Steelmaker Gerdau on Monday reported first-quarter core earnings that slightly beat expectations, saying changes in U.S. steel trade policy helped offset weak results at its Brazilian headquarters.
Gerdau is Brazil’s largest steelmaker by market value and owns several mills in the Americas. The company reported adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of 2.4 billion reais, beating the 2.29 billion reais forecast by analysts in a London Stock Exchange survey.
Nevertheless, adjusted EBITDA fell nearly 15% year-on-year, and adjusted net profit fell 39% to 758 million reais.
However, Gerdau noted that adjusted EBITDA remained largely stable compared to the previous quarter due to strong results in North America.
The company said in its earnings report that the increase in U.S. demand was partly seasonal, “but also a response from customers to changes in U.S. trade policy, with increased inventory levels and a preference for domestic steel.”
Net income in North America rose more than 16% from the quarter ended in December, while net income in Brazil fell 3.5%.
For the quarter, Gerdau net income totaled 17.38 billion reais, above the 17.06 billion reais expected in a London Stock Exchange survey.
($1 = 5.6537 reais)
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