Brazil’s largest steelmaker Gerdau saw its net profit decline 94.8 percent in Q1, year-on-year, from BRL 267 million ($75.5 million) to BRL 14 million ($3.96 million), the company said on Wednesday while releasing its quarterly results.
According to the Brazilian steelmaker, net revenues in Q1 diminished 3.4 percent, year-on-year, to BRL 10 billion, due to lower domestic sales. Cost of sales slightly declined 0.7 percent in Q1, year-on-year, to BRL 9.2 billion.
Gerdau’s adjusted EBITDA in Q1 was BRL 930 million, 15.9 percent down, year-on-year. Gross margin declined to 8.1 percent in Q1, from 10.6 percent in the same quarter of the year prior. EBITDA margin declined as well, going from 10.6 percent in Q1 2015 to 9.2 percent in Q1 this year.
Gerdau said crude steel output fell 4.3 percent in Q1, year-on-year, to 4.1 million mt. Sales volumes in the same quarter diminished 7 percent, year-on-year, to 3.8 million mt.
A look at Gerdau’s combined revenues from its business units in the past twelve months make it evident the steelmaker is looking to expand the revenue share it has in the export market.
According to Gerdau, in the past 12 months, Brazil accounted for 27.9 percent of the company’s total revenues, while the North American business accounted for another 40 percent share. South America and the specialty steel units accounted for the remaining 12.2 and 19.9 percent revenue shares, respectively, in the same period. In the US, revenues in Q1 rose to BRL 4.2 billion in Q1, from BRL 3.8 billion in the same quarter of the year prior.