This article first appeared on GuruFocus .
Release Date: April 28, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Metalurgica Gerdau SA ( BSP:GOAU3 ) posted strong results in North America, with the best adjusted EBITDA for the first quarter since 2022.
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The company achieved a higher EBITDA margin in Brazil compared to the previous quarter, thanks to cost discipline.
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Metalurgica Gerdau SA ( BSP:GOAU3 ) introduced Gerdau New Eco, a low-carbon steel solution, expanding its product portfolio for a low-carbon economy.
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The company recorded a free cash flow of BRL16 billion, reflecting substantial improvement in EBITDA and reduced CapEx pace.
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A new share buyback program was approved, covering up to 10 million preferred shares, enhancing shareholder value.
Negative Points
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The Brazilian market faced pressure from excessive steel imports, impacting profitability.
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There is ongoing uncertainty regarding anti-dumping investigations in Brazil, affecting market stability.
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The Miguel Burnier mining project faced delays due to civil construction and electromechanical assembly challenges.
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The company anticipates challenges in passing cost pressures to prices due to competitive market dynamics.
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There is a need for transformation in Brazil's operations, similar to the restructuring done in North America, which may require significant strategic shifts.
Q & A Highlights
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Q: Can you elaborate on the productivity improvements in Brazil and the main levers for cost reduction? A: Gustavo Verneck, CEO: The improvements stem from initiatives we control, such as logistics and industrial productivity. We see opportunities to enhance competitiveness and cost efficiency, particularly in logistics, as we serve all corners of Brazil. We are also negotiating with customers to manage cost pressures from energy and input prices.
Q: What are your expectations for CapEx in 2027, considering the completion of major projects? A: Rafael Japur, CFO: It's too early to provide formal guidance for 2027 CapEx. However, we anticipate maintaining a disciplined approach, with maintenance CapEx averaging BRL3 billion annually. We aim to balance competitive projects that generate EBITDA with maintaining financial health.
Q: Can you provide insights into the North American operations and their future outlook? A: Gustavo Verneck, CEO: Demand remains resilient, driven by data centers and infrastructure projects. Our business model focuses on merchants and structurals, benefiting from robust trade defense mechanisms. We expect stable high levels of steel consumption and are confident in maintaining strong results.
Q: How do you view the competitive dynamics in Brazil, particularly regarding imports and trade defense measures? A: Gustavo Verneck, CEO: We are optimistic about trade defense measures, as the evidence of damage from imports is clear. We expect anti-dumping investigations to conclude favorably, improving the competitive landscape. The market share among players is stable, allowing us to focus on efficiency improvements.
Q: What are the expectations for the Miguel Burnier project and potential one-off actions for cash generation? A: Rafael Japur, CFO: The Miguel Burnier project is slightly delayed, but we expect it to contribute significantly to EBITDA in the long term. We are exploring real estate asset monetization and maintaining a disciplined approach to capital allocation, focusing on dividends and share buybacks when appropriate.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
