Gerdau二季度EBITDA环比增长16%但股价盘中下跌

Stocks turn mixed after stellar start to August takes Wall Street back to record
Introduction & Market Context
Brazilian steelmaker Gerdau (NYSE:GGB) presented second-quarter 2026 results on August 5 that showed a sharp recovery in profitability, with adjusted EBITDA reaching R$ 3.4 billion, the highest level since the third quarter of 2023. The presentation highlighted a 16% sequential increase in EBITDA and a 45% jump in adjusted net income to R$ 1.5 billion, driven primarily by resilient demand in North America and improved operational efficiency across all segments.
Despite the strong quarterly performance, shares fell 1.82% to $10.25 in recent trading, down from the previous close of $10.42, though still trading near the upper end of the 52-week range of $6.52 to $10.49. The modest decline suggests investors absorbed management’s conservative tone regarding margin sustainability and upcoming cost pressures, including an expected R$ 100-150 million one-time impact from scheduled maintenance at the Midlothian facility in the third quarter.
Quarterly Performance Highlights
The company’s second-quarter presentation emphasized four key achievements: total steel shipments of 2.9 million tonnes with quarter-over-quarter and year-over-year growth; North America segment EBITDA increasing 15% versus the first quarter; gradual improvement in Brazil despite continued import pressure; and expansion of energy self-production to over 50% of total consumption through increased ownership in Dona Francisca Energética.
As shown in the following overview of key financial performance indicators, Gerdau delivered broad-based improvement across multiple metrics:
Earnings per share reached R$ 0.74, up from R$ 0.51 in the first quarter, while leverage remained comfortable at 0.69x net debt to EBITDA. The company generated free cash flow of R$ 237 million in the quarter and invested R$ 2.1 billion in capital expenditures during the first half, representing approximately 45% of the full-year plan. Management declared dividends of R$ 451 million for Gerdau S.A. (R$ 0.23 per share) and R$ 146 million for Metalúrgica Gerdau S.A. (R$ 0.11 per share), payable September 11, 2026.
The presentation’s performance highlights illustrate the company’s diversified operational footprint:
North America: The Primary Growth Engine
North America emerged as Gerdau’s strongest performer in the second quarter, with the segment posting record common long steel shipments and achieving a backlog exceeding 100 days—the highest level since 2021. Total shipments in the region increased 5.5% sequentially to 1.347 million tonnes, while year-over-year volumes grew more than 7%.
The detailed regional breakdown demonstrates the segment’s operational strength:
Net sales in North America rose 8.3% quarter-over-quarter to R$ 10.1 billion, driven by higher shipments, expanding realized prices, and a greater share of value-added products. Segment EBITDA climbed 15.4% to R$ 2.6 billion, with margins expanding to 25.7% from 24.1% in the first quarter. The company operated at 90% utilization for rolled steel and 87% for crude steel, reflecting robust demand from data centers, renewable energy projects, infrastructure development, and semiconductor plant construction.
Management noted that cost of goods sold increased 5% in the quarter due to higher shipments and elevated maintenance, fuel, and energy costs. Freight costs specifically rose 8.5% sequentially, with pressure expected to continue into the third quarter. The presentation indicated that recent price increases announced in late July and early August were not yet fully reflected in second-quarter results, potentially providing upside for the third quarter if they hold.
Brazil Operations: Navigating Import Headwinds
Gerdau’s Brazilian operations showed modest sequential improvement, with EBITDA increasing 22% to R$ 705 million and margins expanding to 10.5% from 9.2% in the first quarter. However, the segment continues to face significant challenges from elevated steel imports, which management now considers a structural rather than cyclical issue.
The Brazil segment overview reveals the operational dynamics:
Shipments in Brazil increased 2.1% sequentially to 1.352 million tonnes, driven by higher domestic volumes of flat, long, and special steel products. Net sales rose 6.6% to R$ 6.7 billion, reflecting slightly higher realized prices and an improved sales mix. The segment operated at 64% utilization for rolled steel and 79% for crude steel, indicating substantial excess capacity.
A critical factor affecting Brazilian operations is the steel import penetration rate, which the following chart illustrates:
The import penetration rate averaged 18% in the second quarter, the lowest since the first quarter of 2023, though the first-half rate of 22.5% remained elevated compared to historical levels. The presentation detailed extensive trade defense measures, including quota systems with 25% tariffs on 27 NCMs (nomenclature codes), antidumping cases for hot-rolled coils and wire rod with positive preliminary decisions expected in the second half of 2026, and mobilization of industrial sectors for additional surcharge claims.
Management emphasized that the company is designing its long-term Brazil strategy around the assumption that imports will remain elevated rather than returning to pre-2023 levels, focusing instead on productivity improvements, sales mix optimization, and cost reduction initiatives.
South America Performance
The South America segment, comprising operations in Argentina, Peru, Uruguay, and Chile, delivered strong margin expansion despite lower volumes. EBITDA increased 10.4% sequentially to R$ 205 million, with margins reaching 16.0%, the highest among Gerdau’s three reportable segments.
The regional performance breakdown shows the segment’s dynamics:
Shipments declined 7.8% to 282,000 tonnes, reflecting pull-forward of volumes in Peru during the first quarter and weaker demand in Argentina and Uruguay. Net sales fell 8.4% to R$ 1.3 billion, also impacted by depreciation of the U.S. dollar against the Brazilian real. However, net sales per tonne remained stable, supported by an improved sales mix in Argentina and stable prices in Peru, while cost of goods sold per tonne held steady due to higher capacity utilization in Argentina and Uruguay and operational efficiency gains in Peru.
Geographic Diversification Strategy
The presentation emphasized the importance of Gerdau’s geographic diversification in delivering resilient consolidated results despite varying regional conditions. The following analysis demonstrates how different segments contributed to overall performance:
On a consolidated basis, adjusted EBITDA increased 16% sequentially and 34% year-over-year, with margins expanding to 19.2% from 17.7% in the first quarter and 14.6% in the second quarter of 2025. Net sales grew 7% sequentially to R$ 17.9 billion. The charts illustrate how North America’s strong performance more than offset headwinds in Brazil, validating management’s multi-region strategy.
Strategic Growth Projects
Gerdau highlighted three major competitiveness projects nearing completion, collectively expected to add approximately R$ 1.4 billion to R$ 1.5 billion in annual EBITDA when fully operational. The detailed project status update shows significant progress:
The Miguel Burnier Mining project, the largest initiative with potential EBITDA contribution of approximately R$ 1.1 billion, reached 95% physical completion and 90% financial completion, with start-up scheduled for the second half of 2026. Total capital investment is approximately R$ 3.6 billion. This sustainable mining platform will provide iron ore self-sufficiency and cost advantages for Brazilian operations.
The Scrap Processing facility in Pindamonhangaba achieved 90% physical completion and 85% financial completion, also targeting second-half 2026 start-up. With total CapEx of approximately R$ 400 million, the project is expected to contribute roughly R$ 100 million in annual EBITDA through improved raw material efficiency and scrap processing capabilities.
The Midlothian expansion Phase 1 in North America reached 80% physical completion and 95% financial completion. The R$ 1.2 billion investment is projected to generate approximately R$ 275 million in annual EBITDA, supporting growth in a market with strong structural demand. Management noted that a scheduled maintenance shutdown at the melting shop will create temporary production impacts and one-time costs in the third quarter, though inventory levels are sufficient to maintain customer service.
The overall capital expenditure allocation demonstrates the company’s investment priorities:
For full-year 2026, Gerdau maintained CapEx guidance at approximately R$ 4.7 billion, with about 55% denominated in U.S. dollars and 45% in Brazilian reais. The allocation includes R$ 2.3 billion for coking plants and blast furnaces (48.9%), R$ 1.8 billion for maintenance (38.3%), and R$ 600 million for competitiveness initiatives (12.8%). Management indicated that future annual CapEx could decline to R$ 4.0-4.5 billion as asset lifespans improve.
Financial Position and Cash Generation
Gerdau’s presentation emphasized its strong balance sheet and disciplined capital allocation approach. The cash flow waterfall illustrates how the company converted EBITDA into free cash flow:
Starting from adjusted EBITDA of R$ 3.4 billion, the company faced working capital outflows of R$ 933 million, income tax payments of R$ 657 million, capital expenditures of R$ 1.064 billion, interest payments of R$ 630 million, and R$ 171 million for intangibles and leasing. After adding R$ 56 million from joint venture proportional EBITDA and R$ 206 million from other items, free cash flow totaled R$ 237 million for the quarter.
The company’s liquidity and debt profile demonstrates financial strength:
Gross debt declined to R$ 13.6 billion by the end of the second quarter, while cash stood at R$ 5.4 billion, resulting in net debt of R$ 8.1 billion. The net debt to adjusted EBITDA ratio of 0.69x on a last-twelve-months basis provides substantial cushion below the company’s 1.5x policy target. Total liquidity reached R$ 10.0 billion, comprising R$ 5.5 billion in cash and equivalents plus R$ 4.5 billion in available global revolving credit facilities.
The debt maturity profile shows an average term of 7.6 years, with limited near-term maturities and peaks in 2035 (R$ 3.4 billion) and 2036 onwards (R$ 2.8 billion). Average cost of debt stood at CDI minus 0.15% for Brazilian real-denominated debt and 6.13% for U.S. dollar-denominated debt. Credit ratings remain investment grade: BBB with positive outlook from Fitch, BBB stable from Standard & Poor’s, and Baa2 stable from Moody’s.
Shareholder Returns
The presentation highlighted Gerdau’s commitment to returning capital to shareholders above mandatory minimum requirements. The shareholder return overview shows the distribution strategy:
Total distributions in the second quarter reached R$ 556 million, comprising R$ 451 million in dividends and R$ 105 million in share buybacks. The payout ratio for the quarter was 40.3%, down from 58.8% in the first quarter but reflecting management’s balanced approach between returning cash and maintaining financial flexibility for growth investments.
For Gerdau S.A., the share buyback program reached 31% completion as of July 17, 2026, with R$ 334 million invested to repurchase shares representing 0.9% of outstanding stock. The total 2026 program authorizes repurchase of up to 56.4 million shares. For Metalúrgica Gerdau S.A., 22% of the program was executed, investing R$ 21 million to repurchase 0.2% of outstanding shares from a total authorization of 10 million preferred shares.
Management announced the cancellation of 14.7 million GGBR shares (85% of repurchased shares) and 2.2 million GOAU shares (100% of repurchased shares), demonstrating commitment to reducing share count and enhancing per-share metrics.
Operational Excellence and Safety
The presentation emphasized Gerdau’s continued focus on workplace safety as a core operational priority. The safety performance trend illustrates significant long-term improvement:
The accident frequency rate—measured as the number of accidents per million hours worked—declined to 0.57 in 2026, the lowest level in the company’s recent history and down from 0.84 in the first quarter. This represents a dramatic improvement from 0.99 in 2015 and continues a multi-year trend of enhanced safety performance, reflecting the company’s systematic approach to risk management and employee protection.
Forward-Looking Statements and Outlook
Gerdau’s outlook for the remainder of 2026 varies by region, reflecting different market dynamics and operational factors. For North America in the third quarter, management expects stable margins supported by a solid backlog and healthy shipment levels, though with moderate pressure on production costs from fuel expenses and scheduled maintenance shutdowns. The temporary production impact from the Midlothian plant shutdown is expected to be managed through existing inventory levels.
For full-year 2026 in North America, the company anticipates solid demand driven by renewable energy and data center markets, with gradual recovery in special steel markets that remain below historical activity levels. USMCA negotiations are ongoing with no concrete indications of relevant steel tariff changes. The start-up of Phase 1 of the Midlothian expansion in the second half will add capacity to serve growing markets.
In Brazil, the third-quarter outlook calls for slight margin expansion based on modest growth in domestic sales with a lower share of exports in the sales mix. Pricing dynamics are expected to remain relatively stable despite a challenging competitive environment, while costs are projected to stay elevated due to metallurgical coal prices, logistics, and freight expenses. The start-up of the Miguel Burnier Mining Project and the Scrap Processing Project in Pindamonhangaba should provide operational benefits.
For full-year 2026 in Brazil, management expects more moderate growth in certain steel-consuming sectors, particularly construction and industry, amid inflationary pressures and a high-interest-rate environment. The company continues to monitor apparent steel consumption and developments in trade defense measures, particularly the hot-rolled coil and wire rod antidumping cases. The ramp-up of Miguel Burnier in the fourth quarter should provide meaningful cost benefits.
The presentation concluded with management’s strategic commitment to "continued discipline in capital allocation and operational efficiency," emphasizing that the company is not in a hurry to increase leverage and prefers to maintain balance sheet strength while returning cash to shareholders through dividends and buybacks.
Risk Factors and Challenges
Despite the strong second-quarter results, Gerdau faces several headwinds in coming quarters. Management explicitly cautioned that steel spreads cannot expand indefinitely, suggesting limited room for further margin improvement from pricing alone. The scheduled Midlothian maintenance shutdown will create near-term cost pressures and temporary production constraints in the third quarter.
Freight inflation remains a persistent challenge, particularly in North America where costs rose 8.5% sequentially and are expected to remain elevated. In Brazil, elevated import penetration continues to constrain pricing power and market share, with management now designing long-term strategy around the assumption that imports will remain structurally higher than historical levels rather than reverting to pre-2023 patterns.
The successful execution of major capital projects—particularly the Miguel Burnier mining expansion, Pindamonhangaba scrap processing facility, and Midlothian expansion—is critical to delivering the projected R$ 1.4-1.5 billion in incremental annual EBITDA. Any delays or cost overruns could impact the expected returns on these substantial investments.
Commodity price volatility, particularly for metallurgical coal and scrap, creates ongoing cost uncertainty, while trade policy developments including potential USMCA changes and the outcome of Brazilian antidumping investigations could materially affect competitive dynamics in key markets.
Full presentation:
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