Brazil’s Gerdau Misses Fourth Quarter Net Profit Forecast Despite Jumping 237%; stocks fall

SAO PAULO, Feb 23 (Reuters) – Shares in Brazilian steelmaker Gerdau SA (GGBR4.SA) fell on Wednesday after missing market consensus forecasts for its fourth-quarter net profit, despite jumping 237% from the ‘last year.

Gerdau said its quarterly net profit reached 3.56 billion reais ($703 million), driven mainly by the U.S. construction sector and industrial sales in Brazil. Analysts polled by Refinitiv Eikon expected it at 3.7 billion reais.

The company’s shares fell 2.9% to 24.69 reais in the early afternoon, among the biggest losers in Brazil’s Bovespa stock index (.BVSP), which was trading almost flat.

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Analysts at Itau BBA viewed the report as neutral, saying adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were in line with their estimates at 5.98 billion reais, up 96% year on year. .

“North America was the highlight, with a solid price increase that more than offset lower shipments. EBITDA margin reached a record high of 27.4%,” Itau BBA said in a research note.

Gerdau’s net revenue rose 58 percent to R$21.55 billion, beating analysts’ forecast of R$20.75 billion.

The figure was driven by rising commodity prices and the depreciation of the Brazilian real, which boosted its U.S. earnings in local currency terms, Gerdau said.

Net income is slightly higher than the prior quarter, while net income fell 36% quarter-on-quarter due to seasonal factors.

Gerdau’s fourth-quarter steel sales totaled 3.16 million tonnes, down 2% from a year earlier, while production fell 3% to 3.28 million tonnes.

In a separate securities filing, Gerdau said he plans to invest some R$4.5 billion in 2022, including around R$500 million in spending planned for 2021 but delayed due to supply chain disruptions. .

Investments in 2021 totaled 3 billion reais, he said.

($1 = 5.0615 reais)

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Reporting by Gabriel Araujo; edited by Louise Heavens and Jason Neely

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