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Steelmaker Gerdau's Q1 profit plunges 94.8% YOY

Braziliansteelmaker Gerdau SAsaid May 4 that its first-quarter net profit plunged 94.8% year over year to 14million Brazilian reais due to lower operating income.

EBITDA for the three-month period slid to 882 million reais,representing a 19.0% year-over-year drop from 2015 of about 1.09billion reais.

AdjustedEBITDA fell by 15.9% to 930 million reais, mainly due to weaker performance ofBrazilian and Specialist steel divisions, partially offset by betterperformance at North and South American divisions.

Likewise,net sales fell 3.5% year over year to 10.09 billion reais mainly due to lowershipments by the Brazilian steel division in the domestic market, which werepartially offset by higher net sales by the North American division whentranslated into Brazilian currency.

Steelshipments decreased by 7% on a yearly basis to 3.9 million tonnes, while crudesteel production fell by 4.3% to 4.2 million tonnes.

Thecompany returned to 11 million reais positive free cash flow generation from anegative 502 million reais in the year-ago period as first-quarter EBITDA wassufficient to cover the company's commitments, including CapEx, income tax,interest and working capital.

CapExfor the period totaled 485.3 million reais, of which the majority was spent onthe Brazilian division.

As of May 3, US$1 wasequivalent to 3.57 Brazilian reais.