(Adds details throughout)
By Guillermo Parra-Bernal and Alberto Alerigi Jr.
SAO PAULO May 4 Gerdau SA, the
largest steelmaker in the Americas, swung to an unexpected
first-quarter loss on Thursday, reflecting declining revenue and
the impact of a recent Brazilian ruling on the booking of
Gerdau lost a net 34 million reais ($10.8 million) last
quarter, compared with net income of 14 million reais a year
earlier. Analysts expected profit of 70.96 million reais in the
Production and sales of steel fell 3.3 percent and 6.8
percent, respectively, from a year earlier, while net revenue
fell 16 percent to 8.459 billion reais. The result missed the
consensus estimate of 8.866 billion reais, as compiled by
Costs fell a tad slower than revenue in the period, while
sales, general and administrative expenses dropped a
bigger-than-expected 32 percent. Chief Executive Officer Andre
Gerdau Johannpeter is moving to boost mill efficiency and cut
payroll by the end of the decade.
In a securities filing, Porto Alegre, Brazil-based Gerdau
also said it may earmark 1.3 billion reais for capital spending
this year. Management will discuss quarterly results later in
Adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA) fell 8.3 percent last quarter, more than
expected. Adjusted EBITDA, a gauge of operational profit,
totaled 853 million reais in the January-through-March period,
compared with the estimate of 1.008 billion reais.
Part of the decline in adjusted EBITDA came as Gerdau
recalculated the value of unspecified contingent liabilities,
leading to a net charge of 858 million reais in the quarter.
($1 = 3.1809 reais)
(Editing by Chizu Nomiyama and Jeffrey Benkoe)