Gerdau reported Tuesday net revenue of R9.2 billion (US$4.6 billion) in Q1 2013 while shipments reached 4.6 million tons and steel production was 4.4 million tons. Net income was R160 million (US$79.6 million) in the quarter, a 60 percent decrease from Q1 2012 but up 12 percent from Q4 2012. During the company's conference call, Andre Gerdau Johannpeter, President and CEO of the company, said Gerdau's performance was impacted by a lower demand in Europe and North America, as well as by increasing steel imports into Latin America and the United States.
"Despite the excess of installed capacity of steel in the world, markets began to show a gradual improvement in demand levels, which added to our management efforts, and should reflect positively on our performance over the coming quarters. Our main challenge is to improve the company's margins and to do so, we will continue working hard to increase the operational efficiency of our business, optimize the working capital compared to the levels of demand, and, considering the volatility of the markets, be cautious when managing the disbursement schedule of investments (CAPEX). Furthermore, we are making strategic investments that should also be reflected in increased margins, notably the expansion of our own production of iron ore with new shipments scheduled for 2013, the production of flat steel in Brazil, and the startup of activities in India," says Gerdau's chief executive officer (CEO), André B. Gerdau Johannpeter.
During the first quarter, the markets supplied by Gerdau performed differently. In Brazil, sales to the domestic market grew 12 percent, adding 1.4 million tons, while exports from the country decreased 22 percent to 391,000 tons. In Canada and the United States (not including special steel mills), 1.5 million tons were sold, which represents a 13 percent decrease compared to the same period last year.
The units located in other countries of Latin America (excluding Brazil), in turn, amounted to 646,000 tons of steel sold, which is 4 percent less compared to Q1 2012. The sales closed by the Special Steel Business Operation (includes production plants in Brazil, United States, Spain, and India) were 667,000 tons, a decrease of 4 percent compared with the same period last year.
