Gerdau(US:GGB)2025-07-31 21:24Financial Performance - For the three-month period ended June 30, 2025, net sales reached R$17,525,750, up from R$16,615,817 in the same period of 2024, representing a growth of 5.5%[4]. - The gross profit for the six-month period ended June 30, 2025, was R$3,977,100, a decrease of 13.6% compared to R$4,606,615 in the prior year[4]. - Net income for the three-month period ended June 30, 2025, was R$864,497, slightly down from R$866,981 in the same period of 2024[5]. - Net income for the six-month period ended June 30, 2025, was R$1,622,301 thousand, a decrease from R$2,919,853 thousand in the same period of 2024, representing a decline of approximately 44.4%[7]. - Total comprehensive income for the three-month period ended June 30, 2025, was a loss of R$379,892, contrasting with a gain of R$3,791,277 in the same period of 2024[5]. - Total comprehensive income for the period recognized was R$1,605,779 thousand, with other comprehensive losses of R$3,463,772 thousand, resulting in a total comprehensive loss of R$1,857,993 thousand[7]. - The company reported a significant increase in depreciation and amortization expenses, rising to R$1,810,379 thousand in 2025 from R$1,497,105 thousand in 2024, an increase of approximately 21%[7]. - The company’s income before income taxes for the six-month period ended June 30, 2025, was R$2,228,616, down from R$3,299,354 for the same period in 2024, a decrease of 32.4%[42]. Assets and Liabilities - As of June 30, 2025, Gerdau S.A. reported total assets of R$86,854,070, a slight increase from R$86,814,493 as of December 31, 2024[2][3]. - Current liabilities increased to R$11,521,998 as of June 30, 2025, from R$10,851,391 at the end of 2024, reflecting a rise of 6.2%[3]. - Long-term debt rose to R$11,174,675 as of June 30, 2025, compared to R$9,110,972 at the end of 2024, indicating an increase of 22.7%[3]. - The company’s total liabilities amounted to R$31,729,864 as of June 30, 2025, compared to R$28,640,707 at the end of 2024, indicating an increase of 10.8%[165]. - The company’s total non-current liabilities in joint ventures decreased to R$9.67 billion as of June 30, 2025, from R$11.44 billion at the end of 2024[26]. Cash Flow and Investments - Cash provided by operating activities for the six-month period ended June 30, 2025, was R$3,303,460 thousand, down from R$4,539,070 thousand in 2024, indicating a decrease of about 27.3%[7]. - Cash and cash equivalents at the end of the period increased to R$8,500,933 thousand from R$4,889,466 thousand, reflecting a growth of about 74%[7]. - The company made significant investments in property, plant, and equipment, totaling R$3,498,150 thousand for the six-month period ended June 30, 2025, compared to R$2,253,652 thousand in 2024, an increase of approximately 55%[7]. - Gerdau S.A. reported a net cash used in investing activities of R$4,304,544 thousand for the six-month period ended June 30, 2025, compared to R$894,865 thousand in 2024, indicating a substantial increase in investment outflows[7]. Shareholder Information - The company reported a basic earnings per share of R$0.43 for preferred and common shares for the three-month period ended June 30, 2025, compared to R$0.41 in the same period of 2024[4]. - The total allocated net income available to common and preferred shareholders for the six-month period ended June 30, 2025, was R$1,605,779, compared to R$2,902,892 in 2024[148]. - The company credited dividends of R$0.12 per share for the first quarter of 2025, totaling R$241,085[146]. - The Board of Directors proposed an advance payment of the mandatory minimum dividend for the current fiscal year amounting to R$239.5 million[172]. - The new share buyback program approved on January 20, 2025, aims to acquire up to 63,000,000 preferred shares and 1,500,000 common shares over a maximum term of 12 months[137]. Acquisitions and Strategic Initiatives - The Company acquired 100% of Gerdau Summit Aços Fundidos e Forjados S.A. for approximately US$32.6 million (R$188.6 million), resulting in a bargain purchase gain of R$37.7 million[30]. - The acquisition of Rio do Sangue Energia S.A. was completed for R$244.5 million, aimed at increasing self-production of renewable energy for steel production[32]. - The Company acquired 100% of Kloeckner Metals Brasil Ltda. for R$42.9 million, realizing a bargain purchase gain of R$3.6 million[33]. - The acquisition of Paranatinga Energia S.A. was completed for approximately R$197.2 million, supporting the strategy of increasing self-production of clean energy[34]. - Gerdau S.A. has expanded its operations in North America, reflecting a strategic focus on regional market dynamics and local currency operations[14]. Market and Economic Conditions - The company will continue to monitor the steel market throughout 2025 to identify any significant changes in demand or economic conditions that could impact projections[170]. - The company is assessing the impact of new IFRS standards effective in 2026 and beyond, which may influence future financial reporting and disclosures[16]. Tax and Legal Matters - The company has ongoing tax contingencies totaling R$653,845 million related to ICMS, which increased from R$625,877 million as of December 31, 2024[113]. - The company is involved in lawsuits related to Corporate Income Tax totaling R$1,482,170 million, slightly decreasing from R$1,486,615 million at the end of 2024[118]. - Judicial deposits related to tax, labor, and civil lawsuits total R$343,639 as of June 30, 2025[123]. Financial Ratios and Sensitivities - The company has a gross debt limit set at R$12 billion and aims to maintain a Net Debt/EBITDA ratio of less than or equal to 1.5 times[78]. - The interest rate sensitivity analysis indicates that a 10 basis point increase in the average interest rate would impact financial expenses by R$53,968 as of June 30, 2025, compared to R$34,471 as of June 30, 2024[82]. - A 1% change in the sales price of products would affect revenues by R$24,631 as of June 30, 2025, down from R$166,158 as of June 30, 2024[83].