By Brazil Stock Guide – Gerdau S.A. (B3: GGBR4; NYSE: GGB) posted a consolidated net profit of R$1.09 billion (US$196 million) in the third quarter of 2025, a 24% decline from the R$1.43 billion earned a year earlier, though up 26% from the previous quarter. The result came in line with analysts’ expectations and underscores a contrasting dynamic between markets: stronger spreads and demand in North America balanced weaker pricing and margins in Brazil.
Consolidated net revenue totaled R$17.98 billion (US$3.2 billion), a 3.5% increase year-on-year, driven by higher sales volumes (+9%) even amid softer prices. Adjusted EBITDA reached R$2.74 billion (US$490 million), down 17% from 3Q24, with the EBITDA margin narrowing to 15.2%, compared with 20.1% in the same period last year. Free cash flow was positive at R$1.0 billion, while net debt remained stable, with a leverage ratio of 0.81× EBITDA, reflecting disciplined capital management and a solid balance sheet.
The North American division delivered the best quarterly performance in two years, with EBITDA up 43% year-on-year, accounting for 65% of Gerdau’s consolidated result. The region benefited from higher metal spreads, lower import competition, and resilient demand from non-residential construction and renewable energy projects.
Production rose 11.6% year-on-year, to 1.52 million tonnes, while average realized prices increased 5.8%, supported by a richer product mix and downstream expansion. According to management, the company “benefited from a balanced market and a disciplined supply environment in the U.S., where Section 232 trade measures continue to protect domestic producers.”
In contrast, Brazilian operations expanded in volume but saw margins contract under import pressure. Sales were 8.1% higher year-on-year and 16.6% above 2Q25, boosted by a 70% surge in exports, particularly for infrastructure and energy projects. Yet EBITDA in Brazil dropped 52% year-on-year, with import penetration reaching 22.9%, twice the historical average, and domestic prices under continuous pressure.
The Ouro Branco (MG) mill helped mitigate costs, reducing the cost per tonne by 8% following the ramp-up of its hot-rolled coil line, but this was insufficient to offset the pricing impact. The EBITDA margin for the region narrowed to 9.9%, compared to 17.8% in 3Q24, underscoring the challenges of overcapacity and imported competition in the domestic steel market.
At the consolidated level, Gerdau maintained strong profitability and liquidity despite these regional contrasts. The company announced the early redemption (“make-whole”) of its US$500 million 2030 bonds, with settlement scheduled for December 2, part of its strategy to lower borrowing costs and extend maturities.
The Board of Directors also approved dividends of R$0.28 per share (R$555 million), payable on December 11 (record date November 10, ex-div November 11). Additionally, Gerdau cancelled 12.65 million preferred shares and 283,900 common shares held in treasury, without reducing capital, and has executed 88% of its 2025 share buyback program, totaling R$902 million.
Gerdau’s quarterly results highlight the broader rebalancing underway in the global steel market. While North American operations remain robust, protected by trade barriers and stable demand, Brazil continues to grapple with Asian import pressure and deflationary prices, delaying margin recovery.
On the market side, GGBR4 shares have gained 4.2% year-to-date, closing Thursday at R$25.16, while ADRs (GGB) on the NYSE are up 3.8% in the same period. The Metalúrgica Gerdau S.A. (B3: GOAU4), the group’s holding company, reported identical consolidated results — R$1.09 billion in profit and R$2.73 billion in EBITDA — and announced dividends of R$0.19 per share, to be paid on December 12.
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