Brazilian steel producer,
Gerdau S.A.
(
GGB
) reported its financial results for the fourth quarter and fiscal
year 2011 on February 15, 2012. The company's net income increased
12.0% year over year to R$472 million (US$262.2 million). The
bottom-line results were driven by higher shipments and financial
income as well as lower income taxes in the quarter. These were
partially offset by higher cost of sales.
In the fiscal year, net income plummeted 15% year over year to
R$2,098 million (US$1,256.3 million).
Revenue
Net revenue in the fourth quarter jumped 16% year over year to
R$9,065.8 million (US$5,036.6 million), primarily attributable to
higher shipments in the quarter.
As for the net revenue, Brazilian business accounted for 35.5%
and registered a 6% increase over the year-ago quarter. North
American revenue increased 29% and contributed 31.1% to net revenue
while Latin American revenue represented 12.9% of net revenue and
spiked 35% over the year-ago period. Revenue from Specialty Steel
grew 10% year over year and accounted for about 20.5% of net
revenue.
Crude steel production increased 8% year over year but plummeted
6% sequentially to 4,732 million tones in the quarter. Long steel
production jumped 9% year over year and went down 5% sequentially
to 3,982 million tones.
Shipments were strong in the quarter at 4,709 million tones and
represented a 4% year - over- year and 3% sequential decline.
In the fiscal year 2011, net revenue approximated to R$35,406.8
million (US$21,201.7 million), up 13% year over year.
Margins
Gross margin in the fourth quarter was at 13.2%, up compared
with 12.2% in the year-ago quarter. Selling expenses, as a
percentage of revenue, were at 1.7%, down compared with 2.0% in the
year-ago quarter. General and administrative expenses plummeted 80
basis points year over year to 5.3%.
EBITDA at R$1,025 million (US$569.4 million) was up 26% year
over year with a margin of 11% in the quarter. Operating margin was
6.3% versus 8.7% in the year-ago quarter.
Balance Sheet
Exiting the fourth quarter, Gerdau had cash and cash
equivalents of approximately R$ 1,476.6 million (US$793.9 million),
reflecting sequential increase of 15.5%. Long-term debt was roughly
flat at R$11,182.3 million (US$6,012.0 million).
Cash Flow
Net cash flow from operating activities in the fiscal year 2011
was R$1,710.0 million (US$1,024.0 million), down 58.7% year over
year. Capital spending increased 52.2% in the year to R$1,961.4
million (US$1,174.5 million).
Gerdau S.A. is one of the leading Brazilian steel makers. The
company plans to spend roughly R$10.3 billion for the period from
2012 to 2016. The company faces stiff competition from its peers
like
Companhia Siderurgica Nacional
(
SID
),
Arcelor Mittal
(
MT
) and
Usinas Sider
(USNZY.PK).
GERDAU SA ADR (
GGB
): Free Stock Analysis Report
ARCELOR MITTAL (
MT
): Free Stock Analysis Report
CIA SIDERUR-ADR (
SID
): Free Stock Analysis Report
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