By Brazil Stock Guide — Brazilian steelmaker Gerdau (B3: GGBR4; NYSE: GGB) reported adjusted net income of R$1.52 billion ($296 million) in the third quarter of 2026, up 39.7% from a year earlier, driven primarily by stronger margins at its North American operations. Adjusted EBITDA rose 37.8% year over year and 9.9% from the previous quarter to R$3.77 billion ($733 million), while the EBITDA margin reached 20.2%, its highest level since the second quarter of 2023.
Consolidated net revenue totaled R$18.69 billion ($3.64 billion), up 3.9% from the third quarter of 2025, despite a 5.6% decline in steel shipments to 2.91 million metric tons. The figures highlight the importance of recovering steel prices, particularly in North America, in offsetting lower sales volumes and cost pressures elsewhere. Reported net income rose 43.4% year over year to R$1.56 billion ($304 million).
North America cemented its position as Gerdau’s main earnings engine. Adjusted EBITDA in the region surged 60% year over year to R$2.91 billion ($566 million), with a margin of 27.7%, the highest in four years. Although North America accounted for 44.2% of the company’s steel shipments across its business segments, it generated 76.4% of segment adjusted EBITDA. Regional net revenue increased 14.4% to R$10.51 billion ($2.05 billion).
The performance was supported by steel price increases implemented throughout the year, amid resilient demand from nonresidential construction, data centers and renewable energy projects. Revenue per metric ton in North America rose 4.7% in U.S. dollar terms from the previous quarter, equivalent to an increase of approximately $70 per ton. The order backlog ended September at more than 100 days, roughly 50% above historical averages, pointing to continued favorable market conditions for domestic steel producers.
In Brazil, conditions remained challenging. Adjusted EBITDA reached R$741 million ($144 million), down 2.8% year over year, although it improved 5.2% from the second quarter. Net revenue fell 9.7% from a year earlier to R$6.95 billion ($1.35 billion), while total steel shipments declined 14.6% to 1.35 million metric tons. The Brazilian EBITDA margin stood at 10.7%, less than half the level achieved by the North American business.
Gerdau attributed part of the pressure on its domestic operations to elevated steel imports and the impact of high interest rates on industrial activity. According to figures from the Brazilian Steel Institute cited by the company, total steel imports increased 19.8% from the second quarter, including a 33.8% rise in flat steel imports. Despite those pressures, Gerdau’s domestic shipments grew 5.9% quarter over quarter, supported by flat steel products and a more favorable sales mix. Brazilian steel exports, meanwhile, declined 28%.
Elsewhere in South America, including Argentina, Peru and Uruguay, adjusted EBITDA fell 31.8% year over year to R$160 million ($31 million), with a margin of 11.1%. Higher sales in Peru, where operations achieved record production and sales levels in August, were insufficient to offset lower output in Argentina, costs associated with scheduled maintenance shutdowns and weak demand in parts of the region.
Cash Flow and Dividends
The improvement in operating performance also translated into stronger cash generation. Free cash flow reached R$1.44 billion ($280 million) in the quarter, compared with R$237 million in the April-June period, supported by higher EBITDA, lower working capital requirements and reduced interest payments. Net debt ended September at R$7.69 billion ($1.50 billion), down 5.3% from the previous quarter, while the net debt-to-adjusted EBITDA ratio declined to 0.58 times from 0.69 times, based on the trailing 12 months.
Capital expenditures totaled R$955 million ($186 million) in the quarter and R$3.1 billion ($603 million) during the first nine months of 2026, equivalent to 66% of the company’s full-year investment budget. In Brazil, Gerdau began operating its new recycling center in Pindamonhangaba, São Paulo state, and maintained its fourth-quarter startup target for the Miguel Burnier mining project in Minas Gerais. In the United States, the expansion of its Midlothian plant in Texas is expected to add approximately 150,000 metric tons of annual crude steel production capacity by year-end.
Gerdau’s board approved R$667 million ($130 million) in dividends, equivalent to R$0.34 per share, payable on December 15. Shareholders of record as of November 10 will be entitled to the payment. The company is also continuing its share buyback program, under which it has already spent R$344.1 million ($67 million).
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