Gerdau posts adjusted EBITDA of 3.771 billion reais in third quarter, up 37.8% year over year
Key Facts
Gerdau reported third-quarter 2026 results on October 26, posting adjusted EBITDA of 3.771 billion Brazilian reais, up 9.9% from the second quarter and 37.8% from the same period last year. Adjusted EBITDA margin was 20.2%, its highest since the second quarter of 2023, according to the company’s filing with the U.S. Securities and Exchange Commission. Net sales were 18.691 billion reais, up 4.6% quarter over quarter and 3.9% year over year, while adjusted net income rose 3.9% quarter over quarter to 1.523 billion reais. The results came as operating and profitability indicators improved year over year, while steel shipment volumes were nearly unchanged from the previous quarter. The picture differed, however, when compared with analysts’ estimates in dollars: revenue beat expectations, while earnings per share fell short.
Investing.com/Reuters reported quarterly revenue of 3.75 billion dollars, compared with a consensus estimate of 3.58 billion dollars, and earnings per share of 0.159 dollars versus 0.165 dollars expected. The company therefore missed earnings-per-share estimates, despite beating the revenue estimate cited in the report. In its reported accounts in Brazilian reais, quarterly and annual sales increased, as did adjusted net income compared with the second quarter. Steel shipments were 2.914 million tonnes, up 0.2% quarter over quarter but down 5.6% year over year. The company attributed the production decline to scheduled maintenance shutdowns, while shipment volume remained close to its level in the previous quarter.
In North America, Gerdau said improved realized prices more than offset the impact of higher costs, while shipment volumes remained broadly stable from the previous quarter. The company added that demand remained solid during the quarter, driven by non-residential construction, data centers and renewable energy. It also said its order backlog remained well above historical averages, alongside improved prices in the region. Price adjustments implemented by the company during the year contributed about 559 million Brazilian reais to third-quarter results. The impact of higher operating costs offset part of that contribution, according to the results filing. These factors reflect the company’s explanation of its North American business and pricing performance, without attributing overall revenue or profit growth to them alone.
Free cash flow improved to 1.439 billion Brazilian reais in the third quarter, compared with 237 million reais in the second quarter, according to company data. Gerdau attributed the increase to EBITDA growth, lower working capital consumption and interest payments. On leverage, the ratio of net debt to adjusted EBITDA fell to 0.58 times at the end of September, from 0.69 times at the end of the second quarter and 0.81 times in the same period of 2025. Capital expenditure was 955 million reais during the quarter, down 5.3% from the second quarter. Spending in the first nine months of 2026 reached 3.1 billion reais, equivalent to 66% of the full-year plan. The company also said Fitch and S&P Global Ratings raised its outlook from stable to positive while affirming its credit ratings.
While operating and financial metrics improved in the quarter, Gerdau shares listed under the ticker GGB closed at 4.75 dollars on October 26, after 5.10 dollars on October 23 and 5.07 dollars on October 22, according to EL7 data. This coincided with the results announcement on October 26, while the comparison of dollar-denominated estimates showed earnings per share missing despite revenue beating the expectations cited in the market report. The company approved cash dividends of 0.34 reais per share, totaling 667 million Brazilian reais. The amount will be paid on December 15, 2026, to shareholders of record on November 10, while November 11 was set as the ex-dividend date. These dates mark the next specified step for shareholders following the third-quarter results announcement.