Gerdau Posts 1.4 Billion Brazilian Reais in Free Cash Flow in Third Quarter
Key Facts
Gerdau reported positive free cash flow of 1.4 billion Brazilian reais in the third quarter of 2026, benefiting from lower working capital consumption, according to a company disclosure via PR Newswire. The figure puts cash generated after operating and investment spending at the forefront of the period's results, without representing the company's total cash available. The company also reported capital investments of 955 million Brazilian reais during the quarter, bringing capital expenditure to 3.1 billion reais in the first nine months of the year. Free cash flow therefore coincided with continued spending on projects and assets, while the company said lower working capital consumption supported the cash result. Gerdau is scheduled to present its results in a video conference on October 27 at 12:00 p.m. Brasília time and 11:00 a.m. New York time.
North America was the main driver of operating profit in the quarter, with Gerdau saying the region accounted for more than 76% of consolidated earnings before interest, taxes, depreciation and amortization. That earnings figure was 2.9 billion Brazilian reais, with a margin of 27.7%. The company described the margin as its highest in four years, putting the third-quarter level in a longer-term context beyond the quarter-on-quarter comparison. It attributed the performance to higher realized prices in North America, which more than offset rising costs. At the same time, sales volumes were nearly stable compared with the previous quarter, UOL reported, citing the company.
Net debt to adjusted earnings before interest, taxes, depreciation and amortization stood at 0.58 times at the end of the third quarter of 2026. The ratio was 0.69 times in the second quarter of the year and 0.81 times in the third quarter of 2025, according to Gerdau data. The comparison means the ratio fell from the two previous periods cited in the disclosure, reaching the lowest of the three readings. This came alongside the positive free cash flow the company reported for the period, while it continued capital investment during the quarter and the first nine months. These indicators provide a picture of cash flow and financial leverage alongside investment spending, with none replacing the others.
In Brazil, the Miguel Burnier mining project remained among the company's upcoming projects. Gerdau said it was in the final integrated testing phase, with operations expected to begin in the fourth quarter of 2026. It also said the scrap processing facility in Pindamonhangaba had started operations. The two projects place part of the capital spending in the context of expanding operating capacity, while the mining project's start date remained set for the final quarter of the year. The company had reported 3.1 billion Brazilian reais in capital expenditure during the first nine months, including 955 million reais in the third quarter. Investors are awaiting the expected start of operations at the Miguel Burnier project during the period set by the company.
EL7 data showed GGB shares closed at 5.10 dollars on October 23 and then at 4.75 dollars on October 26, 2026. Gerdau announced its results on October 26, so these closing prices do not establish that the share decline was a response to the announcement. The data identify the two prices and their dates without explaining the trading movement or its timing during the day results were released. The following day, the results conference was scheduled for 12:00 p.m. Brasília time and 11:00 a.m. New York time. The conference will allow the company to present its third-quarter results at the time it announced, following publication of the disclosure on October 26.