that, in relation to 1Q19, EBITDA margin was stable at 15.5%, consolidating the Company’s strategy to focus on its more profitable assets.

 

EBITDA (R$ million) and EBITDA Margin (%)

 

 

4


 

Financial result and net income

 

CONSOLIDATED
(R$ million)

 

2Q19

 

2Q18

 

D

 

1Q19

 

D

 

6M19

 

6M18

 

D

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before financial income expenses and taxes(1)

 

925

 

1,180

 

-21.6

%

990

 

-6.6

%

1,915

 

2,144

 

-10.7

%

Financial Result

 

(300

)

(713

)

-57.9

%

(375

)

-20.0

%

(675

)

(1,056

)

-36.1

%

Financial income

 

48

 

34

 

41.2

%

41

 

17.1

%

89

 

65

 

36.9

%

Financial expenses

 

(353

)

(387

)

-8.8

%

(345

)

2.3

%

(698

)

(753

)

-7.3

%

Exchange variation, net (including net investment hedge)

 

27

 

(379

)

 

(48

)

 

(22

)

(392

)

-94.4

%

Exchange variation (other currencies)

 

(15

)

(9

)

64.8

%

(23

)

-34.8

%

(37

)

(3

)

1133.3

%

Gains (losses) on financial instruments, net

 

(7

)

28

 

 

 

 

(7

)

27

 

 

Income before taxes(1)

 

625

 

467

 

33.9

%

615

 

1.6

%

1,240

 

1,088

 

14.0

%

Income and social contribution taxes

 

(252

)

231

 

 

(162

)

55.6

%

(415

)

59

 

 

Exchange variation including net investment hedge

 

(42

)

374

 

 

20

 

 

(21

)

386

 

 

Other lines

 

(210

)

(143

)

46.9

%

(182

)

15.4

%

(394

)

(328

)

20.1

%

Non-recurring items

 

 

 

 

 

 

 

1

 

 

Consolidated Net Income(1)

 

373

 

698

 

-46.5

%

453

 

-17.6

%

825

 

1,147

 

-28.1

%

Non-recurring items

 

 

48

 

 

 

 

 

51

 

 

Gains and losses on assets held for sale and sales os interest in subsidiaries

 

 

48

 

 

 

 

 

51

 

 

Consolidated Adjusted Net Income(2)

 

373

 

746

 

-50.0

%

453

 

-17.6

%

825

 

1,198

 

-31.1

%

 


(1)         - Accounting measure disclosed in the consolidated Income Statement.

(2)         - Non-accounting measure calculated by the Company to show net profit adjusted by non-recurring events that influenced the result but did not produce any cash effects.

 

In 2Q19 compared to 2Q18, the variation in the financial result was basically due to the effects from exchange variation on liabilities contracted in U.S. dollar, which were practically offset by the line “Income Tax/Social Contribution — effects from exchange variation that include net investment hedge.”

 

Adjusted net income in 2Q19 decreased in relation to 2Q18, in line with EBITDA in the period.

 

Dividends

 

Gerdau S.A. approved the payment of dividends in the amount of R$ 119 million (R$ 0.07 per share) in 2Q19, which was distributed as an advance on the minimum mandatory dividend stipulated in the Bylaws.

 

Payment date: August 28, 2019

Record date: shareholding position on August 16, 2019

Ex-dividend date: August 19, 2019

 

Working Capital and Cash Conversion Cycle

 

In June 2019, the cash conversion cycle and working capital measured in days (working capital divided by daily net sales in the quarter) remained practically stable in relation to March 2019, due to the build in inventories ahead of the scheduled maintenance shutdown of Blast Furnace 1 at Ouro Branco, MG.

 

Working Capital (R$ million) and Cash Conversion Cycle (days)

 

 

5


 

Financial Liabilities

 

Debt composition
(R$ million)

 

06.30.2019

 

03.31.2019

 

06.30.2018

 

Short Term

 

1,874

 

2,939

 

2,317

 

Long Term

 

12,800

 

12,054

 

15,798

 

Gross Debt

 

14,674

 

14,993

 

18,115

 

Cash, cash equivalents and short-term investments

 

2,142

 

2,532

 

2,941

 

Net Debt

 

12,532

 

12,461

 

15,174

 

 

On June 30, 2019, gross debt was 12.8% short term and 87.2% long term. Broken down by currency, 26.2% of gross debt was denominated in Brazilian real, 72.9% in U.S. dollar and 0.9% in other currencies.

 

On June 30, 2019, 53% of cash was denominated in U.S. dollar.

 

The evolution in key debt indicators is shown below:

 

Indicators

 

06.30.2019

 

03.31.2019

 

06.30.2018

 

Gross debt / Total capitalization(1)

 

35

%

36

%

41

%

Net debt(2) (R$) / EBITDA(3) (R$)

 

1.9x

 

1.8x

 

2.7x

 

 


(1)         - Total capitalization = shareholders’ equity + gross debt - debt interest

(2)         — Net debt = gross debt — interest on debt — cash, cash equivalents and financial investments.

(3)         — Adjusted EBITDA in the last 12 months.

 

The sharp reduction in the net debt/EBITDA ratio from 2.7x on June 30, 2018 to 1.9x on June 30, 2019 is due to the funds generated by the divestment program carried out by the Company over the past few years and free cash flow generation. The program created economic value for the Company of around R$ 7 billion by focusing on deleveraging and optimizing the Company’s asset portfolio, while maintaining EBITDA at a high level.

 

Payment schedule of gross debt (non-current)

 

 

The Board of Directors’ Meeting held on April 25, 2019 approved the 16th Issue of Non-Convertible Debentures, in Two Series, with the aim of lengthening the Company’s debt maturity profile. The subscribed and paid-in amount of the Issue was R$ 1.4 billion, of which R$ 600 million was in the first series due in 4 years and R$ 800 million in the second series due in 7 years.  The net proceeds were used to strengthen the Company’s cash position to support its normal course of business.

 

The debentures are denominated in Brazilian real, not convertible into stock and have variable interest percentage of 105.5% and 107.25% of the CDI overnight rate.

 

6


 

On June 30, 2019, the nominal weighted average cost of gross debt was 6.5%, or 6.7% for the portion denominated in Brazilian real, 5.6% plus exchange variation for the portion denominated in U.S. dollar contracted by companies in Brazil and 10.2% for the portion contracted by subsidiaries abroad. On June 30, 2019, the average gross debt term was 7.1 years, with the debt maturity schedule well balanced and well distributed over the coming years.

 

Investments

 

Capital expenditure was R$ 424 million in 2Q19, with R$ 196 million allocated to general maintenance, R$ 132 million to technological expansion and modernization, and R$ 96 million to maintenance of the Ouro Branco Mill. Of the amount invested in the quarter, 49% was allocated to the Brazil BD, 27% to the North America BD, 21% to the Special Steel BD and 3% to the South America BD.

 

According to Material Fact notice dated August 7, 2019, the Company revised its investment plan for 2019, from R$ 2.2 billion to R$ 1.8 billion, given the slower recovery of the market.

 

This amount continues to be part of the CAPEX plan of R$ 7.1 billion for the three-year period (2019-2021), R$ 2.4 billion of which consists of investments in expansion and technological updating, as already announced. The investments will be made as expectations for the market’s recovery and for free cash flow generation in the period are confirmed. Accordingly, a portion of these investments that originally had been planned for 2019 was postponed to 2020 and 2021.

 

 

Free Cash Flow

 

Free cash flow generation was R$ 361 million in 2Q19, compared to R$ 86 million in 2Q18, reversing the negative trend in 1Q19.

 

7


 

Free Cash Flow 2Q19 (R$ million)

 

Free Cash Flow - Quarterly (R$ million)

 

 

PERFORMANCE BY BUSINESS DIVISION (BD)

 

The information in this report is divided into four Business Divisions (BD) in accordance with Gerdau’s corporate governance, as follows:

 

·                     Brazil BD (Brazil Business Division) — includes the operations in Brazil (except special steel) and the iron ore operation in Brazil;

 

·                     North America BD (North America Business Division) — includes all operations in North America (Canada, United States and Mexico), except special steel, as well as the jointly controlled entities and associate company, both located in Mexico;

 

·                     South America BD (South America Business Division) — includes all operations in South America (Argentina, Peru, Uruguay and Venezuela), except the operations in Brazil, and the jointly controlled entities in the Dominican Republic and Colombia;

 

·                     Special Steel BD (Special Steel Business Division) — includes the special steel operations in Brazil and the United States.

 

8


 

NET SALES

 

 

EBITDA & EBITDA MARGIN

 

 

9


 

BRAZIL BD

 

BRAZIL BD

 

2Q19

 

2Q18

 

 

1Q19

 

 

6M19

 

6M18

 

 

Volumes (1,000 tonnes)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Production of crude steel

 

1,626

 

1,381

 

17.7

%

1,419

 

14.6

%

3,045

 

2,913

 

4.5

%

Shipments of steel

 

1,343

 

1,364

 

-1.5

%

1,357

 

-1.0

%

2,701

 

2,803

 

-3.6

%

Domestic Market

 

985

 

982

 

0.3

%

939

 

4.9

%

1,924

 

1,979

 

-2.8

%

Exports

 

359

 

382

 

-6.0

%

418

 

-14.1

%

777

 

824

 

-5.7

%

Shipments of long steel

 

961

 

1,025

 

-6.2

%

1,041

 

-7.7

%

2,003

 

2,098

 

-4.5

%

Domestic Market

 

658

 

692

 

-4.9

%

641

 

2.7

%

1,299

 

1,340

 

-3.1

%

Exports

 

304

 

333

 

-8.7

%

400

 

-24.0

%

704

 

758

 

-7.1

%

Shipments of flat steel

 

382

 

339

 

12.7

%

316

 

20.9

%

698

 

705

 

-1.0

%

Domestic Market

 

327

 

290

 

12.8

%

298

 

9.7

%

625

 

639

 

-2.2

%

Exports

 

55

 

49

 

12.2

%

18

 

205.6

%

73

 

66

 

10.6

%

Results (R$ million)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales(1)

 

4,017

 

3,798

 

5.8

%

3,849

 

4.4

%

7,866

 

7,409

 

6.2

%

Domestic Market

 

3,280

 

2,931

 

11.9

%

3,010

 

9.0

%

6,290

 

5,725

 

9.9

%

Exports

 

737

 

867

 

-15.0

%

839

 

-12.2

%

1,576

 

1,684

 

-6.4

%

Cost of Goods Sold

 

(3,426

)

(3,138

)

9.2

%

(3,321

)

3.2

%

(6,747

)

(6,068

)

11.2

%

Gross profit

 

592

 

660

 

-10.3

%

528

 

12.1

%

1,119

 

1,341

 

-16.6

%

Gross margin (%)

 

14.7

%

17.4

%

 

 

13.7

%

 

 

14.2

%

18.1

%

 

 

EBITDA

 

716

 

743

 

-3.6

%

674

 

6.2

%

1,390

 

1,493

 

-6.9

%

EBITDA margin (%)

 

17.8

%

19.6

%

 

 

17.5

%

 

 

17.7

%

20.2

%

 

 

 


(1) — Includes iron ore sales.

 

Production and shipments

 

Crude steel production increased in 2Q19 compared to 2Q18, reflecting the truck drivers’ strike in Brazil and the scheduled maintenance shutdown of Blast Furnace 2 at the Ouro Branco Mill in 2Q18. In relation to 1Q19, the increase was due to the build in inventories ahead of the scheduled maintenance shutdown of Blast Furnace 1 at the Ouro Branco Mill in the second half of 2019.

 

Shipments decreased in 2Q19 in relation to 2Q18 and 1Q19, due to lower shipments to the foreign market, given the export market’s lower profitability and the building of strategic inventories ahead of the scheduled maintenance shutdown of Blast Furnace 1 at the Ouro Branco Mill. Despite the reduction in total shipments, shipments of flat steel goods in the domestic market grew in 2Q19 compared to 2Q18 and 1Q19, led by heavy plates.

 

In 2Q19, 406,000 tonnes of iron ore were sold to third parties and 1,124,000 tonnes were consumed internally. The lower shipments of iron ore in the period compared to 2Q18 (720,000 tonnes), reflecting the building of strategic inventories given the challenges faced by the mining industry in Minas Gerais state. In relation to 1Q19 (256,000 tonnes), shipments registered a significant increase, which helped to offset the effect from the costs with sourcing iron ore.

 

Operating result

 

Net sales increased in 2Q19 compared to 2Q18 and 1Q19, due to the increase in net sales per tonne sold in the domestic market, despite lower net sales in the export market influenced by lower international prices.

 

Cost of goods sold increased in 2Q19 in relation to 2Q18 and 1Q19, given the higher costs of raw materials, especially iron ore and coal.

 

Gross profit and gross margin decreased in 2Q19 compared to 2Q18, mainly due to the lower profitability in exports. Compared to 1Q19, gross profit and gross margin expanded, since the increase in net sales per tonne sold outpaced the increase in cost per tonne sold.

 

The reductions in EBITDA and EBITDA margin in 2Q19 compared to 2Q18 accompanied the reductions in gross profit and gross margin, which were partially neutralized by higher depreciation. In relation to 1Q19, EBITDA and EBITDA margin increased, following the performance of gross profit and gross margin in the period.

 

10


 

EBITDA (R$ million) and EBITDA Margin (%)

 

 

NORTH AMERICA BD

 

NORTH AMERICA BD

 

2Q19

 

2Q18

 

 

1Q19

 

 

6M19

 

6M18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Volumes (1,000 tonnes)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Production of crude steel

 

1,195

 

1,755

 

-31.9

%

1,267

 

-5.7

%

2,462

 

3,554

 

-30.7

%

Shipments of steel

 

1,066

 

1,665

 

-36.0

%

1,076

 

-0.9

%

2,142

 

3,355

 

-36.1

%

Results (R$ million)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

3,812

 

5,411

 

-29.5

%

3,842

 

-0.8

%

7,654

 

9,839

 

-22.2

%

Cost of Goods Sold

 

(3,441

)

(4,907

)

-29.9

%

(3,400

)

1.2

%

(6,841

)

(9,095

)

-24.8

%

Gross profit

 

371

 

504

 

-26.4

%

442

 

-16.1

%

813

 

744

 

9.3

%

Gross margin (%)

 

9.7

%

9.3

%

 

 

11.5

%

 

 

10.6

%

7.6

%

 

 

EBITDA

 

425

 

497

 

-14.5

%

506

 

-16.0

%

932

 

745

 

25.1

%

EBITDA margin (%)

 

11.1

%

9.2

%

 

 

13.2

%

 

 

12.2

%

7.6

%

 

 

 

Production and shipments

 

Production and shipments in 2Q19 decreased in relation to 2Q18, reflecting the divestment of most of the rebar units in the United States. In relation to 1Q19, production decreased due to lower shipments influenced by the drawdown in inventories in the chain. Our key markets, however, remain healthy at historically high levels.

 

Operating result

 

Net sales, cost of goods sold and gross profit decreased in 2Q19 in relation to 2Q18, given the aforementioned divestments.

 

Gross profit and gross margin decreased in 2Q19 compared to 1Q19, but remained at high levels. The decreases were due to the decrease in the metal spread, with the reduction in steel prices outstripping the reduction in scrap prices.

 

The reduction in EBITDA in 2Q19 compared to 2Q18 lagged the reduction in selling, general and administrative expenses in the period. On the other hand, EBITDA margin expanded, reflecting the Division’s new asset portfolio marked by more profitable assets. In relation to 1Q19, EBITDA also decreased, accompanying the decrease in gross profit in the period, but with EBITDA margin remaining at a high level.

 

11


 

EBITDA (R$ million) and EBITDA Margin (%)

 

 

SOUTH AMERICA BD

 

SOUTH AMERICA BD

 

2Q19

 

2Q18

 

 

1Q19

 

 

6M19

 

6M18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Volumes (1,000 tonnes)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Production of crude steel

 

156

 

216

 

-27.8

%

139

 

12.6

%

295

 

459

 

-35.7

%

Shipments of steel

 

262

 

386

 

-32.1

%

244

 

7.4

%

506

 

761

 

-33.5

%

Results (R$ million)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

840

 

1,108

 

-24.2

%

739

 

13.7

%

1,580

 

2,075

 

-23.9

%

Cost of Goods Sold

 

(719

)

(957

)

-24.9

%

(629

)

14.3

%

(1,349

)

(1,767

)

-23.7

%

Gross profit

 

121

 

151

 

-19.9

%

110

 

10.0

%

231

 

308

 

-25.0

%

Gross margin (%)

 

14.4

%

13.6

%

 

 

14.9

%

 

 

14.6

%

14.8

%

 

 

EBITDA

 

168

 

179

 

-6.1

%

157

 

7.0

%

326

 

366

 

-10.9

%

EBITDA margin (%)

 

20.0

%

16.2

%

 

 

21.2

%

 

 

20.6

%

17.6

%

 

 

 

Production and shipments

 

Production and shipments of crude steel decreased in 2Q19 compared to 2Q18, influenced primarily by the deconsolidation of Chile. In relation to 1Q19, production and shipments of crude steel increased, mainly due to the higher demand for long steel in Argentina.

 

Operating result

 

Net sales and cost of goods sold decreased in 2Q19 compared to 2Q18, mainly due to the deconsolidation of Chile. Compared to 1Q19, net sales increased, driven by the higher net sales per tonne sold in all countries. Meanwhile, cost of goods sold increased, due to the higher cost per tonne sold.

 

Gross profit decreased in 2Q19 in relation to 2Q18, due to the deconsolidation of Chile, but increased in relation to 1Q19, reflecting the higher net sales in the period.

 

EBITDA in 2Q19 accompanied the performance of gross profit in relation to 2Q18 and 1Q19.

 

12


 

EBITDA (R$ million) and EBITDA Margin (%)

 

 

SPECIAL STEEL BD

 

SPECIAL STEEL BD

 

2Q19

 

2Q18

 

 

1Q19

 

 

6M19

 

6M18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Volumes (1,000 tonnes)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Production of crude steel

 

448

 

637

 

-29.7

%

518

 

-13.5

%

967

 

1,228

 

-21.3

%

Shipments of steel

 

426

 

569

 

-25.1

%

430

 

-0.9

%

857

 

1,083

 

-20.9

%

Results (R$ million)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

1,844

 

2,133

 

-13.5

%

1,840

 

0.2

%

3,684

 

3,865

 

-4.7

%

Cost of Goods Sold

 

(1,670

)

(1,807

)

-7.6

%

(1,649

)

1.3

%

(3,319

)

(3,274

)

1.4

%

Gross profit

 

174

 

326

 

-46.6

%

191

 

-8.9

%

366

 

591

 

-38.1

%

Gross margin (%)

 

9.4

%

15.3

%

 

 

10.4

%

 

 

9.9

%

15.3

%

 

 

EBITDA

 

241

 

386

 

-37.6

%

238

 

1.3

%

479

 

700

 

-31.6

%

EBITDA margin (%)

 

13.1

%

18.1

%

 

 

12.9

%

 

 

13.0

%

18.1

%

 

 

 

Production and shipments

 

Crude steel production and shipments decreased in 2Q19 compared to 2Q18, influenced by the deconsolidation of India and the lower production and shipments in Brazil and the United States. In Brazil, vehicle production and shipments increased, despite the slowdown in vehicle production growth influenced by lower exports to Argentina, which is the country’s main client. In the United States, the decline in shipments was due mainly to the drawdown in inventories in the distribution chain.

 

In relation to 1Q19, crude steel production decreased due to higher inventories in the auto industry chain in Brazil, which led to the temporary shutdown (lay-off) of the unit in Mogi das Cruzes, SP. On the other hand, shipments remained stable, reflecting the recovery of shipments in Brazil, despite the lower vehicle exports to Argentina, given that country’s financial crisis, which was partially offset by the lower shipments in the United States.

 

Operating result

 

Despite the increase in net sales per tonne sold in Brazil and the United States in 2Q19 compared to 2Q18, the reduction in net sales is mainly due to the deconsolidation of India.

 

Cost of goods sold decreased in 2Q19 in relation to 2Q18, due to the deconsolidation of India, despite the increase in cost per tonne sold in Brazil and the United States.

 

13


 

Gross profit and gross margin decreased in 2Q19 compared to 2Q18, since the increase in costs per tonne sold surpassed the increase in net sales per tonne sold, due to the strong pressure from the costs of inputs in general.

 

The performance of EBITDA and EBITDA margin in 2Q19 in relation to 2Q18 accompanied the performance of gross profit and gross margin. In relation to 1Q19, EBITDA and EBITDA margin remained stable, with the stronger performance in Brazil offsetting the weaker performance in the United States.

 

EBITDA (R$ million) and EBITDA Margin (%)

 

 

THE MANAGEMENT

 

This document contains forward-looking statements. These statements are based on estimates, information or methods that may be incorrect or inaccurate and that may not occur. These estimates are also subject to risks, uncertainties and assumptions that include, among other factors: general economic, political and commercial conditions in Brazil and in the markets where we operate, as well as existing and future government regulations. Potential investors are cautioned that these forward-looking statements do not constitute guarantees of future performance, given that they involve risks and uncertainties. Gerdau does not undertake and expressly waives any obligation to update any of these forward-looking statements, which are valid only on the date on which they were made.

 

14


 

GERDAU S.A.

CONSOLIDATED BALANCE SHEETS

In thousands of Brazilian reais (R$)

 

 

 

June 30, 2019

 

December 31, 2018

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Cash and cash equivalents

 

1,750,857

 

2,890,144

 

Short-term investments

 

390,607

 

459,470

 

Trade accounts receivable - net

 

3,732,421

 

3,201,656

 

Inventories

 

9,531,907

 

9,167,689

 

Tax credits

 

543,423

 

527,428

 

Income and social contribution taxes recoverable

 

375,619

 

445,561

 

Unrealized gains on financial instruments

 

 

30,711

 

Other current assets

 

571,023

 

780,423

 

 

 

16,895,857

 

17,503,082

 

 

 

 

 

 

 

NON-CURRENT ASSETS

 

 

 

 

 

Tax credits

 

42,660

 

32,065

 

Deferred income taxes

 

3,627,519

 

3,874,054

 

Unrealized gains on financial instruments

 

3,086

 

2,706

 

Related parties

 

63,126

 

27,939

 

Judicial deposits

 

2,181,223

 

2,135,414

 

Other non-current assets

 

466,462

 

449,592

 

Prepaid pension cost

 

51,902

 

17,952

 

Advance for future investment in joint venture

 

91,973

 

375,456

 

Investments in associates and joint ventures

 

1,695,371

 

1,367,802

 

Goodwill

 

9,020,556

 

9,112,390

 

Leasing

 

727,742

 

 

Other Intangibles

 

727,827

 

836,096

 

Property, plant and equipment, net

 

15,529,952

 

15,546,481

 

 

 

34,229,399

 

33,777,947

 

TOTAL ASSETS

 

51,125,256

 

51,281,029

 

 

15


 

GERDAU S.A.

CONSOLIDATED BALANCE SHEETS

In thousands of Brazilian reais (R$)

 

 

 

June 30, 2019

 

December 31, 2018

 

CURRENT LIABILITIES

 

 

 

 

 

Trade accounts payable

 

3,832,809

 

4,335,054

 

Short-term debt

 

1,851,194

 

1,822,183

 

Debentures

 

22,716

 

2,755

 

Taxes payable

 

407,905

 

351,545

 

Income and social contribution taxes payable

 

138,517

 

395,682

 

Payroll and related liabilities

 

482,219

 

588,627

 

Dividends payable

 

 

169,616

 

Leasing payable

 

219,466

 

 

Employee benefits

 

578

 

157

 

Environmental liabilities

 

60,973

 

60,419

 

Unrealized losses on financial instruments

 

3,061

 

5,245

 

Other current liabilities

 

695,792

 

772,970

 

 

 

7,715,230

 

8,504,253

 

 

 

 

 

 

 

NON-CURRENT LIABILITIES

 

 

 

 

 

Long-term debt

 

9,883,028

 

11,545,658

 

Debentures

 

2,916,947

 

1,536,118

 

Related parties

 

5,198

 

1,350

 

Deferred income taxes

 

61,015

 

118,368

 

Provision for tax, civil and labor liabilities

 

695,470

 

770,305

 

Environmental liabilities

 

61,394

 

72,228

 

Employee benefits

 

1,260,820

 

1,356,560

 

Obligations with FIDC

 

978,642

 

938,526

 

Leasing payable

 

517,949

 

 

Other non-current liabilities

 

461,118

 

499,092

 

 

 

16,841,581

 

16,838,205

 

EQUITY

 

 

 

 

 

Capital

 

19,249,181

 

19,249,181

 

Treasury stocks

 

(260,529

)

(280,426

)

Capital reserves

 

11,597

 

11,597

 

Retained earnings

 

5,502,202

 

4,806,089

 

Operations with non-controlling interests

 

(2,870,825

)

(2,870,825

)

Other reserves

 

4,733,425

 

4,814,988

 

EQUITY ATTRIBUTABLE TO THE EQUITY HOLDERS OF THE PARENT

 

26,365,051

 

25,730,604

 

 

 

 

 

 

 

NON-CONTROLLING INTERESTS

 

203,394

 

207,967

 

 

 

 

 

 

 

EQUITY

 

26,568,445

 

25,938,571

 

 

 

 

 

 

 

TOTAL LIABILITIES AND EQUITY

 

51,125,256

 

51,281,029

 

 

16


 

GERDAU S.A.

CONSOLIDATED STATEMENTS OF INCOME

In thousands of Brazilian reais (R$)

 

 

 

For the three-month period ended

 

For the six-month period ended

 

 

 

June 30, 2019

 

June 30, 2018

 

June 30, 2019

 

June 30, 2018

 

 

 

 

 

 

 

 

 

 

 

NET SALES

 

10,154,053

 

12,035,355

 

20,179,714

 

22,424,155

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

(8,881,496

)

(10,390,656

)

(17,638,146

)

(19,440,356

)

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

1,272,557

 

1,644,699

 

2,541,568

 

2,983,799

 

 

 

 

 

 

 

 

 

 

 

Selling expenses

 

(120,131

)

(141,328

)

(242,768

)

(287,665

)

Impairment loss on trade receivables

 

(1,971

)

(16,237

)

(7,978

)

(20,335

)

General and administrative expenses

 

(231,833

)

(273,382

)

(470,501

)

(543,378

)

Other operating income

 

59,321

 

40,849

 

147,841

 

89,706

 

Other operating expenses

 

(14,219

)

(50,382

)

(28,663

)

(68,639

)

Gains and losses on assets held for sale and sales os interest in subsidiaries

 

 

(47,824

)

 

(51,321

)

Equity in earnings of unconsolidated companies

 

(38,587

)

23,777

 

(24,359

)

41,526

 

 

 

 

 

 

 

 

 

 

 

INCOME BEFORE FINANCIAL INCOME (EXPENSES) AND TAXES

 

925,137

 

1,180,172

 

1,915,140

 

2,143,693

 

 

 

 

 

 

 

 

 

 

 

Financial income

 

47,756

 

33,969

 

88,773

 

65,286

 

Financial expenses

 

(352,901

)

(387,264

)

(698,274

)

(753,295

)

Exchange variations, net

 

12,052

 

(388,210

)

(58,404

)

(395,273

)

Gain and losses on financial instruments, net

 

(7,173

)

27,842

 

(7,094

)

27,055

 

 

 

 

 

 

 

 

 

 

 

INCOME BEFORE TAXES

 

624,871

 

466,509

 

1,240,141

 

1,087,466

 

 

 

 

 

 

 

 

 

 

 

Current

 

(105,467

)

(152,269

)

(231,073

)

(300,444

)

Deferred

 

(146,653

)

384,049

 

(183,691

)

359,678

 

Income and social contribution taxes

 

(252,120

)

231,780

 

(414,764

)

59,234

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

372,751

 

698,289

 

825,377

 

1,146,700

 

 

 

 

 

 

 

 

 

 

 

(+) Gains and losses on assets held for sale and sales of interest in subsidiaries

 

 

47,824

 

 

51,321

 

 

 

 

47,824

 

 

51,321

 

 

 

 

 

 

 

 

 

 

 

ADJUSTED NET INCOME*

 

372,751

 

746,113

 

825,377

 

1,198,021

 

 


* Adjusted net income is a non-accounting indicator prepared by the Company, reconciled with the financial statements and consists of net income adjusted by extraordinary events that influenced the net income, without cash effect.

 

17


 

GERDAU S.A.

CONSOLIDATED STATEMENTS OF CASH FLOWS

In thousands of Brazilian reais (R$)

 

 

 

For the three-month period ended

 

For the six-month period ended

 

 

 

June 30, 2019

 

June 30, 2018

 

June 30, 2019

 

June 30, 2018

 

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

Net income for the period

 

372,751

 

698,289

 

825,377

 

1,146,700

 

Adjustments to reconcile net income for the period to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

526,838

 

456,545

 

1,032,637

 

910,061

 

Equity in earnings of unconsolidated companies

 

38,587

 

(23,777

)

24,359

 

(41,526

)

Exchange variation, net

 

(12,052

)

388,210

 

58,404

 

395,273

 

Loss (Gains) on financial instruments, net

 

7,173

 

(27,842

)

7,094

 

(27,055

)

Post-employment benefits

 

35,216

 

45,179

 

81,636

 

93,147

 

Stock based compensation

 

9,330

 

11,784

 

19,714

 

21,036

 

Income tax

 

252,120

 

(231,780

)

414,764

 

(59,234

)

Gains on disposal of property, plant and equipment, net

 

7,141

 

(34,870

)

(836

)

(40,534

)

Gains and losses on assets held for sale and sales os interest in subsidiaries

 

 

47,824

 

 

51,321

 

Impairment loss on trade receivables

 

1,971

 

16,137

 

7,978

 

20,235

 

Provision for tax, labor and civil claims

 

(3,418

)

(4,685

)

(74,805

)

(40,720

)

Interest income on short-term investments

 

(11,979

)

(10,550

)

(28,721

)

(20,715

)

Interest expense on debt and debentures

 

256,599

 

296,403

 

506,559

 

570,244

 

Interest on loans with related parties

 

(1,276

)

(87

)

(1,841

)

(91

)

Provision for net realizable value adjustment in inventory, net

 

4,464

 

3,264

 

4,036

 

2,421

 

 

 

1,483,465

 

1,630,044

 

2,876,355

 

2,980,563

 

Changes in assets and liabilities

 

 

 

 

 

 

 

 

 

Decrease (Increase) in trade accounts receivable

 

221,690

 

(153,897

)

(521,804

)

(1,040,329

)

Increase in inventories

 

(214,590

)

(1,055,974

)

(416,761

)

(1,462,671

)

(Decrease) Increase in trade accounts payable

 

(295,202

)

253,828

 

(582,198

)

632,309

 

Decrease (Increase) in other receivables

 

1,998

 

1,906

 

(39,418

)

(30,183

)

Decrease in other payables

 

(339,693

)

(151,578

)

(465,863

)

(432,894

)

Dividends from associates and joint ventures

 

7,773

 

6,219

 

10,933

 

11,562

 

Purchases of trading securities

 

(131,625

)

(307,754

)

(424,016

)

(482,677

)

Proceeds from maturities and sales of trading securities

 

342,487

 

655,322

 

500,068

 

796,848

 

Cash provided by operating activities

 

1,076,303

 

878,116

 

937,296

 

972,528

 

 

 

 

 

 

 

 

 

 

 

Interest paid on loans and financing

 

(351,657

)

(331,178

)

(523,667

)

(566,434

)

Income and social contribution taxes paid

 

(159,491

)

(93,853

)

(183,896

)

(157,066

)

Net cash provided by operating activities

 

565,155

 

453,085

 

229,733

 

249,028

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

Purchases of property, plant and equipment

 

(423,741

)

(299,147

)

(728,273

)

(515,803

)

Proceeds from sales of property, plant and equipment, investments and other intangibles

 

5,497

 

594,656

 

19,314

 

927,066

 

Purchases of other intangibles

 

(26,025

)

(9,501

)

(35,088

)

(13,965

)

Advance for future investment in joint venture

 

(94,687

)

 

(94,687

)

 

Net cash (used in) provided by investing activities

 

(538,956

)

286,008

 

(838,734

)

397,298

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

Purchases of Treasury stocks

 

 

 

 

(149,711

)

Dividends and interest on capital paid

 

(131,204

)

(116,573

)

(297,624

)

(171,723

)

Proceeds from loans and financing

 

1,670,759

 

414,356

 

1,882,008

 

893,506

 

Repayment of loans and financing

 

(1,715,922

)

(1,035,119

)

(1,956,462

)

(1,345,884

)

Leasing payment

 

(55,722

)

 

(108,747

)

 

Intercompany loans, net

 

13,060

 

2,838

 

(29,498

)

10,542

 

Net cash used in financing activities

 

(219,029

)

(734,498

)

(510,323

)

(763,270

)

 

 

 

 

 

 

 

 

 

 

Exchange variation on cash and cash equivalents

 

1,923

 

257,649

 

(19,963

)

199,297

 

 

 

 

 

 

 

 

 

 

 

(Decrease) Increase in cash and cash equivalents

 

(190,907

)

262,244

 

(1,139,287

)

82,353

 

Cash and cash equivalents at beginning of period

 

1,941,764

 

2,375,447

 

2,890,144

 

2,555,338

 

Cash and cash equivalents at end of period

 

1,750,857

 

2,637,691

 

1,750,857

 

2,637,691

 

 

18


 

APPENDIX — PRO FORMA

 

To present the results of the business divisions excluding the effects from the divestment program, the pro forma Business Division and Consolidated results for 2018 follow:

 

Brazil BD - Pro forma

 

1Q18

 

2Q18

 

3Q18

 

4Q18

 

2018

 

Volumes (1,000 tonnes)

 

 

 

 

 

 

 

 

 

 

 

Production of crude steel

 

1,532

 

1,381

 

1,479

 

1,454

 

5,846

 

Shipments of steel

 

1,438

 

1,364

 

1,422

 

1,311

 

5,535

 

Results (R$ million)

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

3,611

 

3,798

 

4,390

 

3,946

 

15,745

 

Cost of Goods Sold

 

(2,929

)

(3,139

)

(3,602

)

(3,374

)

(13,044

)

Gross profit

 

682

 

659

 

788

 

571

 

2,700

 

Gross margin (%)

 

18.9

%

17.4

%

17.9

%

14.5

%

17.2

%

Adjusted EBITDA

 

751

 

743

 

891

 

647

 

3,032

 

Adjusted EBITDA Margin

 

20.8

%

19.6

%

20.3

%

16.4

%

19.3

%

 

North America BD - Pro forma

 

1Q18

 

2Q18

 

3Q18

 

4Q18

 

2018

 

Volumes (1,000 tonnes)

 

 

 

 

 

 

 

 

 

 

 

Production of crude steel

 

1,328

 

1,297

 

1,221

 

1,008

 

4,854

 

Shipments of steel

 

1,061

 

1,125

 

1,027

 

1,003

 

4,216

 

Results (R$ million)

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

2,933

 

3,818

 

4,030

 

3,705

 

14,486

 

Cost of Goods Sold

 

(2,693

)

(3,376

)

(3,516

)

(3,325

)

(12,910

)

Gross profit

 

240

 

442

 

514

 

380

 

1,576

 

Gross margin (%)

 

8.2

%

11.6

%

12.8

%

10.3

%

10.9

%

Adjusted EBITDA

 

239

 

437

 

522

 

406

 

1,604

 

Adjusted EBITDA Margin

 

8.1

%

11.4

%

13.0

%

11.0

%

11.1

%

 

South America BD - Pro forma

 

1Q18

 

2Q18

 

3Q18

 

4Q18

 

2018

 

Volumes (1,000 tonnes)

 

 

 

 

 

 

 

 

 

 

 

Production of crude steel

 

146

 

169

 

142

 

144

 

601

 

Shipments of steel

 

262

 

275

 

284

 

262

 

1,083

 

Results (R$ million)

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

691

 

808

 

907

 

819

 

3,225

 

Cost of Goods Sold

 

(583

)

(667

)

(762

)

(701

)

(2,713

)

Gross profit

 

108

 

141

 

145

 

118

 

512

 

Gross margin (%)

 

15.6

%

17.5

%

16.0

%

14.4

%

15.9

%

Adjusted EBITDA

 

154

 

174

 

185

 

128

 

641

 

Adjusted EBITDA Margin

 

22.3

%

21.5

%

20.4

%

15.6

%

19.9

%

 

Special Steel BD - Pro forma

 

1Q18

 

2Q18

 

3Q18

 

4Q18

 

2018

 

Volumes (1,000 tonnes)

 

 

 

 

 

 

 

 

 

 

 

Production of crude steel

 

522

 

568

 

578

 

444

 

2,112

 

Shipments of steel

 

445

 

502

 

494

 

474

 

1,915

 

Results (R$ million)

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

1,557

 

1,931

 

2,116

 

1,989

 

7,593

 

Cost of Goods Sold

 

(1,321

)

(1,633

)

(1,819

)

(1,814

)

(6,587

)

Gross profit

 

236

 

298

 

297

 

175

 

1,006

 

Gross margin (%)

 

15.2

%

15.4

%

14.0

%

8.8

%

13.2

%

Adjusted EBITDA

 

283

 

351

 

342

 

226

 

1,202

 

Adjusted EBITDA Margin

 

18.2

%

18.2

%

16.2

%

11.4

%

15.8

%

 

19


 

Consolidated - Pro forma

 

1Q18

 

2Q18

 

3Q18

 

4Q18

 

2018

 

Volumes (1,000 tonnes)

 

 

 

 

 

 

 

 

 

 

 

Production of crude steel

 

3,527

 

3,412

 

3,421

 

3,051

 

13,411

 

Shipments of steel

 

3,060

 

3,117

 

3,124

 

2,971

 

12,272

 

Results (R$ million)

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

8,443

 

9,937

 

10,927

 

10,270

 

39,577

 

Cost of Goods Sold

 

(7,167

)

(8,397

)

(9,177

)

(9,006

)

(33,747