G E R D A U S.A. Condensed cons o l i d a t e d i n t e r i m fi n a n c i a l s t a t e m e n t s a s o f J u n e 3 0, 2 0 2 4 E x h i b i t 9 9.1 GERDAU S.A. CONSOLIDATED BALANCE SHEETS In thousands of Brazilian reais (R$) (Unaudited) | | Note | June 30, 2024 | December 31, 2023 | | --- | --- | --- | --- | | CURRENT ASSETS | | | | | Cash and cash equivalents | 4 | 4,889,466 | 3,005,645 | | Short-term investments | 4 | 1,749,547 | 2,338,097 | | Trade accounts receivable | 5 | 5,875,819 | 4,875,394 | | Inve ...

Gerdau (GGB) has been beaten down lately with too much selling pressure. While the stock has lost 19.7% over the past four weeks, there is light at the end of the tunnel as it is now in oversold territory and Wall Street analysts expect the company to report better earnings than they predicted earlier. reverse soon for reaching the old equilibrium of supply and demand. We use Relative Strength Index (RSI), one of the most commonly used technical indicators, for spotting whether a stock is oversold. This is ...

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today. Investors should also recognize that GGB has a P/B ratio of 0.65. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total l ...

Group 1 - Gerdau S.A (GGB) is experiencing significant activity in the options market, particularly with the Jun 21, 2024 $2.00 Call showing high implied volatility, indicating potential for a major price movement [1] - Implied volatility reflects market expectations for future stock movement, suggesting that investors anticipate a significant event that could lead to a rally or sell-off [2] - Gerdau holds a Zacks Rank 1 (Strong Buy) in the Internet-Software industry, which is in the top 28% of the Zacks Industry Rank, with recent earnings estimates for the current quarter increasing from 34 cents to 35 cents per share [3] Group 2 - The high implied volatility for Gerdau may indicate a developing trading opportunity, as options traders often seek to sell premium on such options to capture decay, hoping the stock does not move as much as expected [4]

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies. Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely o ...

[Condensed Consolidated Interim Financial Statements](index=1&type=section&id=Condensed%20consolidated%20interim%20financial%20statements) [Consolidated Balance Sheets](index=2&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2024, total assets increased to R$77.0 billion, total liabilities remained stable, and total equity grew to R$52.1 billion Consolidated Balance Sheet Summary (in thousands of BRL) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total Current Assets** | 29,742,522 | 29,197,937 | | **Total Non-Current Assets** | 47,218,547 | 45,687,207 | | **Total Assets** | **76,961,069** | **74,885,144** | | **Total Current Liabilities** | 10,642,354 | 11,284,612 | | **Total Non-Current Liabilities** | 14,207,772 | 14,361,669 | | **Total Liabilities** | **24,850,126** | **25,646,281** | | **Total Equity** | **52,110,943** | **49,238,863** | | **Total Liabilities and Equity** | **76,961,069** | **74,885,144** | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Q1 2024 net sales decreased to R$16.2 billion and net income fell to R$2.05 billion, despite a significant gain from joint venture operations Q1 2024 vs Q1 2023 Income Statement (in thousands of BRL) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Net Sales** | 16,210,263 | 18,872,303 | | **Gross Profit** | 2,419,719 | 3,628,675 | | **Income Before Taxes** | 2,276,565 | 4,242,342 | | **Net Income** | **2,052,872** | **3,215,399** | | **Net Income Attributable to Owners** | 2,043,782 | 3,205,919 | | **Basic Earnings Per Share (R$)** | 0.97 | 1.53 | - The company recognized a gain of **R$808.4 million** from the sale of joint venture interests in Q1 2024, which significantly contributed to income before taxes[4](index=4&type=chunk)[29](index=29&type=chunk) [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Total comprehensive income for Q1 2024 increased to R$3.03 billion, primarily due to a significant positive cumulative translation adjustment Q1 2024 vs Q1 2023 Comprehensive Income (in thousands of BRL) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Net income for the period** | 2,052,872 | 3,215,399 | | **Cumulative translation adjustment** | 1,330,696 | (701,478) | | **Recycling of cumulative translation adjustment** | (407,560) | - | | **Total comprehensive income for the period** | **3,029,923** | **2,818,013** | [Consolidated Statements of Changes in Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) Total equity increased from R$49.2 billion to R$52.1 billion by March 31, 2024, driven by net income and other comprehensive income Changes in Equity for Q1 2024 (in thousands of BRL) | Description | Amount | | :--- | :--- | | **Balance as of January 1, 2024** | **49,238,863** | | Net Income | 2,052,872 | | Other comprehensive income (loss) | 977,051 | | Dividends/interest on equity | (175,409) | | Other changes | 18,566 | | **Balance as of March 31, 2024** | **52,110,943** | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Q1 2024 net cash from operating activities decreased to R$831.3 million, with investing activities providing R$362.6 million, increasing cash by R$737.5 million Q1 2024 vs Q1 2023 Cash Flows (in thousands of BRL) | Cash Flow Category | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | **831,290** | **1,963,686** | | **Net cash provided (used) in investing activities** | **362,635** | **(1,073,172)** | | **Net cash used in financing activities** | **(516,069)** | **(719,399)** | | **Increase in cash and cash equivalents** | 737,478 | 106,019 | | **Cash and cash equivalents at end of period** | 3,743,123 | 2,581,882 | [Notes to the Condensed Consolidated Interim Financial Statements](index=8&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [Note 3: Condensed Consolidated Interim Financial Statements](index=9&type=section&id=NOTE%203%20%E2%80%93%20CONDENSED%20CONSOLIDATED%20INTERIM%20FINANCIAL%20STATEMENTS) This note details the Q1 2024 sale of joint venture interests for US$325 million, generating a R$808.4 million gain, and outlines remaining equity method investments - On January 17, 2024, the company sold its interests in joint ventures Diaco S.A. (49.85%) and Gerdau Metaldom Corp (50.00%) to its partner, the INICIA Group, for **US$325 million**[29](index=29&type=chunk) - The sale of these joint ventures resulted in a recognized gain of **R$808.4 million**, which includes **R$407.6 million** reclassified from the cumulative translation adjustment[29](index=29&type=chunk) [Note 12: Loans and Financing](index=15&type=section&id=NOTE%2012%20%E2%80%93%20LOANS%20AND%20FINANCING) As of March 31, 2024, total loans and financing were R$10.2 billion, primarily in US Dollars, with an unused US$875 million global credit line Total Loans and Financing (in thousands of BRL) | Category | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total Financing** | **10,203,785** | **10,079,675** | | Current | 1,673,459 | 1,783,201 | | Non-current | 8,530,326 | 8,296,474 | Financing by Currency (in thousands of BRL) | Currency | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Brazilian Real (R$) | 2,547,023 | 2,667,065 | | U.S. Dollar (US$) | 7,377,563 | 7,169,183 | | Other currencies | 279,199 | 243,427 | - The company has a **US$875 million** global credit line maturing in September 2027, which was entirely unused as of March 31, 2024[52](index=52&type=chunk) [Note 14: Financial Instruments](index=17&type=section&id=NOTE%2014%20-%20FINANCIAL%20INSTRUMENTS) This note outlines the company's financial risk management, derivative use for hedging, and capital management policy, including a US$0.4 billion net investment hedge - The company's capital management risk policy targets a Net Debt/EBITDA ratio of less than or equal to **1.5 times** and an average debt maturity of more than **6 years**[64](index=64&type=chunk) Derivative Instruments Fair Value (in thousands of BRL) | Contract Type | Notional Value (Mar 31, 2024) | Fair Value - Asset (Mar 31, 2024) | Fair Value - Liability (Mar 31, 2024) | | :--- | :--- | :--- | :--- | | Currency forward contracts | US$ 8.2 million | - | 15,759 | | Commodity contracts | US$ 14.4 million | 35,370 | 8,325 | | Swaps IPCA x DI | R$ 300.0 million | 1,669 | - | | Swaps USD x DI | US$ 150.4 million | 1,433 | - | | **Total Fair Value** | | **38,472** | **24,084** | - The company hedges part of its net investments in foreign subsidiaries using **US$0.4 billion** of its Ten Years Bonds[86](index=86&type=chunk) [Note 15: Tax, Civil and Labor Claims and Contingent Assets](index=23&type=section&id=NOTE%2015%20%E2%80%93%20TAX%2C%20CIVIL%20AND%20LABOR%20CLAIMS%20AND%20CONTINGENT%20ASSETS) The company has R$2.22 billion in provisions for probable claims and discloses significant contingent liabilities, including R$7.8 billion in tax disputes Provisions for Claims (in thousands of BRL) | Provision Type | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Tax provisions | 1,783,884 | 1,737,984 | | Labor provisions | 408,812 | 413,179 | | Civil provisions | 31,783 | 34,662 | | **Total** | **2,224,479** | **2,185,825** | - The company has significant contingent liabilities (possible loss) related to the disallowance of goodwill amortization from a 2004/2005 corporate restructuring, with assessments totaling **R$7.8 billion**[105](index=105&type=chunk) - Judicial deposits related to the inclusion of ICMS in the PIS/COFINS tax base amount to **R$1.7 billion**[119](index=119&type=chunk)[128](index=128&type=chunk) [Note 17: Equity](index=31&type=section&id=NOTE%2017%20%E2%80%93%20EQUITY) As of March 31, 2024, the company's capital was R$20.2 billion, with Metalúrgica Gerdau S.A. holding 97.5% of common shares Share Ownership as of March 31, 2024 | Shareholder Group | Common % | Preferred % | Total % | | :--- | :--- | :--- | :--- | | Metalúrgica Gerdau S.A. | 97.5% | - | 33.3% | | Brazilian institutional investors | 0.3% | 15.3% | 10.2% | | Foreign institutional investors | 0.2% | 41.9% | 27.6% | | Other shareholders | 2.0% | 42.4% | 28.7% | | Treasury stock | - | 0.4% | 0.2% | - In February 2023, the company executed a capital increase by capitalizing **R$966 million** from retained earnings, issuing new shares as a bonus to shareholders in a **1-for-20 ratio**[147](index=147&type=chunk) [Note 18: Earnings Per Share (EPS)](index=32&type=section&id=NOTE%2018%20%E2%80%93%20EARNINGS%20PER%20SHARE%20%28EPS%29) Q1 2024 basic and diluted EPS were R$0.97, a decrease from R$1.53 in Q1 2023, reflecting lower net income Earnings Per Share (in BRL) | EPS Type | Q1 2024 | Q1 2023* | | :--- | :--- | :--- | | Basic EPS (Common & Preferred) | 0.97 | 1.53 | | Diluted EPS (Common & Preferred) | 0.97 | 1.52 | [Note 22: Segment Reporting](index=35&type=section&id=NOTE%2022%3A%20Segment%20Reporting) The company operates four segments, with North America leading Q1 2024 net sales (R$6.4 billion) and operating income (R$1.3 billion) Q1 2024 Net Sales and Operating Income by Segment (in thousands of BRL) | Business Segment | Net Sales | Operating Income (before financial & taxes) | | :--- | :--- | :--- | | Brazil Operation | 6,435,355 | 195,565 | | North America Operation | 6,415,886 | 1,310,143 | | South America Operation | 1,190,598 | 227,466 | | Special Steels Operation | 2,608,409 | 310,036 | Total Assets by Segment (in thousands of BRL) | Business Segment | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Brazil Operation | 23,983,159 | 23,788,261 | | North America Operation | 25,243,002 | 22,589,796 | | South America Operation | 4,968,970 | 4,428,996 | | Special Steels Operation | 11,810,089 | 11,885,419 | [Note 24: Subsequent Events](index=37&type=section&id=NOTE%2024%20-%20SUBSEQUENT%20EVENTS) Subsequent events include a R$4.06 billion capital increase, a R$589.0 million dividend approval, and a new R$1.5 billion debenture issuance - In April 2024, a capital increase of **R$4.06 billion** was approved via capitalization of retained earnings, with a bonus share issuance of one new share for every five held[174](index=174&type=chunk) - A dividend of **R$589.0 million** (**R$0.28 per share**) was approved on May 2, 2024, for payment on May 27, 2024[175](index=175&type=chunk) - On May 2, 2024, the Board approved a new 5-year, **R$1.5 billion** debenture issuance with a yield of 100% of the CDI rate plus a spread up to 0.60% per year[176](index=176&type=chunk)

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Momentum investing is essentially the opposite of the tried-and-tested Wall Street adage -- "buy low and sell high." Investors following this investing style typically avoid betting on cheap stocks and waiting long for them to recover. They believe instead that one could make far more money in lesser time by "buying high and selling higher."Everyone likes betting on fast-moving trending stocks, but it isn't easy to determine the right entry point. These stocks often lose momentum when their future growth po ...

Steel Production and Market Dynamics - In 2023, steel imports in Brazil reached 5 million tonnes, a 50% increase compared to 2022, marking the highest level since 2010, which negatively impacted Gerdau's results[43]. - The Ouro Branco mill accounted for 61.7% of the total crude steel output in the Brazil Business Segment in 2023, highlighting its significance in production capacity[49]. - In 2022, Brazil produced 34.1 million tonnes of crude steel, holding a 1.8% share of the global market and 77.4% of South America's total steel production[139]. - In 2023, Brazilian steel product sales reached 31 million tonnes, with flat steel products accounting for 69.5% of total sales[140]. - The Brazilian GDP increased by 2.9% in 2023, while steel consumption surged by 18.5%[142]. - Brazilian steel exports totaled 11.7 million tonnes in 2023, representing 37.2% of total sales[144]. - The apparent consumption of hot-rolled steel products globally saw a slight increase of 0.7% year-on-year, with a 1.7% increase excluding China[190]. - Gerdau's exports to South America accounted for 44% of total exports in 2023, while Central America represented 43%[191]. - The Brazilian steel market has seen a 25% import penetration rate as of December 2023, significantly higher than the average of the last ten years, impacting local competitiveness[221]. Financial Performance and Challenges - Gerdau's total consolidated net sales for 2023 were R$ 68.9 billion, a decrease of 16.3% from R$ 82.4 billion in 2022[172]. - The company produced 11.6 million tonnes of crude steel in 2023, down 8.8% from 12.7 million tonnes in 2022[175]. - Shipments totaled 11.3 million tonnes in 2023, a decline of 4.9% compared to 11.9 million tonnes in 2022[171]. - In 2023, Gerdau's net sales in Brazil decreased to R$26,830.7 million from R$32,971.1 million in 2022, representing a decline of approximately 18.5%[200]. - Gerdau's net income in Brazil was R$904.5 million, a significant decrease from R$3,325.3 million in 2022, reflecting a drop of 72.8%[200]. Operational Risks and Regulatory Environment - Increased competition from heavily subsidized steel imports, particularly from China, poses a significant threat to Gerdau's competitiveness and financial condition[46]. - The company faces risks from rising prices of raw materials, such as iron ore and coking coal, which could increase production costs and reduce profit margins[48]. - Global economic instability, including the impact of the Russian invasion of Ukraine, could adversely affect steel demand and prices, impacting Gerdau's operations[36]. - The company is vulnerable to inflationary cost pressures, particularly in relation to energy prices, which have been exacerbated by geopolitical events[52]. - Future compliance with stricter environmental regulations may increase operational costs, adversely affecting financial performance[104]. - The company may face increased costs and operational challenges due to future GHG emissions regulations and the need for new technologies in the production chain[60]. - Regulatory measures on steel trade may increase product prices or limit export capabilities, affecting financial results[102]. - The company is involved in various legal disputes that could result in significant monetary claims, impacting cash flows and financial condition[99]. Market Competition and Strategic Positioning - Gerdau is the largest Brazilian producer of steel, with 71% of its production derived from scrap, transforming 11 million tonnes of scrap into various steel products annually[132]. - Gerdau faces intense competition from local companies like Simec and CSN in the rebar market, as well as from imports, particularly from China[220][221]. - Key competitors in the North American market include Commercial Metals Company, Nucor Corporation, Steel Dynamics Inc., and Cleveland-Cliffs[223]. - The company’s South American operations are heavily reliant on shipments from Argentina and Peru, with over 80% of shipments originating from these countries[224]. - Gerdau's competitive edge is attributed to product diversification and decentralized operations, although it faces challenges from heavily subsidized imports[220]. Investment and Capacity Expansion - The company invested in expanding the production capacity of its iron ore mines in Minas Gerais to mitigate exposure to price volatility[50]. - Gerdau holds certified reserves of 476 million metric tonnes of iron ore as of 2023[178]. - Gerdau's production capacity includes 1.1 million tonnes of crude steel and 1.1 million tonnes of rolled steel products annually[187]. - Gerdau operates 29 steel producing facilities globally, with a significant presence in North and South America[161]. - The company operates 26 mini mills worldwide, which are designed to produce steel products with lower capital costs and operational risks[202]. Economic and Political Influences - The deterioration of Brazilian and global economic conditions could negatively affect global demand for steel and the company's sales and cash flows[82]. - Brazil's political instability continues to influence economic performance and investor confidence, potentially leading to economic deceleration[113]. - High inflation in Brazil could reduce demand for the company's products and increase costs, adversely affecting profit margins and net income[115]. - The company is subject to information technology risks, including potential cyberattacks that could disrupt operations and result in financial losses[75]. Management and Governance - Gerdau's controlling shareholder has significant powers, including electing a majority of directors and approving major corporate actions, which may conflict with non-controlling shareholders' interests[119]. - Gerdau's management continuity is crucial for its competitive position, as the loss of senior executives could adversely impact its strategy and operations[120]. - The company is subject to different disclosure requirements as a foreign issuer, which may affect the information available to U.S. investors[121].

¹ Global Revolving Credit Facility ² With no deferred expenses 14 R$2.6 b R$175 M R$0.05 PER SHARE (R$ million) Buyback (R$ million) Payout¹ Dividends distributed 4Q23 PAYOUT ABOVE THE STIPULATED MINIMUM, EVEN AMID A CHALLENGING BACKDROP GGBR4 1. Shareholder payments / Parent Company's net income after booking the reserves set forth in the Bylaws. 2. Closing price in 2023 over the closing price in 2018, in the original currency and adjusted by dividends (including the buyback program and bonus shares). This ...